Rising Cost of Healthcare in the United States

The cost of healthcare in the United States is rising significantly as compared to other geographies. However, the quality of healthcare is poor and does not mirror the high healthcare spending in the country. Various factors contribute to the high cost of healthcare – technology, regulations, and behavior & lifestyle. This has led to an overarching trend toward cost optimization across the entire healthcare system. Both payers and providers have misaligned incentives to achieve cost optimization, which result in their business getting impacted. Providers tend to recommend tests and treatments that may not be relevant to the health of the patient in order to be incentivized for each service provided. Payers, on the other hand, penalize providers for high-risk patients.

Most of these costs can be curbed with the effective use of analytics, as there is a huge of amount of unstructured clinical and claims data that providers and payers have access to. Big data analytics can help to unlock the potential of data by analyzing trends to help improve the efficiency of operations and value of care, leading to reduced costs and improved margin. The use of big data analytics in healthcare, however, comes with its own set of challenges, as it is in a nascent stage and varies with the different segments of payers and providers. This viewpoint explores the potential of big data analytics in healthcare, the challenges faced by various players in the industry, and probable solutions to those challenges in the short and long term.

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