December 2015

Seizing the information advantageHow healthcare organizations can unlock value and insight from the information they hold.A PwC report in conjunction with Iron Mountain.

2 Seizing the information advantage – A focus on healthcare

Executive summaryA focus on healthcare

Data is the lifeblood of the healthcare economy. It is the driving force behind the industry’s transformation and is essential to achieving the triple aim of improved patient experience, improved population health, and reduced costs.

There is a clear need to unlock the value tied up in information, and many healthcare organizations are confident they have the capability to do so. However, our analysis shows that this confidence is largely misplaced. Close scrutiny of the 150 interviews that we conducted with senior leaders in the US healthcare industry shows that very few healthcare organizations are able to mine information to its full potential, and fewer still can realize the resulting benefits.

Our research also found that, in common with most other sectors, the majority of healthcare organizations are deficient in the required skills, technical capabilities and culture to truly gain the greatest advantage from their information. This is reflected in our first Information Value Index for healthcare which scores 55.8 out of an ideal 100.

Despite the deficiencies, pockets of good practice do exist. We have identified a small group of healthcare organizations that are the leaders in the field: the ‘information elite’. These organizations, which make up just 7% of our sample, have quickly worked out what it takes to deliver value from the information they hold. The rest of the healthcare industry can learn from the elite by taking heed of the good practice exhibited by these front runners with regard to their information governance; their culture of evidence-

based decision making; the way that they balance managing information for both risk and value and their understanding of the need to employ and embed analysts, using fit for purpose tools, across the organization.

This paper outlines the findings of our study and highlights a number of key practical steps that healthcare organizations should adopt if they want to truly seize the information advantage.

Seizing the information advantage – A focus on healthcare 3

The information conversation has shifted

The evolution from fee-for-service to pay- for-performance and the rise in digital health have been two of the most important disruptors to healthcare organizations of all sizes. Many organizations have been agile and innovative in their response and the disruption, therefore, has been positive. Many others, however, have not responded so positively and risk being left behind.

During this period of disruption, the amount of health related data being generated has grown exponentially. Whether it be information from electronic patient records, health data from wireless, wearable devices or new

imaging technologies, providers and payers are being swamped with data. This growth has created risks and opportunities that require significant change in organizational culture, governance, strategy and ways of working.

In the age of big data, the information conversation has shifted. Where once the key concern was information risk, discussions now embrace the idea that healthcare organizations must make the most of their information to improve patient outcomes, use resources more effectively and gain competitive advantage.

The quest for the information advantage is influencing strategic goals. There is now a growing awareness in the healthcare industry that failure to embrace the changes required to manage information for its value is no longer an option.

Case studyUniversity of Pittsburgh Medical Center, Insurance Services Division

UPMC is an integrated payer/provider system with over 2.7 million covered lives in its insurance products, 21 hospitals, and over 3,500 employed physicians. The payer/provider organization creates a perfect laboratory to learn with data. UPMC Health Plan undertook an exploration of readmission using big data modeling techniques and developed a conditional readmission model that produces a readmission risk prediction score that does not require any information from the index admission and is produced each month on every member. That score is available to the hospitals at the point of admission. Additional modeling uncovered optimal post-discharge clinical follow times. In conjunction with the provider system, UPMC blended a publically available readmission model that creates a readmission risk at the point of discharge with the conditional readmission model using machine learning techniques.

The blended model guides patient discharge activities. Additionally, routine physician reporting metrics now monitor the percent of discharges seen within the optimal post-discharge follow-up window. The impact has been a reduction in readmission rates (and thus costs) and an increase in optimal clinical follow-up post-discharge.

Source: Big Data Healthcare Analytics Forum

4 Seizing the information advantage – A focus on healthcare

However, this is not easy. It requires new strategies and changes to traditional ways of working, investment in people, tools and technology and a vision with executive-level endorsement to drive acceptance and implementation.

