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Payers seek access to healthcare data
Payers are working to keep up with EHR-equipped hospitals and physicians by seeking access to data.

Data battle

UnitedHealth deal is latest move in industry shift


By Joseph Conn
Posted: February 2, 2013 - 12:01 am ET
Tags:

Without fanfare or so much as a news release, a unit of UnitedHealth Group acquired Humedica, a Boston clinical data analytics firm with tight ties to the American Medical Group Association.

But the deal represents more than the insurance giant simply buying yet another health information technology company, something it has done with regularity in recent years. It was a major shot in the ongoing battle by payers for healthcare data supremacy, according to industry experts.

“The fight over the control of data will be a very large struggle,” predicted Dr. David Brailer, chairman and founder of Health Evolution Partners, a San Francisco-based private equity firm specializing in healthcare investments, and the first head of the Office of the National Coordinator for Health Information Technology at HHS.

UnitedHealth Group, Minnetonka, Minn., is not alone among payers seeking access to superior clinical data gathered by electronic health records. Health information exchanges are another source of clinical data for payers. In late 2010, Aetna paid about $500 million for Medicity, a health information exchange software and services provider.

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But UnitedHealth has a long record with its data subsidiary, formerly known as Ingenix, now called Optum, putting it “far ahead” of the others, Brailer said. Other data-related investments by UnitedHealth include its 2010 purchases of Axolotl, an HIE software and services provider, and Picis, a developer of EHRs for hospital emergency and other high-acuity departments.

“The current model of an insurer is just a losing proposition with health reform,” Brailer said, forcing payers to hunt for new business models. Some are trying to morph into provider organizations, he said. Others are trying to specialize in underwriting; others still, in healthcare data analytics. “Now that real money is being put out, there are preparations being made to bring this into their main business model.”

Terms of the Humedica deal were not disclosed.

Humedica President and CEO Michael Weintraub confirmed via e-mail that “Humedica is now part of Optum,” although the companies' websites had yet to make mention of it last week.

In contrast, Optum announced with great fanfare last month that it formed a new subsidiary called Optum Labs, a data-analytics collaboration with the Mayo Clinic, an AMGA member.

Payers have long been keepers of claims data that extends over a patient's life and across multiple providers. But payers are being pushed from their places atop the healthcare data heap by EHR-equipped hospitals and physicians. These IT-enabled providers can use exchanges—or create data consortia such as one the AMGA launched in 2002 called Anceta to extend their reach.

Their EHRs produce richer, more granular and much more clinically useful flows of data than do billing systems pumping out claims information to payers, data experts agree. As time passes, even the longitudinal superiority of payer data will be equaled.

Humedica was a prize catch for UnitedHealth in that it has long served as Anceta's chief technology and data analytics partner and has developed technology enabling physicians to instantly access and compare their EHR data across time and provider groups.

Robert Laszewski, a former insurance executive and president of Health Policy and Strategy Associates, a consulting firm whose clients include health insurance companies, hospitals and physician groups, noted that the company has “a long-standing track record of purchasing what I call ancillary-type services.”

“The data industry is a profitable industry,” and it appears United is trying to build that as a profit center, Laszewski said, and he declined to read anything more into it than that. Insurance companies will be getting millions of new customers under healthcare reform, he said, so they'll do fine with the change. He scoffed at the notion that UnitedHealth would be using EHR data from the deal for medical underwriting or other insurance-related purposes.

“There is no doubt there is a huge confidentiality agreement there” between Humedica and the providers, Laszewski said. “It sounds deep and dark,” he said of an insurance company buying a data analytics firm, but “you can't just go into a block of data and start mining it. It doesn't work that way. “

And that's how the AMGA leaders and member groups see it, too, said Dr. John Cuddeback, the AMGA's chief medical information officer.

Anceta pools clinical data from 25 of AMGA's 430 member groups. The patient- identifiable data is shipped to Humedica, in daily transfers, while some, for real-time clinical surveillance, is sent every few minutes, he said.

In a recent annual report to members, the AMGA provided an example of the superiority of EHR data over claims data. Among key Anceta developments last year mentioned in the report was the delivery by Humedica of a new predictive model that could “identify the patients with congestive heart failure who are most likely to have an ED visit or hospital admission in the next six months.”

The Anceta clinical data “performs about twice as well as models based on claims data,” according to the AMGA report. “It consistently identifies about 4% of patients who are responsible for 24% of admissions and ED visits, and 9% of patients who are responsible for 37% of hospital utilization.”

At Humedica, the data is kept segregated in each member's own database, called a “fact mart,” Cuddeback said. That way, he explained, providers in one organization can pull up in their EHRs their own patient-identified information and compare it to the aggregated and de-identified information of Anceta's entire patient population without those other members' patients' identities being compromised.

Anceta's data use agreement with Humedica adheres to principles “that go way beyond HIPAA,” Cuddeback said. And the principles in the agreement “cover the data stream in perpetuity.” It is in Humedica's—and now UnitedHealth's—best interest to maintain that firewall. “If they want to have credibility, they have to remain separate.”

“We've reached out to our boards, and they have all been very pleased,” with the sale, Cuddeback said. “We see this as very complementary, for what Humedica does with clinical data and what Optum does with claims data. So, I think there is opportunity for synergy.”

Dr. Ashish Jha, an associate professor of health policy and management at Harvard University, like Brailer said insurance companies appear to be looking to evolve under the constraints of healthcare reform. “There will be some growth from insuring more people,” Jha said. “But companies like United are looking to differentiate themselves and be a market leader in a whole lot of other businesses.”

Jha also said insurers are aware that the industry and policymakers will increasingly rely on sophisticated analytics made possible by the rich streams of data yielded by increasingly prevalent EHRs.

“We've been using claims because that's all we had,” Jha said, “but we had the sense we could do so much better. This is the promise of electronic health records, and it's starting to show value.”


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