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Analytics Can Expand Health Insurers' Role

Insurers can help solve problems such as medication errors and duplication of services if providers share clinical and financial data, says new PricewaterhouseCoopers report.

Nicole Lewis

September 18, 2012

4 Min Read

IW 500: 10 Healthcare IT Innovators

IW 500: 10 Healthcare IT Innovators

IW 500: 10 Healthcare IT Innovators (click image for larger view and for slideshow)

As the healthcare industry increasingly relies on analytical tools to provide care metrics, insurers that identify the right data and incorporate informatics into their organizations are likely to transform healthcare, concludes a new report from PricewaterhouseCoopers.

According to the report, by creating actionable information, insurers can make a valuable contribution to healthcare that can have a positive impact on healthcare providers and health plan members. Despite that potential, PwC found that three-quarters of healthcare providers surveyed by its Health Research Institute say that they are not effectively aggregating, integrating, or developing performance measures, or acting on clinical data.

"Working together, providers and insurers can use informatics to tackle problems such as medication compliance, duplication of services, improved outcomes, and a reduction in medical errors," the report states.

Advancing healthcare informatics: The power of partnerships summed up interviews with 14 executives at health plans and industry organizations, and also relied on previous surveys with more than 600 provider, health insurer, and pharmaceutical and life sciences professionals.

[ Related: When Medical Informatics Clashes With Medical Culture. ]

The research suggests that health plans are undergoing monumental change in their relationships with providers, health plan members, pharmacies, and other stakeholders. According to John Edwards, a director at PwC and co-author of the report, much of the change has been brought on by the Patient Protection and Affordable Care Act as well as the HITECH Act.

"There is going to be a sea change in the use of informatics within payer organizations, partially due to health reform," Edwards told InformationWeek Healthcare. "Payers can no longer deny coverage based on pre-existing conditions so they have to manage the risk rather than avoid it."

Insurers can overcome some of that risk through collaborating with health providers in an accountable care organization, in which health insurers can use informatics to improve the health outcomes of a large population.

"Insurers bring strong actuarial skills to the table that can help providers calculate the cost of current and future business risk. They can also provide physicians with financial strategies for managing costs and metrics for driving quality improvements on a large scale," the report said.

Health plans also are in a position to expand data components that include demographics, community health, and social media, which the report says are examples of rich consumer information. These resources present untold opportunities for health plans to learn from, as well as to use as vehicles to do a better job of communicating with members.

Already, there are real-world examples of health plans using data to improve care, according to the report. For instance, United Healthcare, Kaiser Permanente, and the Geisinger Health Plan all have collaborated with health providers to analyze patient data and uncover actionable insights leading to improved care and cost reductions, it says.

Still, researchers say there are obstacles that could hamper health insurers' ability to become data partners with providers and other stakeholders, including:

-- Lack of trust between insurers and providers. In some cases, they don't even trust the quality of each other's data.

-- Insufficient funding. Forty-three percent of providers surveyed by HRI said lack of funding was an organizational barrier in developing informatics programs.

-- Absence of technology and business tools for personalized care. The industry is moving away from individual care, which uses medical claims data to provide targeted single services, to personalized care, which aims to integrate the member's unique clinical, social, genetic, and environmental information to maximize overall health. The industry has yet to build technology required to support this level of advanced knowledge and scale it operationally.

InformationWeek Healthcare brought together eight top IT execs to discuss BYOD, Meaningful Use, accountable care, and other contentious issues. Also in the new, all-digital CIO Roundtable issue: Why use IT systems to help cut medical costs if physicians ignore the cost of the care they provide? (Free with registration.)

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