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."

To be fair, notes Josefowicz, some respondents are simply conducting business the way most do in a down economy - by dealing with a limited IT budget, therefore making data a lower priority.  "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."

Even so, these findings cast a pall over plans to quickly digitize the health care system.  


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."

The president and his advisers are aware of the problem, and have a valid argument - it is possible to conduct health care business electronically. In fact, EHRs have been in place for years as part of a larger integrated health care delivery system in the U.S. Veteran's Administration. Yet, the United States lags painfully behind Canada, England, France, South Africa, Australia, Hong Kong and Taiwan, which either have a nationwide EHR system, or are developing one. 

Thus far, federal mandates have shown little evidence of having created change in the market. Business drivers, say experts, will ultimately play the leading role, and it appears that patients want EHRs, too. According to a survey sponsored by National Public Radio, the Henry J. Kaiser Family Foundation and the Harvard School of Public Health, three out of four Americans think it's important that their health care provider use electronic records. However, 60 percent of those surveyed said they are not confident EHRs will remain confidential.

"The growth of EHRs will change the way health insurers do business," notes Josefowicz. "Having a strong data infrastructure and level of expertise in terms of handling these data feeds is key."

Helping patients feel protected and empowered to make judgments about their health care is a key value proposition for the health insurance industry. Yet Deloitte's Keckley maintains that health insurers are not making the most of their opportunity to become a trusted source to their members. 

"There is a huge opportunity for health plans to provide tools to assist enrollees in managing their health care decision-making," Keckley says. "Where insurers fall short is in the personalization of these tools."

In other words, customers need tools that provide more than information on premiums and benefits, and they need to be available at the moment a patient needs to make a decision about treatment options, choice of physician or hospital or prescription drugs. 

"There is a dearth of tools available to help them make those judgments," Keckley says. "This deficiency is occurring among physicians and hospitals, and health plans fare only slightly better." Keckley maintains that the opportunity for both insurers and providers begins in the back office, "with the assembly of information that can assist enrollees during their teachable moments. The structure of the data must be such that it can deal with more than claims history."


To create unique value, insurers can personalize the data to reflect clinical, nutritional, language and even religious preferences of members. 

"This is a type of health coaching that no health plan is doing today," says Keckley.

Novarica's Josefowicz believes that the key to providing this type of service rests in an insurers' "world view" of its data.

"An insurer's number one asset is the knowledge they have about their customers," he says. "It's most important to think of data as a strategic asset. Health insurers may consider pricing algorithms or pricing models as a strategic asset, but putting data in there is key."


Putting it into Practice

Hartford, Connecticut-based Aetna is one health insurer that has realized the importance of patient data as a strategic asset with a philosophy that puts its 12 million members at the center. Like many health carriers, Aetna initially used its data to support claims, but over the last several years, the company has been leveraging data in the back office to compile the internal and external data streams of member information. Aetna's health information management systems and electronic medical records are now integrated.

"We have a lot of money invested in the data infrastructure," says Dan Greden, Aetna's head of e-health product management. That data infrastructure made it possible for the carrier to launch a consumer-directed health care initiative five years ago.

"At that time, we had 1 million members who had a PHR [personal health record] available to them," Greden says. "With the most rapid increase seen in the last 15 months, today we have close to 9 million members taking advantage of this program." 

Although the ratio of PHRs to EMRs is still considered low (Greden estimates it's currently at about 20 percent), that number is changing. When Aetna members realize they have access to their own personal health records containing pharmacy, lab or claims information, they come back to the carrier's Web site and use it repeatedly to check benefits, claims status, take a health assessment or review treatment records.

"The member's comprehensive record is married to what we call our 'care engine,' so care can improve because the member can share this record with their provider," Greden says. "This is why our usage is higher than what the rest of the industry sees."  

Josefowicz asserts that Aetna has provided a model, but the greater industry is not ready to develop the business case for PHRs. "A large number in the survey - more than half of the respondents - are still immature in developing the business case or strategy for managing PHR information, and very few have gotten close to deploying. This will have to become a business strategy because insurers like Aetna will create that atmosphere."


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