Share with your friends


Analytics Magazine

Healthcare Analytics: The future of U.S. healthcare analytics

Analytics data science news articles

The 2016 U.S. presidential election could have a profound impact.

Rajib GhoshBy Rajib Ghosh

The 2016 election is a watershed moment for the U.S. healthcare industry. Any presidential election and change of guards come with changes in policies. It happened in 2008 when President Obama was sworn into the office. That led to the establishment of the Affordable Care Act (ACA) or Obamacare. To bend the cost curve, which was swinging up uncontrollably, lawmakers passed a very comprehensive legislative change in U.S. healthcare that expanded insurance coverage for 20 million Americans through Medicaid expansion and the establishment of health information exchanges. When the law was passed, we saw many kinds of reactions – from cautious skepticism to digital health euphoria in the industry. Since then, slowly but surely the industry changed course toward a new model of care delivery and payment. ACA drew scathing criticism from the other side of the aisle with repeated vows to repeal. Given the election results of 2016, we anticipate a move in a different direction. The challenge is the degree of disagreement in the views among the lawmakers. A giant financial behemoth such as the healthcare industry can’t be swayed one way or the other so frequently. Much is at stake, and hence the risks are very high.

Regardless of what happens in January 2017 and beyond, a few things about the changes that were ushered in by ACA are expected to continue. Healthcare data analytics will be one of those.

Impact of the Key Policy Changes

Repeal and replacement of ACA is currently on the table. Alternatives and execution timelines are still being debated. Following is a quick summary of the major changes and their impacts:

Medicaid changes: The federally funded Medicaid expansion program is on the chopping block. Only 31 out of the 50 states opted for the program, and the federal government initially funded 100 percent of the expansion program. No limit was imposed on the number of people who could be brought under the program if they qualify for the enrollment criteria.

Legislators are now planning to make this funding a “block grant,” i.e., a fixed amount of money for the program, allowing states to manage their program in their own way. For states that opted for the expansion, this will hurt if the grant money is calculated based on the pre-Medicaid expansion population. If that happens, many people will lose Medicaid insurance, or the Medicaid payment will become so low for everyone that access to care will be impaired. While this might ease the demand on the primary care or the specialty care side, it can increase crowding in the emergency room like it used to be before ACA. But this time, since the population has increased, further crowding is expected to be worse. It also would lead to higher costs.

State run health insurance exchanges may crash: Insurance companies in many states are exiting health insurance exchanges, citing lack of profitability. But many Americans have bought their insurance coverage from insurance exchanges using federal subsidies based on their annual income levels. Subsidies are an expected casualty in the repeal and replacement drive. Without subsidies, many won’t be able to buy insurance, and exchanges won’t be able to generate sustainable revenue to stay afloat.

Personal mandate to buy insurance may be removed: ACA prevented insurance companies from denying coverage for pre-existing conditions. However, to balance risk pool for the health insurance companies, lawmakers made it mandatory for all adults to have insurance or pay a tax. If the personal mandate is removed, then the risk balancing won’t exist. Insurance companies either won’t cover for the pre-existing conditions or hike insurance prices for all to adjust their risks.

Uncompensated care may cost hospital closures or consolidation: Hospital CEOs are worried that their top and bottom line will be severely impacted if the number of lives covered by insurance, government or private insurance via exchanges, reduce substantially. They agreed to accept lower pay from CMS for care delivery since exchanges and Medicaid expansion reduced the uninsured population. Hospitals would have to demand more money from CMS and other plans to offset their lost revenue. In other words, the cost of healthcare could start to increase like before.

Healthcare analytics, Affordable Care Act (ACA), health insurance coverage, Medicaid, Medicare, electronic health records

A giant financial behemoth such as the healthcare industry can’t be swayed one way or the other so frequently.
Photo Courtesy of | nito500

What Won’t Change

The movement of ACA and CMS toward value-based care and payment reform programs compelled healthcare organizations to think differently about how they collect and use their data. Let’s look at this from the perspectives of three key stakeholders in the healthcare value chain: providers, payers and the government.

Provider perspective: Care delivery organizations agreed to take less payment from Medicare and participated in programs such as the shared savings program or bundled payment under ACA. To achieve that, they started to shift their focus from volume-based care to improving internal efficiencies and proactive identification of high-risk patient population. The payment structures allowed and incentivized them to become data-driven and supported their journey toward population health management. I don’t see that retrograding. The Electronic Health Record Meaningful Use program pushed more than 80 percent of provider offices to adopt data digitization technology such as EHR, which is critical to data-driven healthcare. However, the cost of data analytics and the unavailability of data professionals are still the key issue for many. I anticipate that the cost will come down under market pressure.

