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2017 US health plan analytics survey
Becoming an insight-driven organization
Our 2017 US health plan analytics survey outlines the priorities and challenges of implementing analytics within a health insurance organization.
- Insight–driven health plans
- The future for health plans: Beginning the analytics transformation
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Analytics drive business insights at health plans
Many health plans are facing uncertainties: the changing health insurance landscape, the speed at which value–based care is approaching, and growing demands from customers, to name a few. But one investment may help executives meet each of these challenges—an investment in analytics. Health plans are data rich, yet those data are not always leveraged to understand what happened and why, or predict what is likely to happen. Health plans that don't take advantage of their data may risk being disrupted and left behind.
The Deloitte Center for Health Solutions conducted an online survey of 45 analytics professionals at health plans (with 250,000 or more members) to better understand the priorities and challenges of implementing analytics within a health insurance organization. The Center also conducted 15 interviews with executives at health plans and technology companies to better understand leading practices and lessons learned from insight–driven organizations.
Key findings from our survey and interviews include:
- Analytics is commonly a critical asset for long–term strategy: Two out of three survey respondents agreed that analytics is extremely important to their organization as a competitive differentiator. As many early adopters of analytics begin to see tangible results (e.g., increased efficiencies, improved affordability/reduced medical costs, or enhanced customer engagement/experience), later adopters will likely need to catch up or they will be left behind. Projected spending on analytics mirrors this view: 33 percent of respondents expect spending on analytics will increase substantially over the next three years. Despite many being in a resource–limited environment, interviewers stated that their leadership understands the value that analytics brings to the table and that they support investments.
- Analytics drivers are often business drivers: Financial goals, such as reducing medical and operating costs, are among the leading drivers of analytics investments among survey respondents. Clinical and customer analytics are priority investments in the next year, particularly in the areas of cost and utilization management and customer experience.
- Many health plans prefer to buy solutions versus building their own: Rather than build them, more than half of survey respondents intend to buy, rent, or use a hybrid approach to acquire solutions to their top analytics priorities in the coming year and over the next three years. However, respondents preferred to keep day–to–day analytics activities in house. Our interviews suggest that keeping analytics in house is more secure, and health plan analytics requires market and organizational–specific business knowledge that isn't easy to outsource.
- Data quality, technology, and access to skilled labor are often big barriers to analytics investments and implementation efforts: Data quality is the most commonly cited barrier to health insurance analytics investments and implementation, followed by asset–related barriers such as tools and technology, access to skilled resources, and funding. Without enterprise–wide agreement on data definitions and requirements, analytics outputs aren't trusted and can lead to ineffective insights. Thus, health plans could benefit from investing time and resources to ensure the data they use are valid and meaningful.
- Analytics functions are generally centralized within an organization: While most survey respondents stated that analytics functions related to hardware/infrastructure, data storage, and data preparation are primarily owned by information technology (IT), there was a closer split of IT and business ownership for the building of reports. Despite differences of primary ownership, the majority of respondents stated that their analytics functions were generally centralized into a shared service for the enterprise to capitalize on economies of scale and competency. Regardless of which function is owned by IT or business, a coordinated, business–driven approach to analytics is generally key to ensuring that analytics initiatives are aligned with business goals.
The future for health plans: Beginning the analytics transformation
How do you become an insight–driven organization? While there is no one–size–fits–all answer, health insurers should consider these initial priorities:
- Commit leadership: Gain senior leadership alignment on the importance of analytics in driving differentiated business performance in the future. Establish an analytics champion from the senior leadership ranks to sponsor enterprise analytics efforts and work with the leadership team to commit the necessary resources for the journey. Create an enterprise–wide analytics leader, if one is not already in pace, to chart the course and drive day–to–day enterprise analytics forward.
- Set analytics priorities: Establish the top strategic business priorities for analytics and identify high–value analytics use cases to tackle in the near–term in order to build momentum and excitement around analytics across the company. This should include addressing some foundational reporting/business intelligence needs while also applying advanced analytics techniques to provide new predictive/prescriptive insights to well–trodden business issues.
- Align the strategies: Align the current data architecture strategy with the future business needs strategy. Introduce new architectural concepts and technologies/tools to support the needs of the business objectives.
- Address data quality: Establish an enterprise data quality and governance framework to manage the data assets across your organization, helping to create a high level of confidence around the data and the insights derived from it.
- Organize thoughtfully: Define an operating and organizational model that will best enable analytics within your organization, balancing business intimacy/agility and economies of scale/competency amongst scarce resources. Align governance, processes, and teams to promote reuse and collaboration in building analytics and promoting knowledge sharing.
Analytics is more than just technology and tools. An effective insight–driven organization can focus on all of the above areas to begin the data and analytics transformation to drive better insights into executive decision making across the company.
To learn more about the value that analytics can bring to health plans, download the full report.
"If our value-based transformation and cybersecurity are the top two priorities for our CEO and the board, analytics is number three.”
—Chief Analytics Officer