Big data is transforming the business world. With access to tremendous amounts of information on consumer behavior, companies have so many possibilities for refining products and services and ultimately increasing revenue and profit. Health plans that fail to keep up with the changing landscape will risk lower profit margins and losing market share to competitors.
Although the health-care industry has lagged behind other industries such as retail and banking in the use of big data- mainly due to issues surrounding patient confidentiality- it can soon catch up. The efficient collection and use of data regarding customer behavior (e.g. purchasing decisions, what customers are viewing etc.) can directly benefit carriers by allowing health plans to target a specific market segment. Carriers that take advantage of the tremendous amounts of available customer data will be able to quickly assess risk and recommend more appropriate products. For example, big data can be used to make predictive determinations to more proactively institute programs to better manager the risk and improve the experience of their member populations. McKinsey estimates that effectively using big data could account for $300 billion to $450 billion in reduced health-care spending, or 12 to 17 percent of the $2.6 trillion baseline in US health-care costs.2 Data can be used to target services more directly to the area of need, reduce waste and redirect spending to effective interventions.
Traditionally, insurers have invested millions of dollars in analysts who would need to sift through reams of data taking months to decipher. The key to leveraging big data is the use of effective and efficient data collection methods. The ability to access and examine relevant information in real-time can help insurers quickly recognize opportunities or issues while providing an optimized experience to their customers. Carriers who take advantage of innovative data analytics products will have a holistic view to manage their customers, the insight to understand and address all associated risk and impact to their bottom line.