The Big Unlock

If data is the new oil, digital health is the new oil refinery.

After the massive effort to digitize patient medical records under the Affordable Care Act and the HITECH Act, the next stage of evolution for healthcare is to unlock the value of the data. And healthcare data is getting bigger all the time. A typical 500-bed hospital today generates 50 petabytes of data. The pace of growth of data is exploding, and our ability to digitize and analyze it is struggling to catch up. This has led to many enterprises considering themselves to be “data rich, insight poor.”

Along with this, the rate of change in the way we are digitizing and analyzing the data in the health space is accelerating. Big data analytics is expected to be a $187 billion market by 2019, according to research firm IDC. Healthcare is identified as a fast-growth segment, expected to be a $43 billion market. The rapid growth of healthcare data (48% annual growth as of 2013) and the accumulation of digital health data from a variety of sources is leading to the generation of new and improved insights for driving healthcare outcomes. New data sources such as wearables and the internet of things (IoT) present new opportunities and challenges; research firm Gartner predicts that 21 billion IoT devices will be online by 2020.

All of this has led to Big Data being referred to as the new “oil". What is driving the exploration of the new oil is the healthcare industry’s shift to value-based care (VBC).

The per capita cost of healthcare in the United States in 2015 was around $9,900, the highest in the world by a wide margin, and the healthcare sector accounts for a fifth of the GDP. The higher costs in the U.S. are not necessarily producing better outcomes.

VBC shifts financial risk while increasing accountability in the healthcare system. It challenges health plans, health systems and pharmaceutical companies to change their mindset about their revenue models. The most important aspect of this shift, besides getting used to not being paid for volumes, is the unlocking of insights from data to improve healthcare outcomes and reduce costs. The key competencies required are data aggregation and analysis to drive physician productivity, care management and patient engagement. The digital and analytical infrastructure required to navigate this transition to VBC is the biggest opportunity in front of the healthcare sector and the technology provider community.

The transition to VBC is neither easy nor assured. It involves significant financial risks in terms of upfront investments, radically new ways of approaching health care delivery, and a culture shift that emphasizes the role of data and insights for care decisions. While it is widely acknowledged that healthcare is an area of tremendous opportunity for Big Data analytics, innovation has been slow due to margin pressures, a risk-averse mindset, and market-related factors.

At the time of writing, healthcare policy in the United States is in a state of tremendous flux and uncertainty. However, behind the scenes, the shift to VBC is quietly taking place, driven by the 2015 Medicare Access and CHIP Reauthorization Act (MACRA), a bipartisan piece of legislation that creates incentives to move away from FFS to value-based reimbursements.

We are in the very early stages of the effort to unlock the value of the data. For one, much of the data remains locked in proprietary third party vendor technologies, and for another, the investment required to unlock insights and the returns required to justify these investments are yet to line up. The biggest challenge by far remains interoperability between various proprietary electronic health record (EHR) systems. The efforts to promote data sharing through health information exchanges (HIE) have also not been as successful as expected, for a variety of reasons.

At the same time, we have new data sources coming online, such as IoT and genomic testing, to name a couple. These new data sources are emerging as important factors in the Big Unlock.

Today, we are seeing a convergence of demand and supply-side forces that are unlocking the potential of advanced analytics. Some of these are:

• Increasing importance of analytics for enterprise growth and profitability
• Falling prices for data storage and computing capacity
• Acceleration of technology-led innovation
• Alternate payment models and the transition to population health management

A nagging question that keeps coming up in boardrooms is: what is the ROI on new technology investments, especially digital health? The answers are not clear today.

Value creation in analytics today is focused on a couple of areas: data integration and insight generation through the use of predictive models for managing clinical outcomes, especially in the context of population health management (PHM). In recent years, expensive and complex analytical tools and technology have become accessible and affordable to people and businesses. The computational horsepower needed to conduct analysis on vast amounts of data has also dropped significantly in recent years in line with Moore’s Law. With storage and computing capacity becoming very affordable and practically available on tap, analytics is no longer constrained by scalability and affordability.

The biggest challenge in front of healthcare is the threat of data breaches and IT security. The new menace of ransomware has emerged as a potent disruptor of healthcare operations, with the potential to put patient lives at risk. Healthcare has historically underinvested in technology modernization and the chickens seem to be coming home to roost. The migration of enterprise workloads to cloud environments managed by providers such as Amazon and Microsoft who operate with high levels of IT security in their data centers can potentially mitigate this risk for healthcare enterprises.

In the future, the highest-value use cases in Big Data analytics in healthcare will combine the power of predictive analytics with the rapid proliferation of data. The story that is unfolding in front of us is the opportunity of a generation. No sector is as broken as healthcare. No sector is more exciting to be in today.