Big Data and Healthcare – Case Study for Massive Disruption

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Big Data and Healthcare – a Case Study for Massive Disruption provides an overview of the opportunity for disruption and massive innovation in the United State’s healthcare sector.  It reflects a compilation of research by McKinsey & Company, the New York Times, the Wall Street Journal, the New Yorker, MIT Technology Review, Bloomberg & Becker Hospital CIO.


As President Reagan, sagely advised ‘Trust, but verify’.  This is why many great thinkers can overlook the pain of government-led healthcare reform, and instead, have optimism that massive fact-based disruption, led by Big Data and predictive analytics, will transform a complete sector of the United States economy.

Picture of Bloomberg logo

If you are wondering about whether the United States has room for improvement in healthcare, a 2013 Bloomberg study found that “among advanced economies, the U.S. spends the most on healthcare on a relative cost basis with the worst outcome”, with a ranking of 46 out of 48 countries for efficiency.

While some make the argument that having the government play a leading role in healthcare is a lot like playing against the house when the odds are in your favor (after all, who wouldn’t want to have the ‘government’ as the ‘house’ when playing Blackjack?), there is a great deal of confidence that Big Data will transform the healthcare industry – vastly reducing expenses and increasing the quality of patient care.

Gartner coined the 3 ‘Vs’ to define big data:  high volume data, high velocity data and high variety of data assets, that in totality require new processing capabilities to “enable enhanced decision making, insight discovery and process optimization.”

Why have confidence, you might ask?  Healthcare is a couple of decades late in applying predictive analytics to understand customers better.  Banks, insurance companies, retailers, casinos and others have massively enhanced their productivity via the thought-leadership of companies like Teradata, who provided their data warehousing technology and helped them monetize their Big Data via predictive analytics.

A Contrarian View – What If Big Data Could Actually Improve the Healthcare System?

What if government’s increased participation in healthcare could accelerate innovation, reduce costs, and improve the quality of healthcare?  The integration of vast and disparate data streams onto one unified platform, enables disruption by ‘solving for X’ – reducing a large problem, to countless variables that computing power can solve.

Picture of McKinsey slie on how Big Data is Changing the Paradigm by establishing new value pathways

Source: McKinsey & Company

Arguably, with the emergence of a vast array of real-time sensors, the advent of electronic health medical records (EMRs), ICD-10 (delayed until October 2015) and aggregation of data on patient care and outcomes, there is a a future, where data will help us make fact-based decisions to reduce expenses and create better patient outcomes.

The opportunity at hand will unleash American ingenuity & entrepreneurship.

Predictive Modeling in Healthcare

Logo for MIT Technology Review

As Mitchell Higashi, GE Healthcare’s chief economist shared with the MIT Technology Review, Big Data holds promise in modeling outcomes that will enable a quantum leap in projecting “future population health trends”, aid in prevention, and solve diseases via pattern recognition.

He notes that “what is new about Big Data is the volume (of data) that is being generated by people”.  Not just the ill, but healthy folks as well.  Mr. Higashi explains that “what used to be a snapshot in time at your doctor’s visit, is now potentially captured continuously”.

Picture of the New Yorker LogoMore over, data scientists can assist in in shifting the ‘waste’ narrative away from Physicians by helping us understand the the large amounts of waste stemming from high administrative costs, pharmaceuticals, medical devices and other expensive technologies, notes the New Yorker in an article entitled ‘What Big Data Can’t Tell Us About Health Care’.  Every role in the healthcare system will have the sobering or liberating reality of being exposed or justified by Big Data.

Healthcare Reform – High Expectations & High Stakes

The expectations and stakes for healthcare reform are very high.  Healthcare is mission critical to our economy, representing a substantial 17.6% of GDP.  Naturally, our populous is skeptical of handing over their trust to the government who has a checkered reputation for successful project management.   As a nation, we absolutely have to get this right.

Logo-for-the-Wall-Street-JournalOne may be encouraged by the companies who are actively pursuing the promise of predictive modeling, enabled by Big Data.  “Several insurers, including United Health Group and WellPoint are seeking to pinpoint who will develop conditions such as diabetes”, notes the Wall Street Journal, in the article ‘Numbers, Numbers and More Numbers – Healthcare players are finding that crunching numbers can pay off in better care and lower costs’.

The article spotlights WellPoint, who is using Big Data “to help suggest treatment options to doctors, based on medical records, research databases and other sources” and Health Management Associates, an operator of 70 hospitals in the U.S., who is working on “predicting readmissions” to establish greater preventative care programs and model demand for its emergency rooms and lab services to optimize staffing levels.

In a nutshell, Big Data enables fact-based decision to identify legitimate savings and viable healthcare solutions.

