Healthcare avalanche

It’s no secret that healthcare is all the buzz these days. The US has the highest healthcare costs in the world. We have a new president elected by a large (relatively speaking) margin who put healthcare at the center of his platform. Major publications worldwide are suddenly interested in McAllen, Texas because of its extraordinary healthcare spending per capita. We’re operating in the worst economy most of us have (or will, hopefully) ever seen and the government just pledged billions for healthcare. If consultants are bees, healthcare is the latest honey.

What is particularly interesting to us of the analytical persuasion through all this is the totally awesome scale of data and analytics that are going to be needed if the US is ever going to come to grips with “the biggest threat to its balance sheet.” Obama got a standing-O and experienced his highest approval rating so far after stating “healthcare reform cannot wait, it must not wait, and it will not wait for another year”. It’s go time. So where do us consultants start?
Well, the short answer is nobody knows. It’s overwhelming at best and impossible at worst.

There are delivery and drug costs to reduce. There are Medicare abusers to root out. There are methods for predicting healthcare needs based on family history, lifestyle, and demographics to create. The high level check list goes on…and on. It’s scary.

There is good news in all the mess, however. First, the government is putting its money where its mouth is. As a part of the American Recovery and Reinvestment Act Obama shelled out $150 billion for healthcare. A large part of that is going to healthcare delivery (Medicare, insurance subsidies, etc) but there’s almost $30 billion in there for the sorts of work that analytical consultants make careers on. About 2/3 of that $30 billion is specifically for “health information technology”.

Now that’s a pretty vague and potentially broad bucket but, on the other hand, $20 billion can buy a lot of IT and consulting and that’s not including what the NIH (National Institute of Health) already has tucked away.

My feeling: start beefing up on healthcare and gas up your analytical engines. I’m not alone here. All the big firms have been moving to promote their own healthcare expertise in the last 6-12 months. Using numbers to fix healthcare is officially en vogue. The question I’m interested in answering is where are the big breakthroughs, analytically speaking, going to come in all this?