IBM's CEO Ginni Rometty’s recent speech giving marketers 18 months to “sink or swim” might have raised a few eyebrows because of preciseness that borders on clairvoyance. But it did offer insights that resonate with a much broader audience.
Rometty charted out how big data will alter marketing and CRM strategies in the near future. Here's how she defines three imminent waves of change:
Wave 1: The shift from the market segment to the individual. It spells the death of marketing to the “average customer.” With the right data, you can do things like real-time pricing.
Wave 2: The evolution from reaching out to customers to creating a “system of engagement” that keeps track of interactions between brand and customer and uses insights to maximize value creation at every touch point.
Wave 3: Data is used to personalize and contextualize interactions.
Those are telling words if you are a marketer who hasn't gotten on the big-data bandwagon. For insurers, these words have a chilling relevance, especially in the health care space. How can these three waves be adopted by insurers?
- The shift toward individualized marketing is already in full swing, primarily because of health care reform, and its main enabler is data—mostly structured data, since insurers are still not ready to fully embrace big data yet. The more accurate and timely information an insurer can collect on an individual member's interactions with the health care system, the more realistic its performance evaluation by the government. Of course, data-savvy insurers won't have to wait for the government to identify gaps in the delivery of care and will proactively work toward closing them. One doesn't need the foresight of IBM's CEO to predict that these insurers would be in the best position to squeeze competition out of the marketplace.
- A system of engagement is also in various stages of existence at various health plans to closely monitor interactions between their members and providers and to proactively manage aspects of the members' health through care management (case management, disease management, etc.) programs. Those familiar with care management would readily recognize the role that predictive modeling plays in identifying and prioritizing candidates for care management. We all know that without the right amount and quality of data, such models are useless. In the coming years, the scope of care management is only going to broaden, simply because the industry has shifted from a model of reactive interventions to proactive care management.
- The idea to make the system of care more personalized to the individual (or families) has been around for a few decades already. For anyone familiar with the concept of patient-centered-medical-homes (formally defined here), the industry is already working, albeit slowly, to realize this vision. Ideals such as continuous and integrated care, seamless coordination and communication, and constant improvement all rest on the effective use, and exchange of information (structured and unstructured) among the various stakeholders involved.
It's safe to conclude that the three waves of the near future are already upon us in the health care industry. Some insurers will ride them more effectively than others, since they will be able to harvest as much information as they can get – from EMRs, lab results, reports, X-rays, MRI results, even genetic data.
To give insurers 18 months to adapt or die might be a bit presumptuous, but it isn’t too hard to predict that it won't take more than a few years to transform the role of big data from a luxury to an absolute necessity for them.
This column originally appeared at Insurance Networking News.