Given the sheer size of data created every day, Big Data has become a trendy topic over the past few years. Built on 4 core principles, many industries have successfully integrated and created value from big data analysis. Fundamentally, big data is helping organizations become more productive, efficient, and reduce costs. Like many other industries, healthcare has adapted to data analytics not only for its financial returns but also improving patients' quality of life.
Reducing Healthcare Waste
Due to a lack of transparency, a majority of healthcare spending in the U.S. has been criticized as wasteful. It is estimated of the 2.2 trillion spent on healthcare, up to $1.2 trillion can be considered excess. As a result of costly malpractice suits, defensive medicine is the leading contributor to inefficient cost control in healthcare. By building on the big data revolution, healthcare decisions can be based on data analysis rather than the clinical judgment of the physician.
Besides its cost impacts, data analysis creates value by aggregating patient information. Understanding as much as possible early in a patient’s life may help prevent diseases or treat illnesses in their early stages. With widespread implications to healthcare providers, big data will also transform the pharmaceutical industry. (See also, Healthcare Cures That Don't Work.)
As healthcare costs continue to rise, it is estimated that by 2021, healthcare spending in the U.S. should reach $4.8 billion and nearly 20 percent of GDP. With per capita spending on healthcare eclipsing $8000, there have been no long term health benefits associated with such high costs. As obesity continues to plague the U.S., life expectancy has fallen 1.5 years short of the OECD average. Integrating big data and analytics may not extend life expectancy. On the other hand, there are many financial benefits by way of reduced costs.
As patient and clinical records continue to grow, improved data management has cut down on excess information. Due to patient confidentiality standards, cleaning data was difficult to accomplish in the past. Costing hospitals 1.5 million per year, duplicate records can now be effectively removed through innovative electronic medical record (EMR) systems. Likewise, defensive medicine continues to boost costs as 20% of radiology tests are duplicates and waste approximately $20 billion per year.
Not only does big data eliminate costs of duplicate records, predictive analytics can more effectively identify early treatments in a patient’s history, prevent future medical episodes and avoid future readmission. Currently preventable diseases such as smoking and obesity cost $2 trillion worldwide. By integrating big data, providers can incorporate family history and current conditions for more effective preemptive care. As a result, it is reported this could reduce total healthcare costs by over $38 billion.
Overall, through disease prevention, reducing readmission rates, better patient outcomes, data transparency and accelerating R&D the big data revolution in healthcare is expected to reduce U.S. expenditures by $300 to $450 billion. (For more, see: How An Advisor Can Help Cut Your Healthcare Costs.)
Besides vast financial impacts, analytics within health organizations are expected to improve the quality and efficiency of healthcare provided. Traditionally, physicians and healthcare providers operated under a fee for service platform. This method pays practicing professional for each service performed such as tests and office visits.
What makes big data appealing to health care is the use of predictive analytics. Predictive analytics extracts information from preexisting data sets to determine future patterns and trends. Provided specific patient data is located in a single data database, algorithms can create personalized health experiences. Following the evolution of new data and technology, healthcare analytics encourages patients to pursue active lifestyles, select highly rated providers, and follow data driven results rather than clinical judgment.
Outside of clinical healthcare, data growth generates opportunities to effectively develop new drugs. Effective end-to-end integration of data presents pharmaceutical companies an opportunity to maximize the benefit from technology trends. Through predictive modeling, technology connects biological and clinical data in order to identify potential candidates for drug trials. As a $300 billion a year industry, global pharmaceuticals continue to spend millions of dollar each year on developing new drugs.
Driving R&D, profits ensure drug development has the highest return on the company’s investment. Through advanced algorithms, real time monitoring of clinical trials can effectively shorten the time between development and public use of new drugs. Accelerating the process between product development and release offers pharmaceutical companies a competitive edge to maximize returns. (For more, see: How Big Data Has Changed Marketing.)
Providing incentives to the healthcare industries, government sponsored initiatives aim to increase data transparency with positive patient outcomes. In 2009, the United States launched the Open Government Directive aimed at creating transparency amongst government sponsored data sets. Likewise The Health Information Technology for Economic and Clinical Health (HITECH) Act passed in 2009 subsidized as much as $36.5 billion in spending to create a nationwide network of electronic health records.
The estimated payments are anticipated to drive the adoption of EMR systems to 70 to 90 percent of all providers by 2019. Making clinical data transparent and universally used amongst all healthcare providers will allow the industry to efficiently implement analytics.
Digital Health Monitoring
Technology trends have increased the preventive measures individuals can take. Fitness trackers monitor a number of important factors to good health including; steps taken, sleep cycle and heart rate. The technology accounts for a number of factors, and if necessary it encourages the individual to perform more physical activity. The data is stored and analyzed by the tracker and can be accessed through smartphone app or through the companies webpage.
Following this information, individuals can make preemptive decisions to improved health and less doctor visits. Besides the booming wearables industry, online health sources such as WebMD (WBMD) use algorithms to provide individual health recommendations. Like a Netflix (NFLX) movie recommendation, patients input symptoms into WebMD’s platform which produces a list of potential health complications.
The Bottom Line
As the healthcare industry universally adopts big data and analytics, there is enormous potential for positive change. Currently, the big data revolution has grown in finance, marketing and sports with healthcare right behind. With the rising costs of healthcare in the U.S., many Americans scrutinized the industry for debilitating the economy. Through more efficient R&D in pharmaceutical, positive patient outcomes, data transparency, and potential for preventive disease methods, analytics is anticipated to save the U.S. economy billions of dollars.