This research note is restricted to the personal use of bill.gannon.demo@gartner.

com
G00272243

Market Trends: Applying Analytics in

Healthcare
Published: 31 March 2015

Analyst(s): Anurag Gupta, Dan Sommer

New ICT delivery models and the rise of data discovery tools are creating
new opportunities for all market players. Strategic planners of technology
and service provider organizations need to build consulting capabilities and
domain understanding to better engage potential buyers.

Key Findings

Value-based care, which incentivizes hospitals to optimize costs and identify organizational
efficiencies, is attracting investments in analytics.

Newer ICT delivery models like the emergence of cloud and the rise of data discovery tools are
creating newer opportunities for all market players.

Many healthcare organizations are themselves exploring the market by commercializing their
own analytics solutions or by working with technology partners, thereby creating new
collaboration opportunities for even unconventional market players.

The convergence of health and life sciences firms aided by technology is creating new
opportunities for positioning analytics in personalized medicine.

Recommendations

Build your consulting capabilities or partner with another firm to understand the real motivation
of using analytics. Highlight how your clients will gain "incentive payments" and increased
recognition by implementing analytics.

Demonstrate powerful data visualization tools that are easy to use by nontechnical users. Insist
on involving the clinical users along with the technologists in the workgroup teams.

Engage a healthcare institution to build domain understanding and create joint brand
credentials.

Partner with biopharmaceutical companies. Biopharmaceuticals are expensive and target the
personalized medicine area.

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

Table of Contents
Introduction............................................................................................................................................ 2
Market Trend..........................................................................................................................................5
Value-Based Care, Which Incentivizes Hospitals to Optimize Costs and Identify Organizational
Efficiencies, Derives Investments in Analytics.................................................................................... 5
Reducing Costs..........................................................................................................................6
Improving Efficiency....................................................................................................................6
Improved Decision Making..........................................................................................................7
Impact and Action:..................................................................................................................... 8
New ICT Delivery Models Like Cloud and the Rise of Data Discovery Tools Are Creating New
Opportunities for All Market Players.................................................................................................. 8
Impact and Action:..................................................................................................................... 9
Many Healthcare Organizations Are Exploring the Market by Commercializing Their Own Analytic
Solutions or by Working With Technology Partners, Thereby Creating New Collaboration
Opportunities for Even Unconventional Market Players..................................................................... 9
Impact and Action:................................................................................................................... 11
Convergence of Health and Life Sciences Firms Aided by Technology Is Creating New Opportunities
for Positioning Analytics in Personalized Medicine...........................................................................11
Impact and Action:................................................................................................................... 12
Contrarian View.................................................................................................................................... 12
If Analytics Are Positioned for Techies Only, Use Complicated Geek Speak, Are Expensive, and Are
Not Secure, Then .......................................................................................................................... 12
Vendors to Watch................................................................................................................................ 12
Gartner Recommended Reading.......................................................................................................... 13

List of Figures
Figure 1. Evolution of Analytics............................................................................................................... 5

Introduction
This research discusses the major market trends within the healthcare analytics market and
identifies the major priorities. Technology and service providers' strategic planners should use this
research to prioritize their analytics investments and prepare their field groups to engage analytics
solution buyers.

Page 2 of 16

Gartner, Inc. | G00272243

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

The healthcare industry faces the three challenges of managing costs, increasing access to care
and enhancing quality of care. Changing demographics, the rise of elderly population and the
increase of chronic diseases will further squeeze health budgets. Little wonder that healthcare costs
are rapidly increasing in several countries. U.S. spent 17.9% of its GDP on health in 2010,
1

according to the Centers for Disease Control and Prevention (CDC). If U.S. healthcare spending
continues to grow at previous rates, the White House estimates that 34% of GDP would be devoted
2