Seizing the information advantage must be approached from a continued understanding of, and robust approach to, managing information risk. In our view, most organizations have two potentially conflicting priorities: the first is security to protect against data breaches and loss; the second is value extraction.

It is hard to get the balance right between protection from the damaging impacts of data losses or breaches and in being bold and sufficiently confident to embrace the opportunities and advantages that can be gained from utilizing health information in different ways. Striking this balance will become an increasingly pressing priority for organizations of all sizes.

With a core focus on understanding the extent to which the organizations are currently seizing the information advantage, PwC – in conjunction with Iron Mountain – surveyed 1,800 enterprise and mid-market organizations across Europe and North America. This paper focuses on the sample of 150 US based Healthcare organizations that took part in the study and reveals the healthcare industry still has a long way to go to fully seize the information advantage.

The information advantageWhat is it?

So what is the information advantage and what are the core capabilities required to capitalize upon it? In essence, this is about effectively managing information – in new or novel ways – that can change how healthcare organizations interact with their key stakeholders, support new business models, predict customer/patient behaviors, find opportunities to improve operating efficiencies and enhance patient experience.

This is about re-purposing data to create information, whether it is born electronic, in original paper form or digitized, and applying innovative processes and tools to analyze the data and share it with those who have the interpretive skills to convert insights to meaningful clinical and business decisions.

The information advantage allows healthcare organizations improve clinical outcomes, enhance patient experience, and lower cost through an ability to:

• predict patient behavior and utilization patterns• segment populations based on individual needs and preferences • make effective decisions around treatment options • optimize utilization of assets and clinical programs • design ideal networks of providers for the population served.

Seizing the information advantage – a focus on healthcare 5

Information Value Index

PwC and Iron Mountain have created an Information Value Index, the first of its kind, which measures how well organizations currently manage their information for advantage. The Index is calculated based on the responses to 36 statements on the:

• level of awareness and priority that organizations currently assign to deriving value from the information that they hold

• extent to which organizational processes, governance structure and culture are sufficiently aligned to meeting this objective

• skills, tools and methods deployed to extract value

• benefits achieved as a result.

Our first combined information value index, at 50.1 (out of an ideal score of 100.0) illustrates that most organizations have a long way to go to seize the information advantage and its associated core benefits. Given the widespread industry and media attention on big data, the internet of things, and effectively cultivating business value from data and information in recent years, this is a low index score.

US based organizations, with a collective score of 56.7 fare better than their Canadian and European counterparts but there remains considerable room for improvement. Within the US the Healthcare sector, with an index of 55.8 falls slightly behind the overall US score.

US Healthcare Information Value Index

US Mid-market Healthcare (250-2,500 employees)

55.8

54.0

59.3US Enterprise Healthcare (over 2,500 employees)

18.7 18.1 19.6

17.3 16.5 18.8

19.8 19.320.9

US Healthcare US Mid-market Healthcare US Enterprise Healthcare

Organizational capability Technical capability Benefits realized

55.8 54.059.3

It is superseded by the financial services, insurance and manufacturing sectors. Larger Healthcare organizations (with over 2500 employees) perform better than the mid-market with index scores of 59.3 and 54.0 respectively.

6 Seizing the information advantage – A focus on healthcare

The results indicate that few healthcare organizations, as yet, understand how to leverage their information for its greatest advantage. Fewer still realize the extent of the clinical or business benefits that will accrue as a result of getting this right. Although it is relatively early days, and there is still time to catch up, it is our view that organizations that do not seek to maximize the potential of their information risk their ability to fully support accountable care.

In order to gain a deeper insight into the extent to which healthcare organizations are seizing the information advantage, we have segmented the sector into five distinct groupings and identified the typical profile and characteristics of each, underpinned by evidence from our survey.

The analysis demonstrates that pockets of good practice are evident within both the enterprise and mid-market sectors. Overall 7% of healthcare organizations fall into what we have called the ‘information elite’ category, scoring over 90 in the index. These are the leaders in the field, the organizations that truly understand what is required to leverage their data to its greatest advantage. They have quickly worked out what it takes to exploit and deliver value from the information they hold. They have developed the right culture, created the governance and invested in the analytical skills and tools required to deliver value and support strategic initiatives.

