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Insights as a service model claims it can get healthcare needed analytics without massive investment

For some, acquiring technology, building data infrastructure and hiring IT professionals to crunch the data is just too costly.

Jeff Lagasse, Associate Editor

Healthcare leaders are drowning in data, but finding the resources, the time and staff to make meaningful use of the numbers can be tough to accomplish. That's giving rise to a new industry dubbed "insights as a service" that advocates say is poised to assume a larger role in the world of health.

Tracy Currie, CEO of insights company Capto, said healthcare is ripe for utilizing this kind of service because there's been a push in recent years to make better sense of the wealth of data that's being generated.

"The biggest challenge they're having is a lack of skilled data scientists with a healthcare background," said Currie. "There are maybe about 15,000 healthcare informaticists out there. The demand will grow to about 70,000 over the next few years."

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To date, the healthcare industry has responded to the glut of data by acquiring technology, building data infrastructure and hiring IT professionals and analytics wonks to squeeze from the data the most business value. Doing things in-house, however, requires a lot of upfront investment, and while there's been a return on that investment, Currie sees outsourcing as a way to drive down initial costs.

"If I'm interested in where I should employ and build new facilities based on my population data -- if I've got a host of diabetes patients in two hotspots in my area -- should I build facilities there? To be able to do that kind of advanced data analytics using my healthcare record data, as well as publically available third-party data around macroeconomics across zip codes … that could take me two to three years to stand up to that capability," said Currie. "It could take me six months to a year to build up the data analytics for that solution."

Instead, a provider can turn to an insights-as-a-service vendor to answer those questions.

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"A third party has got the data scientists to phrase the question properly and come back with an answer in weeks as opposed to years," he said.

The real value in outsourcing insights, he said, is in the time saved, as well as the effective deployment of capital. Once an organization has spent the capital and built its facilities, it needs to acquire the informaticists to turn that into a business value -- assuming they want the operation to be in-house. Otherwise, Currie contends, they've spent a lot of that capital for nothing.

While insights as a service is still in its infancy in the realm of healthcare, it's a little more well-established in other arenas. Sven Gerjets, the former CIO of Time Warner Cable, outsourced insights during his tenure there, and he said it allowed his company to start making decisions much more rapidly, and intelligently.

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One example was the company's method of selling advertising to its customers. Using insights as a service, Time Warner discovered that advertisements were essentially worthless if they were presented to someone three times or less, or more than seven times. The optimal strategy was to get the ad in front of customers' eyes between four to six times.

The moral for Gerjets was that an outside party looking at the numbers can sometimes spot patterns that in-house staff can't, generally due to either lack of time or training.

That specific scenario cost Time Warner about $120,000, primarily for labor. Gerjets said that when a similar project is done from within an organization, the cost can be much greater.

"One of the things that happens in large companies is they build for scale early on, and they don't experiment before they build for scale," he said.

"Having those real-time views, and the ability to put a lot of brains to something and getting some unique ways of looking at it, is vitally important, especially when it comes to insights. When you take that data and put a different lens on it … you may see something totally different in that data set. It's a really powerful thing."

Gerjets sees a lot of parallels between large consumer businesses and healthcare, which is becoming a large consumer business itself.

But Currie sees one major difference in healthcare. In other industries, he said, making meaningful use of data is a choice -- often a smart one. In healthcare, he said, it's an imperative.

"In communications, they're used to dropping a huge chunk of capital on an annual basis," he said. "You don't see that in healthcare. It's a much different dynamic."

One of the biggest shifts in thinking that comes with insights as a service is that you're not purchasing a technical capability, said Currie. You're buying a business outcome.

"You want to be focused, and build an economic relationship with the provider and the buyer, so they both get a benefit out of the answer," he said. "If I'm able to reduce my readmissions by 30 percent using big data and analytics, I'm going to pay my provider for that outcome, not on how many queries they run."

Still, the industry is currently in what Currie calls an "aspirational" phase. But that could well change. He predicts that services firms will start to offer insights as a generic offering by the far end of the next five years.

"In the future, all but the largest systems will probably be doing this," he said. "It just makes economic sense."

Twitter: @JELagasse

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