The barriers to health market data

Your mission (should you choose to accept): Create a detailed budget for you and 10 of your closest friends for all the food you will collectively consume over the next year.

How much will this cost? Which sellers will you buy food from? How do you estimate the needs of each person? This seems like a tough mission. Fortunately, you have something to make your task easier. You have magically gathered your friends’ detailed grocery, restaurant, DoorDash and other food-related receipts from the past two years and compiled them into a tidy database. Using this data, you could analyze their purchasing habits and create a budget for the year to come.

Now imagine scaling this concept to the $4.5 trillion US healthcare marketplace. That sounds like an impossible mission.

This would be quite possible if you had access to healthcare purchasing data similar to the detailed grocery receipts in our analogy. Fortunately, there is an abundance of this exact type of data throughout healthcare, but it is not systematically organized or delivered where it is needed to support market efficiency. This data, properly leveraged, opens opportunities for massive cost savings, innovation and better care outcomes.

Leveraging marketplace strategies in healthcare
We often treat healthcare services differently than other industries, assuming healthcare is too important for normal market mechanisms that efficiently balance supply and demand. In certain cases, this might be true, such as the rules ensuring that adequate emergency services are available close to wherever people live, without regard to the ability to pay.

However, considering our food analogy, access to nutrition is at least as important to life and health in our society as healthcare. While we rightly provide targeted social support for access to food, the marketplace for food is predominantly structured as a free market, with market-based demand and supply mechanisms such as the ability to compare prices and easy access to product availability information.

In the food industry, detailed market transaction data is employed to inform suppliers what to sell, stock and distribute. Further up the supply chain, market data guides what to produce and grow. Extensive data is provided to buyers, whether they are individual consumers or bulk buyers like restaurants or stores, in the form of granular availability, price and quality data. This helps buyers create their purchasing strategies.

At more than three times the size of the food industry and representing more than 17% of the US economy, we need every successful tool and strategy possible to make healthcare more accessible and affordable. This includes leaning harder into adopting free market practices that help other industries more effectively balance supply and demand.

Healthcare markets’ need for market data
These market principles can apply in healthcare. With a shift to market-based thinking, consumers can evolve from “I need to go to a doctor” to “I need to make a critical, informed purchase of healthcare.” A claims manager at a health insurance company can elevate from “reactively paying millions of dollars in medical claims” to “intelligently purchasing millions of dollars of healthcare services.”

In these examples of healthcare marketplace decision making, these buyers need to optimize their decisions for access, cost and quality. This information needs to be accurate, timely and understandable at the moment of their decision.

Ubiquitous healthcare data, everywhere
The healthcare market data we need is everywhere, all around us. But it reminds me of the line “Water, water, everywhere, nor any drop to drink.” We can start with the healthcare bills we receive as consumers—all the bills from medical providers, all the “explanations of benefits” (which confuse more than explain) from our insurers. Billions of these documents are created every year.

For the health market professionals working at America’s provider and insurer organizations, this data is pervasive, almost unavoidable. But exposing and organizing this information to use at the points of decision making has been difficult so far.

Barriers to health market data
Hoarding: Quality, access and especially price information has been carefully guarded by healthcare payers and providers for decades. The price of a medical treatment is typically unknown until well after a treatment has been completed, and the patient has guaranteed they will be responsible for the unknown charges. Generally, health market information has only been provided when mandated by governmental regulation.

Complexity: The US healthcare system generates exabytes of data annually, spanning patient records, insurance claims and billing codes. There are more than 9 billion healthcare claim transactions annually; the average hospital manages 50 petabytes of data in electronic health records, imaging and billing systems per year; and there are 71,000 diagnostic and 82,000 procedural codes.

Inertia: Legacy IT systems are deeply embedded in healthcare. Seventy percent of healthcare organizations still use fax machines to send and receive many medical records. Most data is transmitted using 40-year-old EDI protocols that would make modern, real-time marketplace applications found in other industries—like Uber—impossible.

Trust: Much of the data that needs to be cleaned, shared and analyzed is patient data. This data must be anonymized and secured.

Utilizing ubiquitous data in micro and macro settings
The scale, heterogeneity and regulatory complexity of healthcare data make it uniquely challenging to manage and analyze. Reducing this complexity can be accomplished with standardized data-sharing protocols, AI-driven tools for automation and investments in consumer experience.

When this data is simplified and provided to consumers when they need it most—at the micro point of making a personal healthcare purchasing decision—that consumer’s use of this information for their own benefit immediately contributes to a more rational healthcare marketplace.

At a macro scale, payer and provider access to this data pinpoints demand and supply mismatches, reduces pricing inconsistencies and optimizes costs, leading to a smarter and more affordable healthcare system.

Our industry’s health market professionals can leverage data, technology and relationships to measurably improve healthcare access, cost and quality. To make this happen, we have a lot of work and opportunity ahead of us. Forbes