Disruption & Innovation Abound

Picture of New York Times LogoIn the future, data will “be shared seamlessly between customers, providers and payers” and blinded data sets will be used “to understand health patterns over an entire population to revolutionize medicine”, notes the New York Times in an ‘Big Data in Your Blood’.  Innovators like MC10 (stretchable electronics to monitor body & brain activity), Proteus (digital health feedback systems), Sano Intelligence (micro needle sensors), 23andMe (genetic testing), Curious (data sharing for serious conditions) and Flatiron Health (aggregator of cancer-patient data) are pioneering a wave of innovation to make your body’s continuously generated healthcare data – actionable.

Big Data pioneers, such as Google have been active in the healthcare space, making substantial investments in companies such as Flatiron Health, DNAnexus (analytics applied to genomic information), Foundation Medicine (Big Data tools to analyze tumors) and Predilytics (tools for health insurers to track hospital discharges and readmissions).

On May 7, 2014, the Wall Street Journal reported that Google Ventures led a “$130M Round for Big Data Medical Software Company Flatiron Health”.  Notably, this investment is Google Venture’s 4th largest to date, and largest in a medical software company.  Flatiron Health is aiming to solve a Big Data problem, noting that “only 4% of cancer patients participate in clinical trials”, “meaning that information about treatments and patient outcomes for 96% of patients is not easily accessible”.  Journalist Timothy Hay notes that Flatiron’s software “taps a wide variety of sources to aggregate clinical and genomic data, information on patient outcomes, doctors’ notes, billing information and other data, and presents the information to oncologists”.

Economic Arguments for Disrupting Healthcare are Persuasive

An April 2013, McKinsey and Company, article notes that “after more than 20 years of steady increases, health-care expenses now represent 17.6 percent of GDP—nearly $600 billion more than the expected benchmark for a nation of the United States’s size and wealth.”  The article highlights a shift by medical payers from ‘fee for service’ compensation which incentivized “treatment volume” for Physicians to “risk-sharing arrangements that prioritize outcomes”.

Some believe Physicians have been unfairly vilified, and I agree, as they have received an unfair amount of the focus for cost reform (since they are the easiest to target and solve for X), however, healthcare reform has ambitions to address substantial spending with administrative costs, pharmaceuticals and medical devices, and shift to pay for performance based outcomes.

Big Data Accelerates Shift Towards Evidence Based Medicine

Logo for McKinsey & Company

McKinsey & Company’s informative paper on ‘The big-data revolution in US health care: Accelerating value and innovation’ highlights that “aggregating individual data sets into big-data algorithms often provides the most robust evidence, since nuances in subpopulations (such as the presence of patients with gluten allergies) may be so rare that they are not readily apparent in small samples.”

Picture of McKinsey Global Institute Slide on Primary Data Pools at the heart of the big-data revolution in healthcare

Source: McKinsey Global Insights

In a recent article on reducing the prison population, the Economist noted how Big Data is enabling fact based decision making by enhancing human decision making to decide which prisoners to parole.

How Long Until We See Results?

Stay tuned.  As a Physician quoted in Hospital CIO notes, “we have lots of aspirations around predictive models of care, and we’re working on correlating clinical data to outcomes data, integrating financial data and data on individual physician performance” says Dr. Shrestha, MD.  “We’re still working to connect all the dots.”

A Fundamental Question – How Much Are We Willing to Spend to Save a Life?

Once Big Data and predictive analytics help us reduce costs and improve the quality of healthcare, a fundamental question remains that Big Data cannot answer.  It is “the hardest question that doctors and patients grapple with every day”.  “How much are we willing to spend to save a life?”, asks Ms. Rosenbaum of the New Yorker.

This is the question that many citizens fear.  They fear that the ‘government’, the faceless institution comprised of a few people with interests on both sides of the aisle, will make that decision and provide that answer.

“Trust, but verify” as President Reagan advised.  We should be hopeful that fact-based decision-making and innovation will prevail.


  • McKinsey & Company – ‘The Big Data Revolution in US Health Care: Accelerating Value and Innovation’, Basel Kayyaili, David Knott and Steve Van Kuiken, April – 2013
  • MIT Technology Review – ‘Transforming Health Care with Big Data and the Industrial Internet’, MIT TR Editors, February 7, 2014.
  • Wall Street Journal – ‘Numbers, Numbers and More Numbers’, Shara Tibken, February 14, 2013.
  • New York Times – ‘Big Data in Your Blood’, Quentin Hardy, September 7, 2012
  • Becker’s Hospital CIO – ‘Keeping Up With the Fortune 500: Big Data, Predictive Analytics and Healthcare’s Next Big Challenge’, Helen Gregg, January 10, 2014
  • New Yorker, ‘What Big Data Can’t Tell Us About Health Care’, Lisa Rosenbaum, April 23, 2014
  • Wall Street Journal, ‘Google Ventures Leads $130M Round for Big Data Medical Software Company Flatiron Health’, Timothy Hay, May 7, 2014
  • Bloomberg, ‘Most Efficient Healthcare Countries’, 2013.

By Nick Mavrick

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