to health by 2040. One way to manage the costs of care and improve quality is to put together the
fragmented care delivery model across primary care, hospital care and community care (known as
social care in many countries). Another method in managing costs is placing an emphasis on
prevention and promoting a healthy lifestyle to keep people from becoming sick; this method is
gaining traction, mainly across the insurer-led systems.
The focus of many health systems across the developed world is evolving from a straightforward
hospital-focused (and doctor-focused) curative approach to a more holistic model involving
preventive care, coordinated disease management (as part of chronic care) and keeping the patient
at the center of all activities (involving patients as informed consumers). In Europe, integrated care
or coordinated care aims to bring together the disjointed model and fill the gap between short-term
cure provided by general practitioners (GPs) and the episodic long-term care provided at the
hospitals. In the U.S., the Patient Protection and Affordable Care Act (ACA) is one of the most
ambitious reforms of the U.S. healthcare system. It affects almost every stakeholder in the patient
value chain from insurers to providers to even preventive care organizations. An important
feature of ACA is the creation of accountable care organizations (ACOs), which are defined as a
group of organizations such as hospitals, physicians or specialists that provide care to a defined
population and are "accountable" for delivering quality care within a targeted budget.
From an IT perspective, hospitals and physician offices are realizing that technology is not only for
back-office automation and billing, but also can actually help in core healthcare delivery and help
manage costs (for example, by delivering active prevention and targeted chronic care management
programs). Leveraging technology to bridge the information silos and help in clinical decision
making can also help in the reduction of increasing healthcare costs. Several integrated care
initiatives across Europe base their data exchange and coordination backbones on technology. For
3

example, the Esther project in Sweden, led by the Jnkping County Council, involves more than
300,000 residents and bases its evidence-based care on the use of healthcare IT and the use of
various analytics initiatives such as dashboards and performance measurement. The integrated
4

care initiative in Eksote, Finland, also leverages technology as a backbone. ACOs have also been
investing in electronic health records (EHRs) that will allow patients' details to be shared across care
providers and make it easier for relevant care workers to access medical records, check data on the
move, and visualize and collaborate in real time. (In the U.S., the ACA encouraged adoption in
health information and communication technology [ICT] by providing incentives for adoption.)
The availability of transactional data from various sources such as EHR, various clinical systems,
demographic data has created an opportunity to apply advanced analytics. Gartner defines
advanced analytics as the analysis of all kinds of data, structured data and content (such as text,
images, video and audio) using sophisticated quantitative methods (for example, statistics,
descriptive and predictive data mining, simulation and optimization) to produce insights that

Page 3 of 16

Gartner, Inc. | G00272243

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

traditional approaches to business intelligence (BI) such as query and reporting are unlikely to
discover (see "Advanced Analytics: Predictive, Collaborative and Pervasive"). Advanced analytics
are being used across both the clinical and nonclinical settings. In clinical settings, analytics are
helping doctors through early identification of diseases, spotting trends or simply leveraging
evidence-based medicine (by pulling updated information from medical journals, numerous past
clinical cases and established best practices). Within a nonclinician setting, analytics are helping
hospital managers monitor and control healthcare costs, manage strategic performance across the
organization and reduce readmissions.
We can categorize analytics into two major segments:
Backward looking (analyzes retrospectively into the past to understand the present):

Descriptive (What is happening now, and what happened)

Diagnostic (Why is it happening, and why did it happen)

Forward looking (predicts the future by analyzing the past and the present and may also suggest
the optimum intervention in case of prescriptive analytics):

Predictive (What will happen, and what if it happens)

Prescriptive (What should happen, and what is the best option)

Organizations predominantly use BI technologies and other descriptive analytics that measure the
past, such as reporting, dashboards and query. An increasing number of organizations are
engaging in diagnostic techniques, such as online analytical processing (OLAP) and data discovery.
The visual pattern detection of data discovery tools, in combination with the algorithmic pattern
detection of advanced analytics, can be useful to describe algorithmic insights to a wider audience.
Figure 1 illustrates how the use of advanced analytics will evolve in leading organizations to deliver
increased business value.

