We have watched many industries suffer the significant disruption and disintermediation of new market forces and brash, young, well-funded upstarts who change the game. The casualties are all around us – the taxi industry, media and journalism, online hotel & travel bookings, online stock trading, and the list goes on.
Key features of a disrupted market include: democratization of information, price transparency, the sharing economy and crowdsourcing and social media channels.
These disruptions are now hitting healthcare. Health insurance in particular is going through a significant evolution. Worldwide, consumers have increasing choice, and insurers are looking for ways to engage differently and meaningfully with their members; to no longer look at their members as merely part of a large, faceless risk pool, but rather as health consumers trying to navigate the complex healthcare delivery marketplace. Insurers are aiming to reduce costs and improve coordination with providers as the industry moves towards member-centric models.
What can incumbent health insurers do to survive? Analytics are a big part of the answer. Incumbent insurers have the advantage of the insights they can draw from their massive stores of data – that is, if they can liberate their data from functionally isolated silos often housed in legacy applications and managed with old-world technologies. Are analytics the answer?
In the CIO Survey, 90 percent of healthcare respondents said they believe analytics have a positive impact on productivity and efficiency – higher than in any other industry.
Through analytics, you can use member information to start to predict what might happen next in the patient journey of a member; hence, payers and their provider networks can start to offer alternative care models to minimize expensive medical care and intervention and help consumers take control of their own healthcare.
It’s the likelihood of bottom-line results, though, that’s leading to significant growth within healthcare analytics – estimated to reach $21 billion in 2020 versus $4 billion today. In addition, Rock Health reports that venture capital investments to healthcare technology firms increased 176 percent in 2014, with most of the funds going to healthcare analytics companies.
What does all this evolution mean for the healthcare CIO? Simply put, it’s time for substantial change. New well-funded digital health insurance companies such as Oscar are shaking up traditional market models and challenging the incumbents with digital engagement models and low overhead costs.
For the incumbents, there is a pressing need for investments in data analytics to leverage value and insight from existing data stores and to ingest new data to enable more compelling interactions with members. There needs to be direct engagement with members to help with navigation and education.
Ultimately there are three forms of healthcare data – systems of record data (claims data, electronic medical records), genomic and genetic data, and patient-generated data (biometrics, qualitative data).
Healthcare CIOs need to ensure they have future-proofed strategies around all three forms of data and their linkages in order to generate insights, develop new products and channels and address new models of member loyalty and expectation.
Fortunately, the healthcare CIO armed with a strategy for next-generation analytics could serve as the digital change agent the industry needs.