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September 9, 2013

Preparing for Obamacare’s Big Data Analytics Opportunity

Alex Woodie

Healthcare organizations around the country are gearing up for January 1, the first day that key provisions of the Affordable Care Act (i.e. Obamacare) go into effect. Nobody’s 100 percent sure how the law will play out, but one thing is certain: the role of data analytics in the country’s medical establishment is about to get bigger.

The ACA is driving healthcare organizations to adopt analytics in several ways. For starters, there are the 30 million uninsured Americans who will be welcomed into the nation’s medical system as a result of the individual mandate, which goes into effect January 1. 

Not all of these people will be covered, and some are expected to opt to pay a fine instead of signing up for a private insurance plan through the new state exchanges or opting to get coverage through expansions to state Medicaid programs. But many of them will have coverage, and analytics will be called upon to understand exactly how these new patients are impacting cost and care at hospitals, clinics, and doctor’s offices around the country.

Another way that the ACA will foster greater use of analytics is the push to create new accountable care organizations (ACOs). These ACOs seek to contain medical costs and “bend the cost curve” by moving away from the traditional pay-for-service approach in favor of an approach that favors evidence-based outcomes.

One organization that’s grappling with the ACA, new patients, payment reform, and the looming tsunami of medical data that will accompany all these changes is the Colorado Healthcare Association, a Denver-based group that provides a variety of resources to 95 hospitals and healthcare systems throughout the state.

One of the CHA’s responsibilities is to provide analytics to its members, to help them measure how they’re delivering care, how their costs compare, and how they can improve on the quality and cost equations, explains Chris Tholen, the CHA’s vice president of financial policy. 

“What we’ve really looked at historically in data is organizational data, or maybe, at most, aggregate claim-level data,” Tholen says. “That’s probably as far as we’ve ever drilled before. And that does provide some information, but it requires the hospitals to either make assumptions on that data or it requires them to use it as a starting point for their own data analytics.”

The CHA was hitting the limits of what it could do with Excel and Access, so it went shopping for new data analytic tools that could handle the expected increase in volumes, as well as the deliver the capability to drill deep down into the nitty-gritty, claim-level detail. It eventually settled on the in-memory Alteryx Strategic Analytics product, which a new two-person analytics department has been working with for several months.

The new tools not only enable the CHA to handle more detailed data, but it will be able to keep up with the expected increases in volume of data, and to perform the analysis more quickly than before.

“We’ll allow our hospitals to look at peer groups and compare themselves in the utilization of services that happen for any specific groups of diagnoses,” Tholen says. “We’ll be able to benchmark them and show them where their care delivery is more efficient or where there are opportunities to improve efficiencies.”

A big part of the analytics enhancement is getting ready for January 1, when the ACA kicks in. “We’ll have entire new populations coming into the system, including a greater numbers of Medicaid patients, and a greater number of people that are just above the Medicaid line but are receiving subsidized insurance,” Tholen says. “We’ll be able to help our hospitals understand how those populations are impacting their hospitals from a volume perspective.”

In addition to coping with data volumes that were higher than anything it’s seen before, the CHA is also looking to use Alteryx’s “data blending” capabilities to bring more outside data into the equation. This includes expected increases in data from Medicad, in addition to “syndicated” data that’s available on the open market.

“We have the internal data that hospitals have been providing us, and now we have this new external data,” Tholen says. “Alteryx allows us to take sources with different formats and different levels of information and be able to put them together to hopefully be able to build some synergies that are bigger than any one data that we’ve looked at individually before.”

Big changes are afoot in the $3 trillion U.S. healthcare market, and the CHA is doing its part to ensure that its members have the data necessary to make good decisions going forward. “We do understand payment reform is coming, and quality is at the forefront of healthcare reform,” Tholen says. “We recognize in Colorado that the transparency, availability, and level of information is changing very rapidly.”

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