Many industries are being challenged and disrupted by new market forces from the democratization of information to greater price transparency as well as the explosion of the sharing economy and social media. The healthcare industry is especially being thrown into a storm of change while it moves towards member-centric models based on quality and not quantity. Health insurance is also going through a significant evolution while insurers aim to reduce costs and improve coordination with providers. Meanwhile, new well-funded digital health insurance companies such as Oscar are revolutionizing traditional market models and challenging long-established insurers with digital engagement models and low overhead costs.
Data analytics is crucial for health insurers trying to survive these market disruptions, since they can draw significant insights from their massive stores of data. Unfortunately, much of this data is trapped in isolated silos often housed in legacy applications and managed by outdated technologies. However, once this data is liberated, insurers can use it to predict what might happen next in the patient journey as well as begin to offer alternative care models to minimize expensive medical care.
Healthcare analytics is estimated to reach $21 billion in 2020 versus $4 billion today. In addition, Rock Health reports that venture capital investments to healthcare technology firms increased 176% in 2014, with most of those funds going to healthcare analytics companies. In the CIO Survey, 90% of healthcare respondents said they believe analytics have a positive impact on productivity and efficiency. There is a pressing need for investments in data analytics to leverage insight from existing data stores. Consuming existing and new data will enable more compelling interactions with members as well as address new models of member loyalty and expectation.
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