Evolving role of the CIO in data-driven healthcare

The landscape of healthcare analytics continues to change, the opportunities for analytic professionals continue to grow in this arena, and the potential for start-ups persists. Before addressing the leadership transformation within healthcare organizations that these changes and opportunities demand, let’s first examine what is happening within various healthcare stakeholders.

The healthcare industry recently received a jolt from a major data breach. Anthem, the second largest insurer in the country, was the victim of a cyber attack that compromised the company’s IT systems and the personal information of 80 million U.S. consumers over a several-week period.

Healthcare industry players know that their consumer data is rich with details, which makes it valuable. Up until 2012, most of the major healthcare industry breaches that occurred were due to the theft of magnetic media (e.g., unencrypted hard drives) or mobile devices (e.g., unprotected laptops). Only 6 percent of all HIPAA violations were attributed to hacking.

The data breach due to hacking of the magnitude at Anthem caught many organizations by surprise and sent them scrambling for solutions. In November 2014, International Data Corporation (IDC) warned that 50 percent of healthcare organizations would experience one or more cyber attacks in 2015, and a third of those would be successful. A closer analysis suggests that this threat should not come as a surprise, given the staggering 40 percent growth rate (GAGR) of data in healthcare organizations.

Providers continue to adopt electronic health record (EHR) systems that digitize clinical data. The U.S. Department of Health and Human Services reported in 2014 that about 59 percent of hospitals had adopted EHR systems as of 2013. Payer organizations have invested billions of dollars to acquire systems, from health information exchanges to powerful analytics software, that combines clinical data from provider organizations with claim data to help payers understand high-cost and high-risk populations.

With all this data on individual consumers available inside healthcare organizations, hackers have clear incentives to target it. According to one report, healthcare data is more expensive on the black market than regular consumer credit card data. The growing appetite for data within healthcare organizations brings greater responsibility for protecting the data from sophisticated hacking attacks. No CEO wants to be caught in the spotlight the way Anthem CEO and President Joseph R. Swedish is right now.

Searching the Data for Insights, Revenue

In the post-EHR world, healthcare organizations are increasingly investing in technologies for capturing multi-channel data, from patient engagement via social media apps to remote patient monitoring. They then layer data-driven analytics on top of that, a global trend. A recent report forecasted that the global healthcare analytics market will grow more than 25 percent (CAGR) from 2014 to 2019. In addition, IDC predicts that by 2018, big data issues will become part of the operational IT inside healthcare organizations. In the pay-for-performance world, maximizing revenue, along with population health management initiatives, depend squarely on the business insights gained from this data. Predictive and possibly prescriptive analytics will take center stage and converge with healthcare delivery in the future.

While data from American Hospital Associations shows that the financial performance of hospitals across the nation rebounded in 2014, many challenges still loom from the continued impact of healthcare reform. Inpatient care is moving toward outpatient services, and uncompensated care is growing. Better care management is slowly but surely lowering utilization. At the same time, insurance exchanges and low-cost plans are reducing overall dollars paid to hospitals. As hospitals look to reduce their operational inefficiencies in order to improve their bottom line, they will be compelled to move toward a data-driven digital strategy. Hospitals have already invested heavily in health IT, especially EHR systems and data warehouses. The next step is to use actionable analytics to address inefficiencies at every level.

CIOs as Leaders of Technology, Data-Enabled Business Models

Data and technology will continue to drive every aspect of the healthcare business going forward, creating a transformational event for all healthcare organizations, big or small, and definitely for their leadership. No leadership role is undergoing more change than the role of the chief information officer (CIO) in the healthcare industry.

Gone are the days when managing the computing infrastructure and packaged software were the only key CIO responsibilities within healthcare organizations. CIOs are now expected to be business drivers, almost like technology company CEOs. They may be part of healthcare organizations, but they lead new technology product development, facilitate internal customer adoption (which follows the product life cycle curve), drive innovation, protect data in their private cloud, and may also sell their innovations as services outside of their own organizations.

In bigger organizations, sometimes the role gets split between the chief data officer and the CIO. Nevertheless, the profiles for the roles are all about driving business successes. I am thrilled to see this transformation happening within larger organizations such as Sutter Health and Kaiser Permanente or relatively smaller managed services organizations like SynerMed and non-profit health insurance corporations like Cambia Health. It means those aspiring healthcare technology and/or data analytics professionals can be assured of a long runway that goes all the way to the boardroom. Of course, the change comes with its fair share of demands, scrutiny and other woes, but I celebrate the fact that CIOs are no less important in the healthcare organizations than the CEO, CFO or COO.