Share with your friends










Submit

Analytics Magazine

Healthcare Analytics: Four mega trends to watch in 2016

January/February 2016

business analytics news and articles

Changes in 2015 caused the otherwise conservative and closed healthcare industry to change direction.

Rajib GhoshBy Rajib Ghosh

It’s hard to believe that 2015 and half of the second decade of the new century is over. Many industries have changed or were disrupted during this time. Many more will share the same fate as we move through the decade. We have seen many changes in healthcare too, albeit at a slower pace than other industries such as mobile or transportation. Nonetheless, changes in 2015 caused the otherwise conservative and closed healthcare industry to change direction. Healthcare has become data- and analytics-driven in almost all parts of the value chain. As a direct consequence of the Affordable Care Act (ACA) traditional business models have changed. In the coming years those changes are expected to continue. In this article I focus on four trends that will drive healthcare analytics in 2016 and beyond.

No. 1: Consumerism in healthcare has begun

Since the implementation of ACA in 2010, pundits predicted that consumers would have bigger voices in the healthcare industry. We didn’t see much progress in the initial years of ACA. That is changing. More and more Americans are now buying high-deductible health plans. Enrollment in such plans doubled since 2010 to about a quarter of all American workers with health plan benefits in 2014. This forces consumers to pay more for healthcare as out-of-pocket expenses. Data from Commonwealth Fund shows that out-of-pocket household expenses for healthcare, including premiums and deductible, doubled to 9.6 percent of household income between 2003 and 2013. This is driving consumer demand for the ability to compare gross and net prices for healthcare services.

In theory, price transparency may allow consumers to make better decisions for their healthcare, and price competitiveness should drive costs down like other industries. Care delivery organizations should scrutinize their costs, rethink their delivery workflow and manage their revenue cycle well to keep costs down and attract more clients. Whether that will happen or not remains to be seen. At the same time consumers are increasingly gravitating toward wearables to make self-care easier. A recent IDC report shows that worldwide wearable shipment has grown 163 percent since 2014. Both areas have made positive impact on the need for better data analytics.

No. 2: Providers are taking more risk for outcomes and consolidating

Results from the initial accountable care organizations were quite mixed. The Center for Medicare and Medicaid (CMS) and some private health plans have pushed delivery organizations to accept more risks for population health management. Provider organizations, feeling this price pressure from public and private plans, are trying to consolidate in many markets to retain pricing power. This trend became quite pervasive in 2015. Combining hospitals with physician groups is growing. Kaiser is leading the way as their CEO, Bernard Tyson, said in a recent interview that their model is the best way to deliver care for patients and populations. To steer power away from payer organizations, providers are also offering their own plans and trying to adopt KP-like integrated delivery network (IDN) models. To counter that strategy in 2015, we have seen a mega merger trend among payers as well. Anthem Blue Cross and Cigna, Humana and Aetna, United Healthcare and Catamaran are just a few examples. The business drivers for most mergers are cost containment and defending pricing power. Mega mergers create opportunities to combine large data sets with analytics to have a bigger impact on delivering better population health management.

No. 3: Predictive analytics in healthcare finally arrived

Some 40 percent of healthcare executives reported more than 50 percent data volume increase in 2014 according to a report by Manatt, Phelps and Phillips, a prominent U.S. law and consulting firm. As the data sets become bigger, health systems and payers take advantage of predictive analytics. In 2014, 47 percent of the managed care organizations (MCO) possessed predictive analytics tools. By 2016 the number is expected to rise to 80 percent. That’s a significant jump. Healthcare organizations are also adopting the insight that social determinants of health contribute to the wellbeing of a patient more than the medical issues. In 2016, both social determinants of health along with usual suspects such as drug use and emergency room admissions data will drive predictive model for identifying cost risks of population cohorts.

