A health datapalooza: Washington and private health care's quest to mine health data

We’ve all heard of the summer rock festival Lollapalooza. But how about Health Datapalooza?

For two days this week, nearly 2,000 data geeks, entrepreneurs, federal bureaucrats and medical folks will descend on Washington, D.C., hoping to help solve the nation’s healthcare crisis through algorithms and spreadsheets. 

The health data industry has been called a "healthcare Silicon Valley" -- an explosion of firms looking for gold in mountains of medical information.

"Data holds the keys to unlocking a lot of the questions about what healthcare costs too much, and what healthcare actually works," says Andy Slavitt, executive vice president of Optum, the nation’s largest collector of medical claims data.

Optum employs an army of actuaries, scientists and physicians -- they slice and dice medication, treatment and price data on more than 100 million people.

Why? For situations like this: "Even relatively small hospitals, like Tucson Medical Center, have been able to cut in half the number of unnecessary re-admissions to their hospitals. Really, very simply, by using data," he says.

Data can be used to identify frequent fliers, that is, patients who kept coming back...so medical staff can zero in on their problems.

Health data has become a multi-billion dollar business, with $1 billion alone sunk into startups over the past three years, according to the company StartUp Health.

Smarter computers and electronic medical records get some of the credit, but Northwestern health economist David Dranove says the industry gotten so big, so quickly because customers are banging down the door.

"Because of the recent changes in health insurance…everybody cares about price in a way that just wasn’t true 10 years ago," he says.

It’s a new era for everybody: consumers, insurers, doctors and hospitals (who now get whacked financially for wasteful spending or inefficient care).

However, data cuts both ways, especially for the docs. Bob Kochera former Obama health adviser, believes the more data, the better. Kocher says there’s information from Medicare on physician performance that would help patients, but doctors have fought its release. 

"It’s very, very scary, for doctors," he says. "They are worried that they may not attract patients like they have before. And that when they compete on outcomes they are going to have a harder time competing."

Privacy advocates like Joe Hall, senior staff technologist with the Center for Democracy and Technology, have their own concerns.

Medical data security breaches happen four or five times every week. Add that up and it means millions of patient records could be compromised.

"The problem becomes when the choice to share that information is taken out of the patient’s hands," he says.

Health officials say they take privacy seriously, but that hasn’t stopped the quest to find more ways to collect data and use it.

The Department of Health and Human Services, after all, is putting on the Datapalooza.

One of the big events: a hack-a-thon to see who can come up with a brilliant way to use a bunch of Medicare claims data. HHS Chief Technology Officer Bryan Sivak is overseeing the contest.

"What we are looking for in the teams that are competing is the ability to think creatively in a relatively short period of time frame about ways that data can be used to solve some really big problems," he says.

Not exactly World of Warcraft, just a race to unlock the mysteries of our $2.8 trillion healthcare system and cash in.

About the author

Dan Gorenstein is the senior reporter for Marketplace’s Health Desk. You can follow him on Twitter @dmgorenstein.

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