Obamacare Failed – Could Big Data Have Saved It?

There is no disputing the fact that the Affordable Care Act, Obamacare, failed. The system has gone broke, insurers are pulling out of participation and Obamacare premiums have risen more than 100% in many instances with certain providers. Recent news showed that Medicare overpaid to the tune of more than $125 million last year and audits failed to recover that money. Could it be that insurance companies and medical providers didn’t make use of big data that might have saved the system? Here are a few service funds facts that might help to solve the puzzle.

What Are Service Funds Anyway?

The first thing you are probably asking yourself is what in the world a service fund is! Actually, and without going into details, a service fund is nothing more than the way in which a payment provider pays a healthcare provider. One of the most common types of service funds is the Fee-for-Services option which simply sets a price agreed by insurance actuaries for each and every service a physician or medical provider might offer. Another common service fund is called Capitation and that simply estimates how many services a medical provider is ‘probably’ going to offer in a given time period and a bulk amount is paid to the doctor or hospital. If the medical provider didn’t serve that many patients, the insurance company lost money but if the doctor served more patients, the medical provider lost compensation.

Overpayment Seems to Be at the Heart of Obamacare Failure

Could insurance companies have utilized big data to measure trends and costs so as to better manage payments? This could be at the heart of why insurers are going bankrupt and why Medicare overpaid so many millions of dollars. There is software on the market that can offer customized reports which will focus on trends and expenses so as to measure outcome vs. cost. Also, this type of software can track actual services so that if they are falling short of an agreed payment in the Capitation funds model, payments could be re-evaluated so as to mitigate loss due to gross overpayment.

We Have the Technology – Why Wasn’t It Employed?

The problem seems to be that the technology is out there but it wasn’t employed timely in an efficient manner. Audits tracking metrics weren’t employed timely and as a result, a huge number of overpayments now need to be recovered. Big data is a well-established science and it is working for most major industries across the board, why did it fail health insurance, and more particularly, Obamacare?

Whether you are a physicians group or an insurer, it pays to utilize the technology which has been perfected to analyze costs associated with services. The high cost of medical care has been making the headlines for many years now and Obamacare, unfortunately, didn’t turn out to be affordable! Why? Probably because data wasn’t analyzed in time to cut costs where practical, recover overpayments timely or assess trends so as to direct money where it needed to be rather than on a lingering prototype of social healthcare that wasn’t working. The solution? Big data!