A sizeable chunk of healthcare executives anticipate dedicating 15 percent or more of their budget to predictive analytics in 2018.
Perhaps the reason they're pledging a healthy slice of their budget is the savings potential they see in predictive analytics. Fifty-eight percent of execs say they'll save 15 percent or more over the next five years, a 5-point increase over 2017, according to a report from the Society of Actuaries.
Providers were more likely to anticipate these savings than payers, with 75 percent of provider execs foreseeing that kind of return, compared to 44 percent of payers.
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"You have to have the leadership buy-in and dedication to using that information, as well as dedication to using the processes to implement these solutions."
Lillian Dittrick, Fellow of the Society of Actuaries
Lillian Dittrick, Fellow of the Society of Actuaries, said the potential for cost savings depends on how predictive analytics are used. It starts with the patients.
"Whether you're on the provider side or the payer side, there's a lot of cost reduction to be gained by really understanding your patient population," she said. "The more common model that I've seen is really around inpatient and the emergency department, because there is a lot of preventable activity that happens there. As far as best practices, there are a number of tools out there -- like NYU has an algorithm around the ED, curbing visits that can be classified as avoidable."
If a provider sees patients that have a pattern of repeated visits that are avoidable, that provider needs to have a plan in place -- such as ensuring the patient has a primary care provider who's addressing their needs in a timely way, said Dittrick.
The use of predictive analytics has remained fairly steady. A full 85 percent of executives said they're either using them currently or plan to in the next five years, and 87 percent say they're important to their business. A scant 3 percent don't use them and don't plan to.
While current use is high, the report found a 7 point year-over-year decline in the number of executives currently using predictive analytics, a trend driven primarily by payers. But 26 percent of payers anticipate using predictive analytics in the next year, a 10-point increase from 2017, and an indication that the analytics market is poised for future growth.
Not all predictive analytics users are currently experiencing savings, but Dittrick said that's likely because they're at an earlier point in the predictive modeling journey.
"In my own experience, it can happen pretty quickly," said Dittrick. "You have to have the leadership buy-in and dedication to using that information, as well as dedication to using the processes to implement these solutions. If you have the alignment of all those pieces, I think you can fairly quickly start seeing results."
There are challenges to implementing predicting analytics processes that might be affecting their current use, the survey showed. In 2017 for instance, "lack of budget" was the biggest challenge for both payers and providers, at 16 percent. This year, health execs added a couple of additional issues, with lack of budget (14 percent), regulatory issues (14 percent) and incomplete data (14 percent) all seen as equal challenges.
Dittrick expects that the changes and evolution of the technology will help to offset some of the concerns, and sees the most effective analytics platforms as encompassing the entire process, from having physicians championing the initial development process of a given solution, to having them pilot the work.
That way, said Dittrick, "you can have a good product and solution with your pilot group, and then use those who were your initial champions to spread that."
A slight majority of executives, 52 percent, said the ability to reduce costs was the most important outcome to achieve with predictive analytics. That's a 9-percent increase from last year.
Beyond cost, though, 43 percent of executives see patient satisfaction as a valuable outcome, while 39 percent cite staffing and workforce needs.
Focusing on quality, said Dittrick, is one of the keys to predictive analytics success.
"If you just go in with the cost savings in mind and you're not paying attention to quality, you're not going to be successful," she said.
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