“Unsexy Plumbing,” Integrated Data And The Future Of The Healthcare System

Healthcare, like so many other sectors of the economy, is being transformed by technology. The changes are most obvious at the front end of healthcare, where health payment solutions, data analytics tools, telehealth, wearable devices and other products and services are addressing the needs of both businesses and consumers.

But just as important is what’s happening behind the scenes, in the healthcare system’s back-end infrastructure. This “unsexy plumbing,” as it has been called, makes the front-end advances possible. For technology innovators, this plumbing also presents myriad opportunities: to reduce costs, streamline processes and shape the future of an industry that touches all Americans.

Despite its importance, the plumbing isn’t working particularly well. Healthcare information remains largely siloed and unintegrated, resulting in reduced efficiency, higher costs and poorer outcomes. According to a survey of IT leaders by MeriTalk, poor data integration is responsible for $342 billion in lost benefits every year as government health and human services agencies struggle to manage different datasets.

Another survey, from the consulting firm Accenture, revealed that only 46 percent of doctors feel that their electronic health records (EHR) system has improved patient outcomes, down from 58 percent in 2012. Moreover, 76 percent of doctors think that the poor interoperability of their EHRs has negatively impacted care. In a further example, a survey of leaders at accountable care organizations (ACOs), conducted by eHealth Initiative, found that accessing outside data, then integrating it, were their first (78 percent) and second (62 percent) most urgent challenges.

Why hasn’t data integration happened faster or been more transformational? Legacy technology is one culprit. Existing regulations, too, are contributing to a lag in data interoperability. For example, according to a recent study by the Association of State and Territorial Health Officials, “Privacy-related barriers may discourage [health information exchange] and one state’s policies, and practices may conflict with another state’s or with federal laws.” Nevertheless, the momentum behind data integration is growing.

The Government Is Making (Some) Headway Toward Data Integration

At the public level, health information exchanges, such as the California Integrated Data Exchange (Cal INDEX) and the Statewide Health Information Network of New York (SHIN-NY), are working to gather and share health data, with the goal of reducing costs, increasing efficiency and, ultimately, improving the quality of care.

The Meaningful Use standards established by the Centers for Medicare & Medicaid Services (CMS) are another example of the government’s role in promoting data integration. By offering payment incentives to healthcare providers and organizations, CMS encourages the implementation and “meaningful use” of healthcare information exchanges and qualified EHRs, among other objectives. While it’s too soon to gauge the program’s full impact, the incentives should ultimately lead to an expanded use of interoperable data, which will in turn support improved care and outcomes.

The momentum behind data integration is growing.

New regulations under the Affordable Care Act are also propelling the growth of integrated data. For example, the ACA’s “Cadillac tax,” set to begin in 2018, will tax workers’ health benefits above a particular threshold. This will encourage some employers to shift employees onto the public exchanges, where they can shop for their own insurance.

Other employers, however, will prefer to remain with their traditional providers — if they can find cost-effective plans and benefits that meet their employees’ needs. With integrated data, carriers and brokers will be able to show employers how plans compare, whether the plans avoid the tax or not and how differences in coverage may impact workers.

Furthermore, the ACA mandates that only 15-20 percent of an insurance company’s spending can go to administration. Because data integration reduces the administrative burden, insurers have another reason to push for integration. Greater reliance on electronic records should also help reduce the staggering ~$400 billion lost every year to waste and inefficiency resulting from the use of paper records.

The Private Sector Steps In, And Data Integration Begins To Take Off

Increasingly, however, data integration is being driven not by government agencies or regulations, but the private sector. Combining data integration with innovative cloud-based solutions and advanced APIs, companies in this space are creating products and services that improve the quality of care, give consumers more choice and strengthen businesses’ brands and bottom lines.

For example, IBM’s Watson Health Cloud is gathering the health records of more than 50 million people in a secure cloud hub, thus demonstrating the potential of “big data.” With access to this information, doctors will be able to identify patterns in disease progression, learn which treatments are working across populations and provide better outcomes for patients with similar conditions.

Wearable devices such as Fitbit, Jawbone and Apple Watch, as well as smartphone-based applications such as Apple’s ResearchKit, hold tremendous promise as sources of big data. According to a 2014 PricewaterhouseCoopers survey, more than 20 percent of Americans own a wearable device, generating vast amounts of health data every day. A growing number of technology players are focusing on capturing this data and integrating it into EHRs.

Once the data is in an EHR, a physician can offer better care to the device wearer. Uploaded to a platform such as the Watson Health Cloud, the patient’s information, combined with that of thousands or millions of others, can help researchers gain a clearer understanding of population health.

The unsexy plumbing at the backend of the healthcare system has never been more important.

Few would argue that the implementation of EHRs has been smooth. Still, the clear advantages of electronic records over paper records, as well as the Meaningful Use incentive program, have led to an explosive rise in the use of EHRs: from 2008 to 2014, the percentage of hospitals adopting EHRs went from just 9 percent to 76 percent, according to the American Hospital Association.

The EHR of the future will provide more seamless connectivity within healthcare organizations and to systems on the outside. Data will be more readily available and useful, entering it will take less of doctors’ time and it will support not only the patient’s care, but larger public health initiatives.

In the insurance sector, software tools now bring together large datasets of health plan information that was previously siloed among different carriers. As a result, it’s easier for agents and brokers to create more customized quotes and offer better plan selection. Thanks to the instantaneous availability of data, a quoting process that used to take weeks now takes seconds.

At the same time, companies such as Castlight, ClearCost Health and HealthSparq are using integrated data to help enterprise customers’ employees compare procedure costs from different providers, make more informed choices about when and where to seek medical care and understand how much it will cost from the first doctor visit through the final discharge.

With these and other innovations dependent on integrated data, the unsexy plumbing at the backend of the healthcare system has never been more important. The technology companies that can get data integration right, and create the products and services to meet the needs of doctors, patients, consumers, businesses and other key audiences, will be healthcare’s true change-makers in the years ahead.