Interestingly, there are just as many mid-market healthcare organizations in the elite as there are enterprise, indicating that getting this right is not just the domain of the larger healthcare organizations. This is further confirmed by the presence of a substantial ‘agile mid-market’ group, making up 21% of our healthcare sample. Our research suggests that the agility often demonstrated by recently established, mid-sized, well-informed and forward-thinking organizations can be the key to success in obtaining the information advantage.

Close to one in ten (8%) healthcare organizations in our sample can be described as ‘enlightened enterprise.’ These large organizations benefit from having strong leadership and a good enterprise information governance structure in place involving all of the key functions – marketing, finance, research and development, risk, records and information management, human resources and data analysts – not just IT.

However, similar to all the other sectors in our study, the ‘misguided majority’ dominates healthcare, accounting for 64% of the sector. Our analysis reveals that this group exhibits two sets of characteristics – Informed but Constrained and Uninformed and Ill-equipped.

A focus on Healthcare

The Informed but Constrained group constitutes approximately 38% of the sample and represents those which are starting to make headway in optimizing information value, but are constrained by a number of factors that include legacy behaviors and culture with efforts and resources often focused on addressing regulation rather than extracting value. Often, the leadership is informed and aware of the potential value that their information holds, but leveraging this value has not yet become a high enough priority. Other strategic initiatives are taking precedence. Mid-range enterprise organizations tend to dominate this group.

Over a quarter (26%) of the healthcare organizations in our study are Uninformed and Ill-Equipped to exploit their information value. These are organizations that ‘don’t yet know what they don’t know’. They are often constrained by regulation and resources. However, the main issue holding them back is knowledge of what to do, how to do it, and a lack of understanding of the potential benefits. The typical Uninformed and Ill-equipped organization is small in size, having less than 1,000 employees, and either young (less than 5 years old) or well established (over 30 years).

Seizing the information advantage – A focus on healthcare 7

Segment Main characteristics

Information Elite • An information governance oversight body is well established, and involves all of the key functions

• A strong culture of evidence-based decision making exists• Analysts in all of the key functions can access sensitive and valuable data, which is

protected by robust controls• A fit-for-purpose toolkit of data analysis, interpretation and visualization tools exists

Enlightened Enterprise

• An information governance oversight body is in place, and is dominated by IT, but R&D, marketing, HR, production and finance also play a role

• A culture of evidence-based decision making exists in some parts of the organization• Analysts in all of the key functions, and not just IT, can access sensitive and valuable data• A strong reliance on Excel, but some are using other more sophisticated tools

Agile Mid-Market • An information governance oversight body is in place, and is dominated by IT but R&D and marketing sometimes play a key role

• Leadership appreciate the commercial benefits of extracting value from information • Typically IT, R&D and marketing analysts can access sensitive, valuable data• A strong reliance on Excel, but some are using other more sophisticated tools

Informed but Constrained

• Constrained by regulation and legacy approaches• Information governance oversight body is in place, and is dominated by IT• A strong analytical capability exists in the organization but it is not focused on value• Excel dominates the toolkit. A few have more sophisticated tools• Often feel overwhelmed by the amount of data held

Uninformed and Ill-equipped

• Constrained by knowledge, resources, regulation• Information governance oversight body rarely exists• Little focus on extracting value from information or appreciation of the benefits • Analytical skills capacity is weak. Excel is the dominant analysis tool

26%

38%

8%

21%

7%

Characteristics of the misguided majority

• Unaware of how to leverage their data for value.• Limited ability to effectively manage and analyze large data sources.• Resources deployed to leverage information tend to be IT led.• Using basic analytical tools e.g. reliance on spreadsheets.• Information governance not a priority for leadership.