No. 4: Capitated payment will drive stakeholders towards analytics driven population health management

One delivery organization can’t undertake population health management unless it is an integrated delivery network. A patient seldom visits just one care delivery organization during a disease life cycle. Access issues and the insurance exchange marketplace will support patient mobility in 2016. As a result, we can expect non-competing healthcare organizations to partner with each other to manage the health of a population. Pharmaceutical companies may follow suit and become a partner in care with healthcare organizations. Government payers, i.e., Medicare and Medicaid, are fast moving toward capitated payment and value-based-purchasing models where outcome will be measured and rewarded. To be successful in this new model, data and analytics will become as important as providers, and soon a data analyst will figure in the care teams within provider organizations alongside with physicians, nurses and case managers.

2016 marks the beginning of the second half of this decade, and it is expected to be transformative for the healthcare industry overall. It is also the year for the presidential election. If politics do not get in the way of this fast moving train of “transformation,” we should buckle up for more disruptive changes.


Rajib Ghosh (rghosh@hotmail.com) is an independent consultant and business advisor with 20 years of technology experience in various industry verticals where he had senior-level management roles in software engineering, program management, product management and business and strategy development. Ghosh spent a decade in the U.S. healthcare industry as part of a global ecosystem of medical device manufacturers, medical software companies and telehealth and telemedicine solution providers. He’s held senior positions at Hill-Rom, Solta Medical and Bosch Healthcare. His recent work interest includes public health and the field of IT-enabled sustainable healthcare delivery in the United States as well as emerging nations. Follow Ghosh on twitter @ghosh_r.

business analytics news and articles

Tags


Headlines

Does negative political advertising actually work?

While many potential voters dread campaign season because of pervasive negative political advertising, a new study has found that negative political advertising actually works, but perhaps not in the way that many may assume. The study “A Border Strategy Analysis of Ad Source and Message Tone in Senatorial Campaigns,” which will be published in the June edition of INFORMS’ journal Marketing Science, is co-authored by Yanwen Wang of the University of British Columbia in Vancouver, Michael Lewis of Emory University in Atlanta and David A. Schweidel of Georgetown University in Washington, D.C. Read more →

Meet Summit, world’s most powerful, smartest scientific supercomputer

The U.S. Department of Energy’s Oak Ridge National Laboratory on June 8 unveiled Summit as the world’s most powerful and smartest scientific supercomputer. With a peak performance of 200,000 trillion calculations per second – or 200 petaflops – Summit will be eight times more powerful than ORNL’s previous top-ranked system, Titan. For certain scientific applications, Summit will also be capable of more than three billion billion mixed precision calculations per second, or 3.3 exaops. Read more →

Employee engagement a top concern affecting customer experience

Employee engagement has surfaced as a major concern in delivering improvements in customer experience (CX), with 86 percent of CX executives in a Gartner, Inc. survey ranking it as having an equal or greater impact than other factors such as project management and data skills. “CX is a people issue,” says Olive Huang, research vice president at Gartner. “In some instances, the best technology investments have been derailed by employee factors, such as a lack of training or incentives, low morale or commitment, and poor communication of goals." Read more →

UPCOMING ANALYTICS EVENTS

INFORMS-SPONSORED EVENTS

INFORMS Annual Meeting
Nov. 4-7, 2018, Phoenix

OTHER EVENTS

Making Data Science Pay
July 30-31, 12:30 p.m.-5 p.m.


Predictive Analytics: Failure to Launch Webinar
Aug. 18, 11 a.m.


Applied AI & Machine Learning | Comprehensive
Sept. 10-13, 17-20 and 24-25


Advancing the Analytics-Driven Organization
Sept. 17-20, 12-5 p.m. LIVE Online


The Analytics Clinic: Ensemble Models: Worth the Gains?
Sept. 20, 11 a.m. -12:30 p.m.

CAP® EXAM SCHEDULE

CAP® Exam computer-based testing sites are available in 700 locations worldwide. Take the exam close to home and on your schedule:


 
For more information, go to 
https://www.certifiedanalytics.org.