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Why (the Right) Health Data Is the Key to Profitability

Healthcare profitability data

We’ve been talking a lot lately about the need for hospitals, provider organizations and health insurers to turn health consumer data into actionable insights. We should probably talk more about why it’s so important to do so.

According to Managed Healthcare Executive's 2015 State of the Industry Survey, turning healthcare consumer data into actionable business intelligence is the most pressing health IT challenge most organizations face.

Consumer insights are the key to profitability — for any company, in any industry. Businesses need to know their customers’ preferences, needs and motivators in order to cater effectively to them. But consumer insights are especially important in healthcare, where the consumer’s (and, often, his or her family’s) direct and continuing participation in the service is necessary for a successful outcome.

Patient engagement is a revenue driver.

When a patient (or his or her strongest influencer) is disengaged from the course of treatment, partial compliance, non-compliance and other barriers to healing naturally crop up. Because of this, disengaged patients are costlier to treat.

Disengaged patients will rarely ask for additional explanation when they are unclear about instructions, nor are they likely to ask their doctors follow-up questions. They may not understand the importance of rigidly adhering to discharge instructions or of informing their doctors when unexpected results occur.

Disengaged patients often don’t take the lead in making sure the various providers on their care teams are aware of what one another is doing, nor in making sure those providers communicate with each other.

For all of these reasons, a low engagement rate is thought to be a leading factor contributing to high readmission rates. Now that readmissions are being penalized by private payers and CMS, it’s more important than ever before for providers and hospitals to be able to influence their constituent consumers and keep them engaged.

By contrast, engaged patients stay healthier longer, don’t require avoidable follow-up care and, for the most part, don’t overutilize the healthcare system.

So, today, let’s explore 3 strategies hospitals, providers and health insurers can use to realize a return on investment on their data, effect change in their patient consumer populations and control costs.

1. Foster more buy-in from physicians and nurses.

For providers, the advent of electronic medical records (EMRs) has been both a boon and a bust.

Doctors and nurses love the ability to be able to see a patient’s medical history immediately on the ward, without having to waste critical treatment time waiting on paper charts to be delivered from the Med Rec department.

By the same token, many providers complain that the time they spend inputting data would be better spent examining and evaluating patients.

Some of the resentment — especially among older providers — may be residual from go-live periods, which are notorious for causing productivity slowdowns. Even though studies have shown that throughput generally normalizes within 3 to 6 months of EMR implementation, preconceptions are quick to form and hard to let go.

Another challenge to EMR workflow may lie in a competency disconnect between engineers (who understand the nuances of software and coding) and clinicians (who understand the nuances of care provision); EMRs are in some cases not optimized for variances in clinical flow across units, and busy physicians have little patience for limitations in technology.

An emergency room provider, for example, doesn’t have time to cycle through every screen on an EMR exam template, when he or she must move quickly to treat and move patients through the ward. To that end, the EMR itself can become an impediment to patient flow.

But, of clinicians’ reluctance to diligently capture all the information, for every patient, that health data analysts and administrators would have them capture, not all is attributable to throughput concerns. Some is due to the plain and simple fact that many providers don’t understand why organizations need all that data.

Hospitals and provider groups need to do a better job of communicating to clinicians the importance of data capture and explaining its potential uses. If doctors and nurses understand that there are clear, long-term clinical benefits, they’ll be more likely to take up the cause.

2. Make data relevant to patients.

Writing in 2015 about the Robert Wood Johnson Foundation’s efforts to cultivate a “Culture of Health” in the American public, Alonzo Plough asserted that the healthcare industry’s metrics need to do more than take snapshots of care delivery systems. They need to be clearly positioned as calls to action.

“We must focus on measuring what matters. Data that only serve to illustrate that a problem exists — or even that progress is being made — are not enough,” he wrote. “We need data that illustrates for people and organizations — across a wide range of sectors — the roles they can play, the actions they can take, and the relevance to their communities.”

Health, Plough said, needs to become a shared value. A community value. Given the rising costs of rendering care and their drain on the national budget, one could make the case that maintaining one’s own health is an act of civic responsibility.

Patients need to be able to understand how to interpret data, internalize it and act upon it.  There are groups of healthcare consumers who thrive on data (i.e., the psychographic segment known as Self Achievers) and require progress measures for their motivation.  Other groups of patients may not be as naturally inclined toward data, but can react to it if positioned in a way that resonates with them.

3. Find ways to give context to your patient data.

People are complex. Their preferences and motivations are various and unique. Without an understanding of these factors, or of patients’ strongest influencers, health systems, health insurers and other providers run the risk of communicating unintelligibly with their core consumers.

Hospitals and insurers may have volumes of health data on their patient populations, but they often lack context for data. So how can they expect to effectively apply that data in ways that would motivate consumers within various psychographic strata?

It’s akin to understanding a language’s vocabulary, but not its grammar structure. Communications that don’t follow recognized grammar rules are at the least off-putting and, sometimes, unintelligible. Imagine a German who doesn’t understand English syntax speaking it, using the sentence structure inherent to his own language: To store go want to will I. Imagine the befuddled looks he would receive from the average American on the street.

“For decades, many of us have worked to improve health by focusing primarily on the health care system,” Plough wrote. “But we know that our health is influenced by complex social factors: where we live, how we work, the safety of our surroundings, and the resilience of our families and communities.”

In the analogy above, those complex social factors are the grammar rules. Hospitals need to understand the social influencers that surround individual patients in order to communicate intelligibly and effectively with them.

Psychographic analysis, which has been used to great effect both in retail and in other service industries, represents a potential game-changer for the healthcare industry, in that it can help hospitals and health plans to begin to wrangle data into insights that are based not only on quantified but qualified data.  Psychographics pertain to consumers’ values, priorities, personalities and lifestyles, and are a key for unlocking behavior change.

Psychographic analysis and segmentation allow healthcare organizations to maximize success by giving them the tool they need to shape data-driven communications that are well customized for like-minded consumers, based on motivations and preferences.

Use the 3 strategies above to increase your organization’s profitability.

Health data is only useful when it is collected consistently and used effectively. And to use it effectively, data must be qualified according to social factors that have heretofore been opaque to the healthcare industry.

To that end, psychographic segmentation would help your organization bridge the context gap. In doing so, it would help you to shape communications, service lines and strategies that should maximize patient engagement, reduce costly, avoidable overutilization and build your organization’s reputation for providing quality care.

Psychographic Segmentation and its Practical Application in Patient Engagement and Behavior Change


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