Can Government Big Data Help Regulate Healthcare?

The U.S. Government recently released a document showing “hospital-specific charges for the more than 3,000 U.S. hospitals that receive Medicare Inpatient Prospective Payment System (IPPS) payments for the top 100 most frequently billed discharges.” This document, Medicare Provider Charge Data, included data from 3,000 U.S. hospitals and represents 60% of Medicare IPPS discharges.

The Washington Post shows the data graphically in the article appropriately entitled One hospital charges $8,000 – another, $38,000. It seems as if this big data release is a first step to help regulate the cost of healthcare. But do we have the big data analytics to make real changes in actual costs to the end user?

Big data is one of the most influential forces in government and private industry today. Companies use it to determine what they will sell, whom they will target and how they can improve their bottom line. The Federal Government is taking big data seriously, as highlighted in Big Data across the Federal Government. The Department of Defense (DOD) alone will invest $250 million annually in big data initiatives across military departments.

However, big data is not without limits. While big data can certainly help to identify potential problems, it may not reveal the entire picture.

Because the collection of big data is a fully automated process, it often leaves out crucial information that could have helped to better understand consumer motives and business decisions. In the case of hospitals, for example, data collection may show that a procedure costs 50% more than average at a specific hospital. However, what it doesn’t tell you is the clinical outcomes and experience level of physicians at each hospital. Presumably, hospitals must pay more in salary to more experienced physicians and specialists who might produce better patient outcomes. And we haven’t even touched on negotiated reimbursement rates with insurers and other legalities.

As more people enter the field of data analysis and automated tools continue to improve, it is likely that some of big data’s limitations will be reduced or eliminated. Nonetheless, human involvement and domain-specific knowledge will always be necessary at some stage of the process, and big data will never tell marketers and analysts everything they need to know about their target consumer base.

If we are able to draw some useful conclusions from this big data initiative, it could benefit the American public by creating self-regulation in the healthcare industry. As long as we are going to try and use big data effectively, we might as well start with healthcare, which according to Forbes, is about $3 trillion and accounts for approximately 18% of the U.S. GDP per year.





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