Diagnosis: Data is King

Amid the demands of the new presidential administrations's health care reforms, stakeholders from all segments of the health care marketplace are focusing efforts anew on creating business and technology strategies that will keep them viable. This is especially true for health insurers, now revisiting how they regard, organize, access, use and transmit data in and out of a growing health care universe.

That universe of users includes regulators, providers, third parties and patients alike, all of whom expect instant access to data from any number of repositories and/or stores.

And with patient data being used for any number of purposes - from claims, payment or operational functions, to clinical quality reporting and evidence-based decision support - its value now extends to many stakeholders with unique vested interests.

"There are big changes coming in the health industry," says Matthew Josefowicz, insurance practice director at New York-based Novarica. "All participating in the market feel something big will happen in the next 12 to 18 months, whether it comes from economic pressure or government action. It's important for insurers to have their own internal data house in order, and become more aware of the changing nature of the external data landscape."

Whether insurers have their data houses in order remains a question. A survey of health insurers conducted in March 2009 by Novarica on behalf of three SourceMedia publications, Information Management, Insurance Networking News and Health Data Management, yielded perplexing results. The survey, which targeted 27 unique health insurers representing companies of all sizes, sought to uncover the current state of data management among health insurers. 

Not surprisingly, insurers of all sizes are making data a priority in the IT shop, with more than 23 percent of respondents stating they spend 35 percent or more of their IT dollars on data initiatives. 

It follows that the majority of respondents also reported having "adequate capabilities" in data repositories for use with customer data and claims, and for predictive analytics for claims and underwriting.

"Health insurers are adept at using data expertly to manage claims, and we are seeing a wide range of capabilities in these other areas," says Josefowicz. "Not surprisingly, where insurers are most advanced is in their data repository capabilities, their investment in data warehousing, and their ability to build out repositories and report out of that." 

A Surprising Deficiency

What's surprising was the respondents' answers to whether they felt they had adequate capabilities in master data management. Here, close to half answered "adequate capabilities," yet an equal number answered "limited capabilities, but no planned investments."

"There is a big split between companies that put master data management programs in place, and those that are waiting to float it to the top of their agenda," notes Josefowicz, "especially as the amount of data increases exponentially, such as with pharmacy and electronic health records."

Josefowicz points to another revelation of the survey: close to half of the respondents said that they did not have an enterprise data model, and one-third of those said they had no short-term plans to invest in one. 

"We know that the improvement of data management processes has a positive impact on customer service, claims and underwriting, but it should be an enterprise effort," he says. "Having an enterprise data model is critical to achieving this."

Adoption of data governance and centralized data management programs is also fragmented. When respondents were asked whether they had a center of excellence or formalized data governance program, 37 percent reported having "limited capabilities, but no planned investments."

"It's important to note that these results are more reflective of business practices rather than IT practices," he says. "It's about the way you approach your management of data, how health insurers structure themselves around the importance of data."

Grand Plans

President Obama's aggressive multibillion dollar bet to get health care providers to move from clipboards to computers to track and communicate patient health information is a long shot to succeed, say some experts. In the private health care provider sector, progress is excruciatingly slow. In spite of incentives being offered by insurers (see "Are Incentives the Answer?" right), fewer than 10 percent of America's 5,000 hospitals and 17 percent of its 800,000 doctors have digitized their patients' records according to technology and consulting provider EMC. The smaller the practice, the less likely an investment has been made in EHR technology.

"Obviously, the cost of information systems is a barrier for small practices and hospitals," maintains Paul Keckley, executive director at the Deloitte Center for Health Solutions, Washington, D.C. "This is complicated by the fact that at the federal level we have not had an IT policy that directs which systems to buy and how to use them. And although you have systems to capture data at the point of care, there are no true interoperability standards, so in spite of health information exchanges, you can't send [a record] somewhere else and be guaranteed that the recipient will be able to deal with the file. This represents a seven-year-old problem."