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Healthcare analytics: a year of many challenges

2014 has been quite a remarkable year for the healthcare industry. We have seen various ups and downs, from the healthcare.gov fiasco to the surge of investment in the digital health technology space. A recent report [1] published by StartUp Health shows that $5 billion has been invested in digital health technology during the first three quarters of 2014, which exceeds the total investment for all of 2013. Apple released its Healthkit product, and Google announced Google Fit – both are harbingers for personal data-level analytics in the cloud. Both companies are moving aggressively forward in the healthcare technology space, and I predict that their competition will produce great outcomes for patients as consumers.

Healthcare analytics is slowly taking center stage. As of this writing, $381 million was invested in healthcare-related analytics and big data in 2014. A new study by Johns Hopkins published in Academic Medicine found that analytics is critical to the success of accountable care organizations (ACO) [2]. In a recently concluded Healthcare Analytics Summit organized by Health Catalyst, senior leaders from Geisinger Health Systems, Cleveland Clinic and Texas Children’s Hospital confirmed that meaningful analytics is crucial to ensure delivery of quality care and improve the patient experience, while maintaining a positive bottom line.

I expect that by 2017, analytics will drive success for ACOs across the board. That’s good news for analytics professionals and product companies. The needle has started to move at last.

Pioneer ACO Data Shows Challenges Ahead

Prediction: By 2017, analytics will drive success for ACOs across the board.

Prediction: By 2017, analytics will drive success for ACOs across the board.

After a long wait, the Center for Medicare and Medicaid (CMS) recently published quality and financial data [3] reported from the Pioneer Accountable Care Organization (ACO) program. CMS started the program in 2012 to improve quality and health outcomes of patients by aligning payment incentives for providers. Of the 32 original Pioneer ACOs who participated in the program, 60 percent posted savings in the first year (2012) while 40 percent posted losses. The worrisome thing is by the second year about 50 percent of the initial participants dropped off the list. The cost incurred in the program by those who dropped off was much higher than their savings.

However, CMS reported that in general the program saved Medicare $96 million [4] in a two-year span. That is a good start, but clearly ACOs have mountains to climb in terms of data interoperability and data analytics. A recent survey [5] of 62 ACOs by Premiere and eHealth Initiative found that 83 percent of ACOs are facing challenges in integrating analytics into their workflow. Cost and return on investment of data analytics solutions pose significant barriers to adoption within many organizations.

What is Holding Back Transformation?

CMS designed the ACO model to improve care by sharing data among multiple stakeholders. ACOs are a cornerstone of the Affordable Care Act (ACA). The idea is that by focusing on the holistic picture of a patient as they move through the healthcare system, providers can not only prevent wasteful duplication of diagnostic tests and procedures, but can also deliver the right care at the right time to the right patient. Such targeted intervention in turn will help in the prevention of unnecessary emergency room visits and costly hospital readmissions. Patients do not want to spend time in the hospital, so reduced hospitalizations and better health for individuals will drive up patient satisfaction. This is the “triple aim” that ACA wants the healthcare industry to move toward. The majority of ACOs, however, are far from achieving that goal. They have not found much success in improving key performance indicators such as patient safety, cost containment, efficiency and patient satisfaction [6].

Geisinger Health System, one of the leading physician-led healthcare systems in the country, mined its huge data sets, and it has found that an inverse correlation exists between the cost and quality in healthcare [7]. According to them, as the costs of providing healthcare services decreases, the quality of care improves … and vice versa. Better patient outcomes are determined by the coordination of care and timely intervention for the right patient. However, to do that effectively organizations need to share data, re-engineer workflows, work collaboratively and embrace analytical tools that can provide them with actionable clinical insights in real time, preferably at the point of care. Unfortunately, most organizations are stuck in the first fundamental step, i.e., sharing data. This is probably the biggest disappointment for the industry during the last few years.

There is Hope, However.

The Office of the National Coordinator of Health IT is taking a keen interest in improving interoperability among various health IT vendors. To that end, the organization unveiled a 10-year plan in June for building a robust interoperable health IT ecosystem [8]. According to ONC, an interoperability roadmap will become available within the next three years that will be based on scaling current health information exchanges (HIE) across various vendor platforms.

Regardless of what political view we subscribe to, it will be unwise to believe that without significant government intervention such a roadmap can be implemented. Are we going to see a similar carrot-and-stick approach as we have seen in the “meaningful use” program for electronic health record systems?

No matter how significant the challenge, there is no doubt that the time is ripe for healthcare analytics. CB Insights predicted that this area is poised to attract close to $1 billion in investment by the end of 2014. Irrational exuberance or just the tip of the iceberg? You decide.

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. A version of this article appeared in the November/December issue of Analytics.

References

1. http://www.fiercehealthit.com/story/digital-health-investments-continue-rise/2014-10-01

2. Scott A. Berkowitz, MD, MBA, and Jennifer J. Jahira, 2014, “Accountable Care Organization Readiness and Academic Medical Centers,” Academic Medicine, September 2014, Vol. 89. No. 9, pp. 1,210–1,215 (http://journals.lww.com/academicmedicine/Abstract/2014/09000/Accountable_Care_Organization_Readiness_and.10.aspx).

3. http://www.modernhealthcare.com/article/20141008/NEWS/310089921/cms-posts-long-awaited-pioneer-aco-quality-and-financial-results

4. http://www.healthcare-informatics.com/article/breaking-news-medicare-s-pioneer-aco-program-loses-three-more-participants

5. http://www.ehidc.org/resource-center/publications/view_document/451-survey-the-landscape-of-accountable-care-and-connected-health-results-from-the-2014-national-survey-of-accountable-care-organizations

6. Premiere and eHealth Initiative, “The Landscape of Accountable Care and Connected Health: Results from the 2014 National Survey of Accountable Care Organizations.” http://www.ehidc.org/resource-center/publications/view_document/451-survey-the-landscape-of-accountable-care-and-connected-health-results-from-the-2014-national-survey-of-accountable-care-organizations

7. http://www.healthcarepayernews.com/content/changing-inverse-correlation-between-cost-and-quality#.VHOE_RzDN5d

8. http://www.fiercehealthit.com/story/onc-unveils-10-year-plan-healthcare-interoperability/2014-06-05