Although the healthcare analytics market continues to soar—exceeding $14 billion spent in 2019 and anticipated to grow at a CAGR of 23.5 percent to $40 billion by 2024—the utilization of advanced analytics for key decision-making and strategic planning is self-reported as “negligible” by eight in 10 surveyed healthcare managers.
This was a key finding in a recent report from market research firm Black Book, which polled 3,190 implemented users—spanning 748 provider organizations—of descriptive, predictive, cognitive and prescriptive analytics. These include financial, operational, informational and clinical users from health systems, hospitals, medical groups, ambulatory settings and ancillaries.
With the recent explosion of various analytics applications and models implemented, 95 percent of hospitals and physician group leaders have access to supportive decision-making tools, sharply up from 63 percent in 2016. But 84 percent of respondent C-Suite officers and board members only use analytics "to a limited or minimal extent to generate commercial or outcome insights,” according to the survey.
“Besides occasional dashboard viewing, post-implementation analytics and business intelligence software and services go greatly underutilized, particularly observed in the survey responses from financially under-performing hospitals in 2019,” said Doug Brown, president of Black Book.
Sixty-five percent of hospital system managers surveyed that have analytics applications available to them state they dismissed using advanced analytics in the past 12 months due to a lack of strategic direction, absence of internal data scientists, financial resources and/or a lack of reinforced training.
And among health systems CFOs with implemented analytics and decision support programs, only 15 percent report any meaningful utilization in financial forecasting and strategic planning, with 6 percent noting that the health system overbought BI tools in retrospect without budgeting related consultant advisories, training, and/or analyst staff to accomplish more.
At the same time, 93 percent of hospital and physician financial executives believe exploring new ways to use data analytics is critical to meeting the demands of value-based reimbursement and healthcare consumerism.
Overall, Black Book surmises that 67 percent of all payer data and 90 percent of all data within a provider enterprise goes unused for advanced analytics, despite the fact that more vendors in the industry are promoting products and services offering immediate ROI of big data and using technologies to capture even more data from external sources.
What’s more, profitable provider organizations appear to understand the power of analytics better than hospitals with negative margins. Black Book identified 66 hospitals that employ chief innovation executives in Q4 2019 where analytics programming and executive education have been prioritized. Eighty-nine percent of the 66 health systems with innovation officers confirm that big data is actively being used in informed decision-making, up from just 13 percent in 2015.
To this end, 97 percent of health systems with chief innovation officers also operated with positive operating margins in 2019. Only two in 66 of the health systems with chief innovation officers underperformed in the last fiscal year, but both of those systems improved financially from the previous year.
“What does that say about all the rest of the nation’s C-suites that have no innovation leader and are not making strategic decisions that rely on advanced analytics?” asks Brown.
In the end, most healthcare managers confirm its difficult to fully embrace complex analytics when they are not sure how they can benefit the organization or community. “The learning curve of CIOs to clearly communicate the value of business analytics and assure comprehensive, managerial training is still falling short in most hospital systems,” said Brown.
Only 2 percent of all C-suite respondents reported they are budgeting and recruiting data scientists with healthcare expertise in 2020. “Because analytics need to be customized for each hospital or medical group business problem, analytics are often seen as complicated and time-consuming,” said Brown.
