Big Data Could Save Healthcare System $300+ Billion Annually

[author: Michael Esquivel]

According to a recent report released by Rock Health, Big Data has the potential to save the healthcare system more than $300 billion per year by improving poorly coordinated care, reducing fraud and abuse, and improving administrative and clinical efficiency. Big Data refers to the insights that organizations—in this case providers, payers, and drug and device development companies—can gain from analysis of growing sources of structured and unstructured data from electronic medical records, sensors, and smart phones. Collecting and analyzing the vast amount of data currently available provides the opportunity to identify trends or patterns to improve quality and lower the cost of care. Big Data applications (apps), for example, could identify leading causes of hospital-acquired infections or readmissions, which could lead to better preventative measures while lowering the cost of care.

Harnessing the power of the tremendous amount of data available also has the potential to improve drug research and development by managing and analyzing the growing pool of public and private genomic information. By leveraging Big Data, companies hope to improve drug development by better identifying drug candidates for targeted therapies and reducing the risk of clinical trial failure. Scientists are already using genomic data to improve their understanding of several different types of cancer.  

Big Data also faces some important adoption challenges and legal concerns. Consumer concerns about privacy and security of personal information remain key issues. Companies using healthcare data to develop apps often need to balance access to relevant information with consumer privacy concerns. Leaders in cancer research have already expressed concerns about how barriers to disclosure of medical information could limit future advances. Federal laws also regulate collection and use of a consumer’s medical data. The Federal Trade Commission (FTC) requires businesses to obtain a consumer’s affirmative consent before collecting and sharing medical information. Furthermore, the Privacy Rule under the Health Insurance Portability and Accountability Act (HIPAA) contains extensive regulations on the use and disclosure of individually identifiable health information. 

The HIPAA Privacy Rule defines individually identifiable health information broadly. The definition includes information that relates to an individual’s past, present or future physical or mental health condition and for which there exists a reasonable basis to believe that the information can be used to identify the individual. A key challenge for data driven apps in healthcare will be distinguishing between identified health information that is tightly regulated and de-identified information, which the Privacy Rule does not restrict. The Privacy Rule, moreover, defines de-identified health information as information that neither identifies nor provides a reasonable basis to identify an individual. Information can be de-identified for the purposes of the Privacy Rule by a safe harbor approach, which requires removing 18 different identifying markers from the information. On top of the expansive definitions, the rule contains several restrictions, as well as exceptions, on how covered entities—defined as health plans, providers and healthcare clearinghouses—use health information.

Congress has also recently enhanced security protections for personal health information. The Health Information Technology for Economic and Clinical Health (HITECH) Act, passed as part of American Recovery and Reinvestment Act of 2009 (ARRA), provides breach notification regulations. Under the HITECH Act, HIPAA-covered entities must promptly notify affected individuals of a breach, as well as the Department of Health and Human Services (HHS) Secretary in certain instances. The HITECH Act contains strict penalties for data breaches, even for breaches caused by third parties.

The insights potentially discoverable through Big Data represent a significant opportunity to transform the delivery of healthcare services and the development of new treatments for serious diseases like cancer. Successfully implementing these solutions will require diligent management of consumer privacy and security concerns. Perhaps most importantly, any app that uses medical data will need to consider privacy and security law compliance issues.