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The Challenge and Opportunity with Big Data in Health Care

By: Daniel McLaughlin, M.H.A.

The expansion of Electronic Health Records is presenting an unprecedented opportunity to make significant improvements in the American health care system. However, for this opportunity to be realized, new methods of data management and analysis that are uncommon in health care will need to be deployed.

Organizations that have mature electronic health records have conquered the challenge of moving data from operating systems into data warehouses and are using them for substantial improvements. For example, a question that had challenged researchers for many years was whether traditional low-priced blood pressure control was as effective as newer, more expensive drugs. To answer this question, NIH conducted an extensive trial that took eight years and cost $120 million. The results indicated that: the oldest and cheapest of the drugs, known as thiazide-type diuretics, were more effective at reducing hypertension than the newer, more expensive ones.

However, some patients did not respond to these drugs and needed to use the newer drugs – but which ones? Unfortunately, NIH did not have the funds to conduct a follow up study. By the time the NIH study was complete, however, Kaiser Permanente had an extensive electronic health record and data warehouse. By using real patient data in their warehouse and traditional statistical methods, the researchers had the answer in 18 months for $200,000.

Although traditional scientific methods and statistical tools work well for some health care questions, they cannot be easily applied to many interesting questions such as:


  • Which doctors have the most cost effective risk adjusted care patterns based on actual cost of care – not charges?
  • What are the characteristics of patients that can predict the level of non-compliance with discharge orders and the probability of re-admissions?

The challenge of answering these questions is best illustrated by the complexity of the data bases. A standard electronic health record for a patient will have over 2,700 fields. A charge master for a hospital can easily contain 20,000 separate services and prices. Traditional statistical methods flounder in this environment.

Fortunately, data mining professionals (particularly in retail) have developed new tools such as market basket analysis, classification algorithms, association rules, cluster analysis and neural networks to understand these massive data bases. Hopefully, these techniques will soon migrate to health care to support substantial improvements in care delivery.

To learn more about how the new tools of data mining and other technologies are changing the business of health care, attend the UST Executive Conference on the Future of Health Care on Friday, November 9, 2012 at the University of St. Thomas Minneapolis campus.

Financing, Health Policy, Leadership, Operations Improvement, Uncategorized

Ask the health care expert!

19172737Do you have questions about health care leadership skills, management, physician leadership, operations improvement, business intelligence, or strategy; health care reform and the Affordable Care Act; education and careers in health care; or other industry topics?

Whether you’re a student, novice, or a seasoned health care professional, our experts are here to help! Send us your questions, no matter how simple or complex, and faculty from the UST health care programs will respond to your questions on the High Performance Health Care blog.

To submit a question, simply leave a comment below or tweet it to @USThealthcare. Ask a question anonymously or specifically about your business – it’s up to you. Take advantage of this opportunity to get practical advice from our business and health care experts!

Financing, Health Policy, Leadership, Operations Improvement, Uncategorized

Essential benefits and the battles to come

A key part of the Affordable Care Act (ACA) is the creation of state-based Health Insurance Exchanges to offer individuals and small business a standardized health insurance product. These policies will resemble benefit packages of small employers. Each of these health plans in the Exchange must provide an “essential benefit set” of services. But what does that mean?

In 1993 President Clinton’s task force on health care reform decided to define the essential benefit set as part of his health care reform proposal. A significant amount of the opposition to his plan was from provider groups that were excluded.

In 2010 the architects of the Affordable Care Act took this lesson to heart and developed a multi-step process which would define the essential benefit set of services over a number of years. First, the Institute of Medicine was asked to develop a process and guidelines for the initial development of and long-term updates to the benefit set. Their report was recently released and can be found here.

The second step is to define the essential benefit set; this will be done by HHS staff and their recommendations will be available in May, 2012. HHS has had a reasonably good track record of resisting pressure from provider groups to expand the Medicare benefit set significantly, so this initial set should meet the cost goals of the ACA.

A third component of the process allows state exchanges to modify the essential benefit set if the results are actuarially equivalent in cost. Here is where the challenge begins and the states’ history regarding benefits is not encouraging.

Most states currently have “mandated benefits” for fully insured products within the state. Over the years various provider groups have lobbied for the inclusion of their services into the mandated benefits which have made this type of insurance very expensive. Most reasonably sized companies have become “self-insured” to escape these mandates. For example:


Source: Perspectives on Essential Benefits — Workshop Report — Institute of Medicine

Because of this history, look for intense state legislative battles in the coming years among providers as they lobby to ensure their services are included as essential benefits. The actuarially equivalent definition will undoubtedly be stretched and vigorously debated. Some of the benefits that have been controversial in the past include:

  • Cosmetic surgery
  • Chiropractic care
  • Dental care
  • Care that is supportive but not clinical
  • In vitro fertilization
  • Experimental services, particularly drugs
  • And many more . . . .

Each state will face this challenge as they create their Health Insurance Exchange and they will struggle to keep the cost of health insurance affordable — which is, of course, the name of the law.

See how Minnesota is facing this challenge and others related to the implementation of health care reform at the UST Executive Conference on the Future of Health Care on Friday, October 28 in Minneapolis, MN.

This post was originally published October 19th on MedCity News.


HPHC Blog Welcomes Dave Durenberger

DaveMNCapitol04sm.jpg “It’s more important to get it right than to get it done.”
The High Performance Health Care Blog is pleased to announce that former Senator Dave Durenberger will be a regular guest contributor. He will share his observations and insights into the latest health policy reform efforts.
Dave Durenberger launched a 30-plus year career in health policy by helping create the original BHCAG in Minneapolis, went on to three terms as a health policy expert on the U.S. Senate Finance and HELP committees and is now a Health Policy Fellow and chair of the National Institute of Health Policy at the University of St. Thomas. He has also served on various national health commissions and boards, including the Medicare Payment Advisory Commission (MedPAC). He currently serves on the Board of the National Commission on Quality Assurance (NCQA) and the Kaiser Commission on Medicaid and the Uninsured. No one knows health care policy reform better than Dave, as his nationally circulated Commentary suggests.