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Analytics Magazine

Healthcare Analytics – Views from HIMSS 2015: A mixed bag for healthcare analytics

May/June 2015

Rajib GhoshBy Rajib Ghosh

Just returned from HIMSS 2015 in Chicago, the largest healthcare IT conference in the United States. This year about 40,000 people from all over the world attended, and more than 1,400 exhibitors from the healthcare technology market showcased their products. Clearly, healthcare buyers have woken up to the technology explosion, and they are purchasing and adopting more and more technology products, much of it software. Healthcare IT (HIT) is now a big business and promises to be even bigger during the next five years. The demand is global as is evident from the presence of many foreign attendees at the conference. Developing countries are buying technology solutions as they look to expand their healthcare infrastructure.

More than 200 conference exhibitors were listed under the category of “analytics.” Upon a closer examination, not all of them are pure play analytics companies. Some came from other HIT areas, such as electronic health record (EHR) companies who are trying to position themselves in this emerging market. In past articles I described the growing need for healthcare analytics and the rising opportunities for start-ups or mid-sized organizations, but now it seems like the space is getting crowded as companies from different HIT verticals are joining the analytics bandwagon.

Inevitably, the market will consolidate, likely within a few years. Such consolidation has already started in the EHR space. Once the Office of the National Coordinator (ONC) created market demand for EHR products through the Meaningful Use incentive program, many new products were introduced. Soon it became so fragmented that competitive differentiation was lost. As the incentive program is entering its last stage, sustainability has become an issue for new and old companies alike. Product sales have slowed, leading to market exits through mergers and acquisitions. Most notable of those is the recent acquisition of Siemens Healthcare by Cerner. I expect the same thing to happen to analytics companies within a few years.

We Have EHR – Now What?

Many discussions at HIMSS this year centered on the “post EHR world.” Most health systems and physician practices implemented and adopted EHR systems during the last five years. Some even went through multiple implementations as they switched their systems. Today, the key question looming inside healthcare organizations boardrooms is: We have an EHR system, now what do we do with the data?

The Centers for Medicare and Medicaid Services (CMS), the largest insurance payer in the country, has been working toward changing its payment model. They created a roadmap for the change with both a carrot and a stick. Dr. Patrick Conway, CMS’ chief medical officer, articulated his organization’s vision at the conference. The argument in favor of the payment reform was that although the United States spends more dollars on healthcare per capita than any other country in the world, our outcomes are worse than that of many other developed nations. Reforming the payment model was the solution that legislatures and CMS came up with to address this paradox.

The new model – paying for performance instead of volume – will drive costs down, improve quality of care and create more satisfied patients. CMS is moving in that direction quite rapidly. Creating a sustainable business under the reformed payment model is the big challenge boardrooms of healthcare organizations are grappling with. If your organization is in the healthcare industry, now is the time for the transformation to begin. The train has left the station and it is on a fast track.

But what does this have to do with data and analytics?

The crux of the payment reform is data and a healthcare organization’s ability to use that to its advantage. CMS has asked healthcare organizations to deliver high-quality care that costs less. The inherent message in that mandate is be insightful regarding when, how and what care is delivered to whom. For decades, healthcare organizations delivered care to anyone who showed up at their door, performed unnecessary tests and never explained why the cost of care varied so much from one organization to another for the same service. Everyone except consumers was OK with that. In the process we as a nation spent 17.9 percent of the GDP on healthcare without improving outcomes.

Organizations now have to look at their data, they need to better understand their patient population in order to become predictive and preemptive with treatment, and they need to be transparent about costs. They also need to keep patients away from hospitals without rationing necessary care in order to qualify for incentive bonuses. As more patients become insured either through insurance exchanges or state Medicaid expansion programs, demand for primary care will increase. Health systems will have to see the right patients at the right time so that disease exacerbation can be avoided.

That is a huge paradigm shift, and healthcare organizations can’t do it without building enterprise data warehouses and sophisticated analytics. That was the key conversation at HIMSS this year. At every analytics company’s booth I visited, at every healthcare analytics session I attended, the conversation started and ended with the statement that data is king. Understand data well or perish. Population health management, hospital readmission control, effective patient safety management during in-patient care and predictive revenue risk analysis are all means to the same end – sustainability in the new world.

Where Do We Go From Here?

The rate of change in healthcare is accelerating, and the change is built around data and analytics. Not all healthcare delivery organizations will be able to cope with the pace of change. Some do not have the wherewithal. They need help. They need strategy and a roadmap. A tool vendor is not enough.

Data warehouses, data marts, ETL and reporting tools are commodities. Understanding the core drivers of this change is the key. Unfortunately, only a handful of analytics companies at HIMSS seemed to have a good understanding of the requirements. That’s not a good sign.

Meanwhile, big corporations are jumping into the mix, creating confusion in the marketplace. Apple and IBM recently announced an analytics partnership using Watson Health, which I predicted in a July 2014 article. How far they can take that partnership remains to be seen. Microsoft is rebounding with a new set of tools. While choice is good, too much choice can create paralysis among buyers. If this year’s HIMSS conference is any indication, the rest of 2015 is going to be interesting to watch.

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: twitter.com/ghosh_r.

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