Leveraging the vast supply of information made possible by the burgeoning field of “big data” could result in annual savings of up to $450 billion in healthcare spending, according to a report from management consulting firm McKinsey & Co.
The report, titled “The ‘big data’ revolution in healthcare: Accelerating value and innovation,” outlines five value pathways for healthcare, and how big data applies to each. They are:
- Right living: Improving lifestyle choices by patients, and having them take an active role in their own treatment, can keep them healthy and create value.
- Right care: Increasing coordination across all settings and providers to ensure patients get timely, appropriate treatment.
- Right provider: Matching providers to healthcare tasks to achieve the best outcome in the most efficient manner.
- Right value: Focusing on cost-effectiveness and eliminating fraud or waste can enhance healthcare value while preserving or improving quality.
- Right innovation: Using clinical trial data and identifying high-potential targets for research of new therapies and practices.
Included in the report were some examples of how big data developments are already making improvements in line with the above value pathways. For example, German payor G-BA initially rejected coverage for Lantus insulin from Paris-based pharmaceutical company Sanofi. However, the company responded using research showing that use of Lantus may delay the need for higher-priced therapy down the line, which prompted G-BA to reverse their decision.
Another example outlined in the report came from Madison, Wis.-based Asthmapolis, which is dedicated to collecting data on asthma catalysts through GPS-tracked inhaler usage.
Using annual spending and outcomes information from a 2011 baseline and applying these and other early success stories to the system as a whole, the report estimates reductions in U.S. healthcare costs of 12 to 17 percent, or $300 to $450 billion.
“Fiscal concerns, perhaps more than any other factor, are driving the demand for big-data applications,” wrote report authors Basel Kayyali and colleagues in a summary of the findings. While healthcare has lagged behind retail and banking in tapping into big data, the movement away from a fee-for-service reimbursement model will help the industry catch up. This trend must continue, they argue, and arrangements that pit payors against providers—over what is and isn’t covered—must be reframed by taking a holistic, patient-centered approach to value if the full potential of big data is to be realized.