Healthcare costs have surged in recent years. The costs have been accelerating significantly over the past decade. On average, employer-sponsored health insurance premiums rose by 4% in 2015 and 7% in 2016.
Policymakers and healthcare experts have been looking for ways to address the problem. They have proposed a number of options, which include relying more heavily on big data. Carol McDonald, a writer for MAPR states that big data could be the solution to major healthcare problems.
“U.S. health care spending has outpaced GDP growth for the past several decades and exceeds spending in any other developed country. Despite being more expensive, according to the Organisation for Economic Co-operation and Development (OECD), the US Health System ranks last among eleven countries on measures of access, equity, quality, efficiency, and healthy lives. Standards and incentives for the digitizing and sharing of healthcare data along with improvements and decreasing costs in storage and parallel processing on commodity hardware, are causing a big data revolution in health care with the goal of better care at lower cost.”
There will be no shortage of data available, because there will be over 2,300 exabytes of healthcare data by 2020. Here are some reasons that big data can contain rising healthcare costs.
Focus on Evidence Based Care to Prevent Chronic Conditions
When former President Obama signed the Patient Protection and Affordable Care Act during his second year in office, he stated that it would reduce costs over the long-term. One of his arguments was that preventive care would lower healthcare costs by reducing future treatments. Politifact rated his statement false.
Preventive screenings can reduce healthcare costs for a single individual. However, the cost of preventive screenings for everyone would be higher than the cost of treatment, because most of the screened patients would never contract the disease.
However, there is still some truth to what Obama said. Studies have shown that while preventive care as a whole doesn’t reduce healthcare costs, it can curb costs if the right preventive screenings are conducted for the right people.
This is where big data comes in. Big data allows healthcare providers to identify patients that are at the highest risk of developing a costly condition down the road. Preliminary care can reduce the cost of developing diabetes and other chronic health problems.
Reliance on More Effective Technology
There is no shortage of medical devices on the market. According to the patent office, there were 5,804 filings for medical device patents in 2015.
However, some medical devices are much more reliable than others. Big data makes it a lot easier to track the most effective technologies, which will help healthcare providers reduce the risk of readmissions.
Tracking Provider Effectiveness
Some healthcare providers offer better quality service than others. Patients could reduce the risk of readmissions by choosing healthcare providers with better track records. Big data has made this much easier. Insurers, the Centers for Medicare & Medicaid Services and patients should all pay attention to readmission rates and other metrics that track physician performance.
However, there is still a caveat that needs to be considered. Many healthcare providers improve their own performance metrics by referring patients with the most difficult conditions to their colleagues, which can skew the results. Predictive analytics models need to factor for these referrals.
Reducing Waste and Fraud
Waste and fraud are major causes of rising healthcare costs that need to be addressed. According to a 2014 report, healthcare fraud costs over $280 billion a year. Waste is an even greater expense.
Big data helps identify suspicious activities and inefficiencies that need to be addressed. Healthcare providers and payers should incorporate them into their models to reduce costs for their patients and taxpayers.
Big Data is Key to Controlling the Healthcare Epidemic
Rising healthcare costs are a tremendous burden on society. Not only are they a tremendous drain for consumers, but they also reflect the ineffectiveness of our healthcare delivery system, which is plagued by high readmission rates.
Fortunately, big data can help bring costs in line. Patients, insurers and taxpayers will all benefit from using it.
This post is part of our contributor series. It is written and published independently of TNW.
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