8 Seizing the information advantage – A focus on healthcare

Most Healthcare organizations in the US can learn from the good practices and behaviors exhibited by the Information Elite. Five key attributes set the Healthcare Information Elite apart, including:

• Therightculture.Treat information as a valuable asset and develop a culture of evidence-based decision making.

• Goodgovernancepractices. Set up an information governance oversight body, supported by senior leadership and aligned with wider governance and organizational strategy. All of the key functional areas should be involved, not just IT.

• Therightbalancebetweenriskandreward.Sensitive and valuable information must be protected by robust controls, but those who need it should be able to access the information securely. Key people in all the main functional teams should have secure access, not just IT.

• Dataanalystsequippedtotakeontoday’sinformationmanagementchallenges. Crucially, the analysts

should possess a blend of technical skill, commercial awareness and knowledge of the organizational strategy. They know what to look for in the data, how to look for it and can link their findings to the organizations KPIs.

• Fit-for-purposedataanalysistools. Too many organizations rely on the ubiquitous spreadsheet. Fit for purpose data analysis, interpretation and visualization tools are required.

What should healthcare organizations do differently?

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We have identified a series of strategic stepping stones that will help the misguided majority of Healthcare organizations to advance along the information value maturity curve.

Rightsizegovernancetofityourorganization– link the strategic goals of the organization to a strategy for governing and leveraging data.

Alignandlinkyourinformationcomplianceandinformationvalueinitiatives – both are crucial but must work in tandem with each other.

Understandwhointheorganizationknowsthedata

• Align and link health informaticists and data managers with operational business owners to expand who in the organization knows the data.

• Begin with short and long term strategic goals of the organization when designing clinical and data analytics programs. This will ensure that true value is created through information management that is fit for purpose.

A call to action

10 Seizing the information advantage – A focus on healthcare

Kieran JonesManager PwC Economics and Policy

T: +44 (0)2890 245454 M: +44 (0)7845 635383 E: kieran.p.jones@uk.pwc.com

Julie McCleanSenior Manager PwC r2i (Research to Insight)

T: +44 (0)2890 245454 M: +44 (0)7738 313241 E: julie.mcclean@uk.pwc.com

Research methodology

Report authors

Kulleni GebreyesPartner PwC Advisory

T: +001 (703) 918 6676 M: +001 410 336 2663 E: kulleni.gebreyes@us.pwc.com

Peter RuckAssociate PwC r2i (Research to Insight)

T: +44 (0)2890 415078 M: +44 (0)7702 698926 E: peter.c.ruck@uk.pwc.com

In order to support this paper, PwC and Iron Mountain developed a robust research methodology to validate the conclusions presented. In the main study, we interviewed 1,800 senior business executives across North America and Europe. This paper is based on the responses of 150 healthcare organizations exclusively based in the US. Our sample was equally split between enterprise (over 2,500 employees) and the mid-market (250-2,500 employees). Both payers and providers participated in the interviews.

Respondents to the online and telephone survey were exclusively C-level Executives, VP’s, Directors and Senior Managers.

Building upon the approach undertaken in the previous years, we devised an information value index. This index was populated through applying a weighted average of each individual company response to 36 statements which were used to define good practice in relation to the exploitation of information for value.

The statements were grouped under three defined business areas of ‘organizational capability’, ‘technical capability’ and ‘benefits realized.’

This report has been prepared by PricewaterhouseCoopers (PwC) only for Iron Mountain and solely for the purpose and on the terms agreed with Iron Mountain in our engagement letter dated 23rd January 2015. PwC accept no liability (including for negligence) to anyone else in connection with this report.

This report contains information obtained or derived from a variety of third party sources as indicated within the report. PwC has not sought to establish the reliability of those sources or verified the information so provided.

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1. The reader of this report understands that the work performed by PwC was performed in accordance with instructions provided by our client, Iron Mountain, and was performed exclusively for their benefit and use. The report may therefore not include all matters relevant to the reader.

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