Anyone who has seen the movie Moneyball, a movie about baseball, will remember the opening scene— old guys talking around a smoky table with marked-up stacks of paper outlining the pluses and minuses of draft prospects. The old guys “critique” these prospects with the knowhow of hard-earned experience, and they talk with the familiarity of a weekly poker match.
So when they are presented with a buttoned-up computer kid from Yale who will present his draft picks to them, there is a moment of surprised silence. The kid clicks off his list of little known players to stares of disbelief, and he explains matter-of-factly, “The picks are based solely on statistical analysis.” That’s when you see their world get upended.
Healthcare may be caught in a similar moment, on the edge of a fundamental shift. In Moneyball, the shift from money driving decisions to information driving the decisions upended the World Series and, subsequently, the game of baseball. Big data may similarly upend healthcare.
Admittedly, our opening scene in healthcare has some old guys in the room—half of doctors in the U.S. are over 50 years old—and, yes, they show resistance to change. Meanwhile, healthcare consumers are in the bleachers increasing pressure for a big win. And coming on to the playing field is big tech, betting on its AI prowess and other technology tools to address big data. Can it fix healthcare?
Source: CB Insights
Big Tech’s Growing Interest in Healthcare
Following the money, we see big tech’s interest in healthcare starting to grow in 2012 (see above). In 2012, the top-10 tech companies that were involved in healthcare equity deals were worth about $277 million. In 2017, that grew to $2.7 billion. Driving part of the interest is big data.
“It’s not the data,” said Dr. Eric Topol, director of the Scripps Translational Science Institute. “It’s the analytics. Up until three-to-five years ago, all that data was just sitting there. Now it’s being analyzed and interpreted. It’s the most radical change happening in healthcare.”
What’s in it for Big Tech?
Data-rich Facebook and Google make their money on advertising—an industry worth $200 billion, which is small compared to healthcare’s $3 trillion industry. David Friend, managing director at account firm BDO, estimates a major opportunity for these two tech giants. “In theory, if this is done right, you’ll have 15 Facebooks and 15 Googles. That’s what’s up for grabs.”
While driving a profit is one opportunity, the ability to capitalize on data is key to developing consumer-centric models of care, improving patient outcomes, and lowering costs—which are all critical for healthcare. Healthcare systems are working to accomplish the same goals using big data analytics, sometimes together with big tech companies. A few examples:
- Stanford University School of Medicine, in conjunction with Apple’s new app, Apple ResearchKit, enrolled more than 11,000 patients—in 24 hours—which is more than most medical studies achieve in a year, and they collected much more data in 24 hours than they could have otherwise. This was an “eye opener” for them.
- The Centers for Medicare and Medicaid Services (CMS) was able to prevent a $210.7 million in fraud in just one year using big data analytics.
- Allina Health System, an integrated delivery system of 13 hospitals and 82 clinics in Minnesota, realized more than $45 million in performance improvement savings over the past five years in a project targeting only cardiovascular care across the system.
So back to our opening scene, we have the old guys in the room resistant to change. We have the consumers demanding change from the bleachers. We have big tech on the playing field applying tools to big data to create some wins. We have a few healthcare providers coming on to the field using data to create wins. But who is our buttoned-up computer kid, the one that puts together the “moneyball” playbook? Enter the chief data officer; he or she is there to provide your playbook and your data strategy.
The CDO role is generally tasked with oversight of a comprehensive data strategy, enabling a data-driven culture, creating operational efficiencies and, in some organizations, revenue opportunities. These leaders provide the organization with a clear set of objectives and goals.
The chief data officer enters the scene when healthcare is on the threshold of a major shift. In addition to transforming care, controlling costs and enhancing revenue, data can be used to negotiate competitive rates with insurers, set more accurate (and justifiable) prices for healthcare procedures, and create the transparency that consumers are demanding. Understanding the flow of data will also find hidden opportunities to control costs and enhance revenue. Just your basic “moneyball” playbook.
While the CDO role has gained broad acceptance outside of healthcare, adoption has been very slow inside healthcare. According to the International Institute for Analytics, which ranked various industries’ ability to harness data, healthcare providers came in last—lagging behind all other industries and all other healthcare segments, including health insurers.
"Moneyball" helped level the playing field by looking at information. This is where healthcare providers also start playing the game with new tools and a new type of leader.
Pamela Dixon, managing partner