Healthcare Struggling to Realize Big Data ROI

In a panel this past week at the 10^th Annual Connected Health Symposium, healthcare experts expressed frustration with how little ROI industry big data programs are providing for patients – though not all looked grim.

The report comes from Clinical Innovation + Technology, which reported that healthcare administers on a panel voiced disagreement over just how useful new big data technologies have been. “I don’t think big data has generated a big return on investment for sick or healthy people,” Chris Kryder, MD, MBA, chairman of Valence Health, reportedly said.

However, the CEO of healthcare intelligence firm Humedica, Michael Weintraub, provided some anecdotal evidence that shows that there is at least some benefit being realized by new big data technologies in the healthcare arena. “We’re seeing seven-figure reductions in costs by keeping people out of the emergency department, pushing information to ensure follow-up and compliance with medications,” he told the audience, stating that some organizations are seeing as much as 75 percent reduction in readmissions for heart patients.

A large part of the challenge that medical organizations are facing matches with anecdotal trends happening across industries in how big data is being applied – namely how does big data change behavior? “The hardest part is getting people to learn how to deliver medicine differently,” said Stephen McHale, CEO of Explorys, adding that a lot of time is being spent on trying to change behavior, which wasn’t a part of the initial planning. “The change management issues here are significant,” he said. “We’ve changed the way we approach the effort and resources to apply into this environment.

This mirrors a point made by Facebook’s Ken Rudin in a parallel talk last week at the Strata + Hadoop World conference. In his talk, Rudin expressed that having predictive analytics isn’t enough – it’s the behavior changing action taken from the insights that matters the most.

“Everyone feels that the goal of big data is to give you actionable insights,” he said. “It’s not.” The goal of big data, said Rudin, is to do something about the insights. “You need to close the gap,” he said. “You need to go the last mile and evangelize your insights so that people actually act on them and there is impact.”

“There’s a saying that culture eats strategy for lunch. Your strategy doesn’t matter if the incentives and economics aren’t there,” said Humedica’s Weintraub, noting that big data is currently being compartmentalized within healthcare organizations. “Once information is pushed to those who consume the data, we’ll start seeing the investment eclipsed by the savings. It’s going to take several years and a bunch of failure.”

Jean Drouin, MD, MBA, and director of McKinsey & Company, painted a staggering picture showing just how far healthcare may have to go to realize its full potential, noting that there are 600 specific customer “journeys” in banking. “To fundamentally improve business processes, we need to get that granular in healthcare.”

McKinsey & Company published a report this past spring estimating that big data-based healthcare initiatives have the potential to impact total annual costs by as much as $300 billion to $450 billion in reduced health-care spending.

“Our estimate of $300 billion to $450 billion in reduced health-care spending could be conservative, as many insights and innovations are still ahead,” McKinsey said in its report. “We have yet to fully understand subpopulation efficacy of cancer therapies and the predictive indicators of relapse, for example, and we believe the big-data revolution will uncover many new learning opportunities in these areas.” How quickly these savings are realized may be up in the air, however, as the industry moves from a fee-for-service to an outcome based payer model.

A lesson to be taken through all this as executives in other fields examine big data installations of their own is to consider the cultural impact of new big data insight programs, drawing a line between the insights and the ROI.

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