Payer perspective: Managing high-risk and high-utilizer patient population was always a challenge for the payers. The cost of healthcare was going up sharply owing to the high cost of drugs, frequent hospitalizations and expensive diagnostics. About 50 percent of the cost was also limited to 5 percent of the population. Managing this population via shared savings incentives is a good way for the insurance companies to control their costs. They wouldn’t like to change that, but they might have to offer more analytics support to small- or medium-sized provider organizations to make this happen.

Government: As states become more accountable to take care of their underserved population with a fixed amount of federal money, they must put more pressure and logistics support on the provider organizations to transition to value-based care at an increasing speed. Population health management will become even more important to achieve quality and outcome goals. I won’t be surprised if states take the initiative to set up more aggressive goals for data exchanges and perhaps even fund technology solutions to achieve that at the state or county levels.

There is a still a lot of uncertainty about the proposed changes. A Republican-controlled congress and White House can change some without taking Senate votes through vehicles such as “budget reconciliation,” but for other changes there would be legislative battles. Healthcare for many people in the country is at stake across party lines. ACA is also a very intricate piece of legislation, and repeal and replace may not be as easy as it sounded during campaign rhetoric. There is no silver bullet to fix the broken healthcare system, but frequent change of direction might produce severe change paralysis – that’s the last thing this industry requires in the 21st century.

Rajib Ghosh ( 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.

Analytics data science news articles





Related Posts

  • 81
    Following the 2016 presidential election, the first two months of the new year were quite tumultuous for the U.S. healthcare system. Interestingly, the Affordable Care Act (ACA) has survived so far, albeit the process to repeal the law has begun.
    Tags: healthcare, will, analytics, medicaid, health, care, data, companies, states, population
  • 67
    The Israeli Ministry of Health recently agreed to reverse a blood donation policy and will now allow some Ethiopian immigrants, homosexuals and elderly people to donate blood. According to the Jerusalem Post, the change is a result of “new local and foreign epidemiological data and the improvement in medical technologies…
    Tags: health, change, analytics, healthcare
  • 66
    The healthcare analytics industry is making great strides. As part of my work I talk to many data analytics companies who report they are very busy with implementation projects. One large company told me that its implementation staffs are booked until end of the first quarter of 2017. This is…
    Tags: data, analytics, healthcare, management
  • 65
    The last two months were eventful for healthcare. The Affordable Care Act (ACA) endured another repeal-and-replace attack in congress. The latest bill, known as the Graham-Cassidy bill, was withdrawn by Senate Republican leaders when it became clear that the bill would not receive the 50 votes needed for passage.
    Tags: health, healthcare, care, data, will, analytics
  • 65
    As healthcare organizations transition to value-based care, there is an increasing need for actionable information. Many organizations do not know where to start in building an information framework that assists with decision-making and drives actions. Provider organizations, particularly large, complicated health systems, have incredible amounts of data spread over several…
    Tags: data, analytics, healthcare, health, care, will, management


FCC wins 2018 INFORMS Edelman Award

The Federal Communications Commission (FCC) won the 2018 Franz Edelman Award for its use of operations research (O.R.) as part of a revolutionary approach to address the rapidly growing need for additional wireless spectrum in the United States and Canada. The prestigious award, which recognizes outstanding achievement in advanced analytics, O.R. and management science, was presented by INFORMS at the Edelman Gala held April 16 in Baltimore in conjunction with the 2018 INFORMS Conference on Business Analytics and Operations Research. Read more →

BNSF Railway receives 2018 INFORMS Prize

BNSF Railway was awarded the 2018 INFORMS Prize for its pioneering and enduring integration of operations research (O.R.) and analytics programs throughout the organization. The prize was presented at the Edelman Gala held April 16 in Baltimore in conjunction with the 2018 INFORMS Conference on Business Analytics and Operations Research. Read more →

Ethics article earns Mission Award from Notre Dame

An article co-authored by Scott Nestler and David Hunt, both longtime and active members of INFORMS, was named a winner of the Mission Award from the Mendoza College of Business at the University of Notre Dame. The article, “Using INFORMS ethics guidelines in the classroom,” appeared in the February 2017 issue of OR/MS Today (the INFORMS membership magazine). The Mission Award recognizes one or more Notre Dame faculty members for a specific research work that contributes to the common good. Read more →



2018 INFORMS Conference on Business Analytics and Operations Research
April 15-17, 2018, Baltimore


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