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Spending on healthcare data and analytics is rising significantly, according to a recent survey. What factors are pushing the trend?
Our latest healthcare technology survey is in, and the data are clear. After gaining the insight from 38 individuals at global technology firms, population health management companies, and digital health organizations, the majority of our survey respondents expect to see growth in healthcare. Of these respondents, 25% are targeting 30% or more in growth in 2018. But even more interesting is the fact that data and analytics was by far the single biggest area identiﬁed by respondents (76.3%) for increased technology spend in 2018.
The underlying components behind this trend are simple: The march toward value-based care continues unabated. Improvements in population health are necessary to make value-based care a reality. And these improvements will not happen without big data and analytics, to actually glean actionable insights from the wealth of new information that’s now available.
For further proof of this trend, consider that, according to Healthcare Growth Partners (HGP), their health information technology (IT) index gained an astonishing 25%. Health IT merger and acquisition activity and valuations hover at all-time highs. And you may want to sit down for this part: Global IT investment is up 849% since 2011, and investment in US health IT is up a staggering 583% during the same period. Rock Health also recently identified the top 6 funded value propositions in 2017 and found that consumer health information was the most funded, as demonstrated by 5 of the 8 mega deals that happened during that period.
So where exactly is all of this investment in IT and analytics headed? Cognitive computing and its subset, artificial intelligence (AI), are playing a big role, with Accenture forecasting that the market for AI in healthcare is expected to grow 10-fold during a 5-year period. This is probably due to the fact that this forecast also predicts a $150 billion in savings opportunity for healthcare through AI applications to enhance diagnoses, boost efficiency and even accomplish such far reaching tasks as assisting in surgery.
These types of learning systems can augment human thinking and reasoning capabilities to pull insights from structured and unstructured data alike. Effective variations of cognitive computing and AI never stop learning. They can identify hidden markers of disease that a manual review might miss, predict health population trends through a review of lifestyle data, and offer potential solutions to complex individual care challenges through deterministic processes based on the expertise of everyone who has contributed to the healthcare value chain.
We also need to pay attention to that hot new upstart known as blockchain. By using a distributed database consisting of groups of blocks that only approved members of a network can access, this technology offers the promise of much higher trust and transparency for healthcare data. This can enable silos of healthcare data to open up between systems, each with a potential piece that can unlock a revelation in terms of treatment for a chronic condition or a fix to current inefficiencies and restrictions in our healthcare system, which are driving up costs of care. Blockchain can also eliminate unnecessary third-party processing of financial transactions between payers and providers, driving costs of care even lower.
Blockchain’s potential impact on interoperability cannot be understated, as interoperability is one of the critical issues creating a headwind against progress in healthcare analytics. Interoperability must move beyond simple interfaces to the point where all data, all the time, is fully accessible to cognitive computing and advanced AI. It's the only way these technologies can yield the results that all current investments in research and development are pursuing.
Healthcare data live in more places than ever before. From the proliferation of electronic medical records and the real-time information collected by wearable devices through the Internet of Things (IoT) to the financial histories locked away in payer systems, interoperability’s reach must expand ever further and cast an ever-wider net to be effective.
Regulatory burdens placed on healthcare organizations, such as patient privacy issues associated with HIPAA, can prevent this free flow of information. But healthcare businesses can also place restrictions on data sharing in the name of protecting proprietary assets. And IT resources can be stretched to the limit trying to incorporate the new data inputs that come online through IoT devices and new cloud-based technologies. All of these factors can come together to choke off the essential healthcare data raw materials that analytical algorithms are waiting for to create new diamonds of visibility.
Interoperability is a definitive an area of concern, as half of our survey respondents cited this challenge as the second-biggest obstacle to their IT spend growth in healthcare. And an even larger majority (60.5%) feel that enterprise readiness to adapt to new technology is another headwind against growth. If we’re going to unlock the power of healthcare analytics to its full potential, then it’s us, not just the algorithms, that need to evolve.
When you look at common predictions for 2018, you see analytics, AI, and blockchain coming up as recurring themes. These technologies are steadily becoming part of healthcare's mainstream consciousness, and we'll see them more and more as embedded parts of digital health applications and as a force to improve population health management. Looking ahead, we should not ignore the opportunity to apply analytics to address our pressing public health issues, such as the current opioid crisis. If we can overcome the interoperability chokepoints, then analytics-driven insights can transform how we address some of the heaviest burdens weighing down our system and start shifting many different healthcare trends to the right direction.
Paddy Padmanabhan is the author of The Big Unlock: Harnessing Data and Growing Digital Health Businesses in a Value-Based Care Era (available on Amazon). He is the CEO of Damo Consulting Inc, a healthcare growth advisory firm based in Chicago. You can follow him @paddypadmanabha.