Demand Rising for Business Intelligence Software in Healthcare, New SOA Study Suggests
In many ways, the healthcare and medical industries have moved to the forefront of technological innovation. Indeed, the sectors have been among the most ardent proponents of 3D printing, virtual reality, and other cutting-edge technology.
However, the healthcare field in particular also represents a major target for another emerging tech field—business intelligence. A recent study by the Society of Actuaries (SOA) found that the healthcare sector is increasingly tuned into predictive analytics and business intelligence, and accordingly, demand is on the rise across the board.
The report reflects other trends in the sector and highlights the healthcare industry’s drive for innovation. Along with adopting emerging technology in treatment, the industry has also turned to smarter analytics and management systems to improve patient outcomes. The result is increasing revenue potential and expanding market demand.
Healthcare Is Turning to Business Intelligence
The healthcare industry is more reliant on data than many others, due to the nature of its activities. Dealing with patient records, hospital operations data and medical information means that most healthcare providers sit on large troves of actionable data sets. More importantly, as healthcare has expanded, so has the need for faster and smarter treatments along with improved efficiency to reduce unnecessary costs.
As a result, the industry is turning its attention to predictive analytics and business intelligence software to deliver progress. The SOA report found that of the companies surveyed, 60% already use predictive analytics tools (a 13% increase year-over-year from 2018), and 60% also noted that they expect to allocate over 15% of their spending to the activity in 2019.
The study echoes the sector’s growth, which has been on a steady upward trajectory for several years. After reporting $4.24 billion in earnings in 2018, the healthcare business intelligence market is set to expand its footprint to roughly $10.12 billion by 2025, with CAGR of roughly 13.23%. Yet there are those organizations which are still unable to join the trend. The SOA study found that 16% of healthcare providers cited having too much data as a barrier to entry, while 15% of payers cited a lack of skilled workers as a hurdle to overcome.
Why Better Analytics Is Vital
One of the unintended side effects of healthcare innovation and better treatment options is that life expectancy has increased dramatically over the past century. Life expectancy is expected to reach 74.1 years by 2021, expanding the population of people 65 or older to over 650 million while putting immense strain on existing healthcare systems.
Moreover, studies continue to demonstrate that improved satisfaction leads to higher profits. A Deloitte survey found that hospitals that experience a 10% increase in excellent ratings boosts hospital margins by 1.5%, and patient satisfaction can account for a difference of $444 million in net revenues between moderate and excellent ratings.
The SOA report found that companies which employ BI and predictive analytics tools are seeking to improve patient satisfaction while reducing costs (45% and 54% listed them as the most important outcomes, respectively). On a positive note, the study underscored that companies largely achieve these outcomes, with 42% reporting improved customer satisfaction, 39% reducing costs, and 33% noting increased profitability after implementing predictive analytics tools.
Most importantly, many executives in the field see predictive analytics and business intelligence continuing to advance over the coming years. Data visualization is the area most expected to change over the coming years, with 23% of respondents expecting improvements. Additionally, many executives anticipate increase efficiency and effectiveness from machine learning (16%) while a small group (10%) believes that mobile health wearables will become a valuable source of data collection.
Challenges Remain, But Opportunities Abound
Business intelligence is swiftly becoming a vital component of healthcare success, but some challenges remain. Although a majority of the sector has already embraced predictive analytics and BI or is planning to adopt (89% of respondents), some have absolutely no plans to embrace the technology. Among the biggest hurdles are a lack of skilled employees (13%), regulatory issues around the technology (12%), and too much data or not enough (12% and 11%, respectively).
Even so, the future is bright for healthcare business intelligence. A 2019 survey by the Healthcare Information and Management Systems Society revealed that both healthcare vendors and service providers listed better BI and management systems as a priority.
Additionally, the sector continues to expand, as evidenced by events such as the SOA predictive analytics symposium and the optimistic growth projections from all corners.
As more customers join the US’ already-strained healthcare system for longer, healthcare providers must uncover ways to improve treatment outcomes while remaining lean and competitive. Implementing business intelligence and predictive analytics systems leads to better results on both ends. As a 2017 study revealed, better information quality and system quality leads to higher user satisfaction in healthcare.
For the healthcare industry, BI is quickly shifting from a novelty to sheer necessity.