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It’s the Data, Stupid

By Kim Bellard, February 21, 2012

Two announcements by payors last week caught my eye – both relating to payors and to health care data. 

Last week UnitedHealth announced that its Optum division would offer cloud services for health data, allowing health care providers and even other payors to move and access data via the cloud.  They are even extending the Apple analogy further by opening up their platform to outside developers, so that those developers can develop “apps” for the Optum platform.  They cite the example of an app that would make it easier for providers to structure payments in “bundles of care,” as are expected for ACOs. 

At the same time, three Blues plans – Horizon (NJ), Highmark (PA), and Independence (PA) – announced they had partnered with HIT company Lumeris to buy NaviNet.  NaviNet is a platform many health plans have used to facilitate real-time electronic connectivity with physicians and other health providers; NaviNet claims over 70% of US physicians use its platform.  The partnership with Lumeris is intended to improve NaviNet’s ability to communicate clinical information – in addition to eligibility, claim, and benefit information – and to facilitate ACO offerings.  Undoubtedly other Blue plans, not to mention other NaviNet customers such as Aetna, will be watching the acquisition closely.

The focus on data is by no means new to payors.  In the mid 1990’s UnitedHealth started building its data and analytics capabilities, eventually becoming Ingenix and now part of OptumInsight.  Aetna and Wellpoint also made acquisitions to beef up their data capabilities – Aetna acquiring ActiveHealth in 2005 and Wellpoint following suit in 2008 by acquiring Resolution Health.   Not to be outdone, Humana acquired Anvita Health, another health analytics company, this past December.

Equally interesting is that the payors aren’t just interested in analyzing the data; they want to help move it as well.   In 2010 UnitedHealth acquired Axolotl, one of the leading vendors that service the health information exchange (HIE) market, a market is that growing rapidly due to the influx of HITECH federal funds for HIEs and Regional Extension Centers (RECs).  Not to be outdone, a few months later Aetna acquired Medicity, another leader vendor for HIEs.  Although Axolotl and Medicity are the two largest HIE vendors, they are still estimated to account for less than 20% of the HIE market.  That would seem to leave the window open for other payors to acquire some of the remaining HIE vendors, but at least one leading firm – Chilmark Research – thinks participation in regional HIEs efforts may make more sense, given typical payor market shares and potential antipathy from providers and other payors.  

So what are the payors up to with these moves?  Some experts think they are diversifying to help offset PPACA’s limits on medical loss ratios (MLRs).  There probably is some truth to this, but we need to keep in mind that there is not as much actual insurance as most people think.  Well over half of health insurance today is self-insured, meaning the MLR rules do not apply to it and that the payors are doing the administration without the risk.  The main insured markets are individual coverage, small group (under 50 or 100 employees), and Medicare Advantage.   Historically not every payor has been in all of these markets – e.g., for decades Cigna focused primarily in large, self-funded employers – but with PPACA, the emergence of health insurance exchanges (the other HIEs), and the expected growth of Medicare Advantage, actual insurance is likely to become more important, and understanding their risk better becomes even more important to payors.  Plus, those self-funded clients are constantly demanding better and more targeted interventions to help control their costs, so the data analytics capabilities are increasingly important as part of a payor’s capabilities.  

Another hypothesis is that payors are scrambling to assert their role in an ACO world – whatever that may look like.  If providers end up as the ACOs, and they are essentially bearing the risk, the theory is that payors may find themselves antiquated.  That doesn’t seem likely to me, especially since so much of what payors do isn’t related to risk-bearing.  The exchanges and CMS are likely to still expect a (regulated) insurer to be responsible for the members, and multi-state or even multi-city employers would still need some entity to stitch the ACOs together (we saw this with HMOs in the 1980’s and 1990’s).   But by providing insight or connectivity to an ACO, payors may be able to provide value to them and to be an integral part of their solution.

Then there are the efforts by payors to buy their way into the provider world – e.g., Humana with Concentra, OptumHealth with Monarch  Healthcare, Highmark (again) with WPAHS – that will further blur the lines between payor and provider, as if the lines hadn’t already been blurred by organizations like Kaiser Permanente, Geisinger, or Intermountain Health.  Payors will have access to troves of new information through such direct involvement in the provision of patient care, but managing clinical efforts is not the same as managing network and insurance efforts (as some provider organizations have discovered in reverse!).

Data has always been one of the Achilles heels of health care.  All too often, patients’ data has been trapped in the silo in which it was delivered, with little or no ability to be shared, much less learned from or to have treatment guided by data from similar patients.  Administrative data – e.g., claims and eligibility – was able to break out of the silos to some degree, primarily because it was directly related to payment, but even with those types of data neither payors nor providers can claim to be entirely satisfied with the current state of affairs.  Health care data remains complex, minutely precise yet in many ways surprisingly useless, and generally just extremely messy -- mocking the ease and usability with which most other financial data manage to flow. 

Still, it doesn’t take much of a crystal ball to forecast that this sad state of affairs cannot last.  Data will flow.  It will be aggregated, analyzed, and applied, and it will be available -- used to guide both provider and patient treatment decisions at point of care/point of decisions.  It will acquire velocity, nearing the real-time status we’re used to seeing in most other industries.  More power will accrue to entities that can help data move and be useful, and more success will come to entities that use the data to be accountable for their efforts – whether providers, payor, or combinations thereof.  

I think it unlikely that payors will end up controlling health care data – not with the likes of Microsoft, IBM, GE Health, athenahealth, and many, many others also in the mix – but if they don’t have their oar in the data waters (and rowing hard), they’re going to get left behind. 

For centuries, medicine was the art of laying on the hands.  Some say 20th century medicine was the era of antibiotics/prescription drugs, plus advanced imaging.  Many pundits predict that medicine in the 2st century will be all about genetic therapy.  Perhaps so, but I think it will be about the data.  Let’s hope we use it well.

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