Dan Adelman Says Health Care Has a Data Opportunity

You’ve been running Booth’s Healthcare Analytics Laboratory for six years. What have you learned?

I started off not knowing a lot about health care. I told physicians, “Bring me problems that have a lot of data behind them.” Health care is a huge consumer of analytics. Hospitals run on data. But I would say health care is probably 15 years behind other industries in terms of how it collects and uses data.

Why is health care so far behind in analyzing data?

Unlike in industries where companies produce standardized products, in health care, every patient is unique. Also, a patient’s health is evolving, and doctors are dealing with things at the limits of science. The challenge is standardizing practices so health-care providers can measure performance and manage in an efficient way. Everything—including how money and care processes work—is complicated by this uniqueness of individual patients.

In most hospitals, analytics means generating standard reports for administrators. But there is tremendous interest in using existing data to harness predictive and prescriptive analytics to improve how health care is delivered. The challenge is to build models that integrate clinical, operational, and financial data to maximize both value and patient outcomes.

How do we overcome these challenges?

Physicians are data driven and evidence oriented. They’re trained scientifically, so they are in a perfect position to deploy data-driven analytics. The area of quality measurement is emerging, and over time the raw-data sources will improve. The industry will adopt better standards for recording data and develop new ways of deploying analytics in patient-care processes. We’re still at an early stage of the data-driven health-care revolution, but a massive industry transformation is well underway.

How does Obamacare figure into this?

All of the discussion in Washington and on the news is about the affordable-care part of the Patient Protection and Affordable Care Act, but I’m an operations professor, and I care about the patient-protection part. For me, the biggest issue is not who’s paying but how are we delivering care—are we doing it in a way that maximizes value? There’s not much disagreement that hospitals should have incentives to provide greater value and better outcomes. But it’s challenging to pull off. A lot of what I’ve been thinking about is working on this part of the puzzle.

Dan Adelman is Charles I. Clough Jr. Professor of Operations Management and John E. Jeuck Faculty Fellow at Chicago Booth.