Page 4 of 16

Gartner, Inc. | G00272243

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

Figure 1. Evolution of Analytics

Source: Gartner (March 2015)

One major challenge in adopting analytics in clinical medicine was the lack of available prescription
data. There is a plethora of machine data generated by various medical instruments, but very little
prescription data. Doctors have traditionally used mainly paper to capture their records, and very
few used computerized medical records. This tendency is now gradually changing, and some
countries such as Estonia and Denmark and some notable institutions such as Kaiser
Permanente and U.S. Department of Veterans Affairs have active EHR data that is captured by
clinicians themselves. Patient data contains a variety of data and could be structured (information is
available in a neat, fixed-value format such as EHR data and patient administrative and financial
data) or unstructured data (free-format data in the form of free texts, scanned images, video and
audio files derived from various medical imaging modalities in the hospital). Unstructured data still
towers over structured data with respect to volume. Increasingly, genomics (sequencing analysis
and DNA information) and patient-generated data are also gaining visibility.

Market Trend
Value-Based Care, Which Incentivizes Hospitals to Optimize Costs and Identify
Organizational Efficiencies, Derives Investments in Analytics
Value-based care in its most simple terms rewards outcomes rather than episodes of care. Many
payers in the U.S., Germany and the Netherlands are also considering a "bundled payment."
Providers, physicians and hospitals would be paid on the basis of "coordinated care," and the

Page 5 of 16

Gartner, Inc. | G00272243

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

payment is bundled as a single payment instead of separate episodic payments to various entities
such as physicians, care providers and laboratories. This payment system creates a very strong
incentive to coordinate care across various stakeholders and deliver value. The creation of ACOs in
the U.S. and various integrated care initiatives across Europe are the direct results of these
outcome-based policies. ACOs in U.S. are addressing the fragmentation of care (across various
stakeholders, such as doctors, hospitals, labs, social care and mental health) by incentivizing
coordination and keeping costs down. The Centers for Medicare and Medicaid Services (CMS)
estimates that there are more than 360 Medicare Shared Savings Program and Pioneer ACOs in the
U.S. as of May 2014.

The major target areas for these organizations are lowering costs, improving quality and keeping
patient at the center of activity (rather than keeping the whole system clinician-centric or hospitalcentric). Analytics can help in all of these areas.

Reducing Costs
Hospitals are using various levers to keep costs down and improve quality. For example, many
hospitals in the U.S. are merging to create "supersized" entities to create economies of scale to
manage cost structures and also to achieve negotiation clout with insurers. But just combining large
number of hospitals is not enough. Healthcare delivery organizations (HDOs) will need to identify
and reduce the "waste" (part of the Lean and Six Sigma movements) from individual health services
for example, optimizing time required for various admission, discharge and transfer processes.
Analytics are helpful here too. (For more on real-time healthcare systems, see "2014 Strategic Road
Map for the Real-Time Healthcare System.")
One area that definitely increases unwanted costs at hospitals is avoidable readmissions, where
patients are readmitted shortly after being discharged. In the U.S., HDOs are leveraging analytics to
identify patients who are at risk of being readmitted to the hospital within 30 days of discharge.
HDOs are doing this because Medicare's Hospital Readmissions Reduction Program, started in
October 2012, incentivizes hospitals to reduce the number of readmissions within a month of
discharge. This program targets the 20% of patients who are readmitted to the hospitals within 30
days. HDOs that have excessive readmissions can also be penalized. To adhere to the program's
protocols, HDOs are leveraging analytics to create a discharge process that uses specialist
discharge planners, nurses and case managers that assess each patient's unique needs. Advocate
6

Health is using analytics to predict needs of patients at greatest risk of repeat hospitalization. Using
predictive analytics, Advocate Health will identify patients for targeted interventions like care
coordination programs or long-term care management.

Improving Efficiency
Healthcare inefficiencies are another big drain on the healthcare budgets. Inefficiencies include
over-prescription, unwarranted services, medical errors and frauds. Frauds and scams cost the
CMS billions of dollars. The U.S. lost about $58 billion almost 10% of the entire Medicare budget
to fraud in the 2013 fiscal year, according to law enforcement officials interviewed by The Wall
7

Street Journal. The Department of Justice, the Federal Bureau of Investigation, and the Department
of Health and Human Services use analytics to identify fraud in much of the same way that credit
Page 6 of 16

Gartner, Inc. | G00272243

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

8

card companies identify fraudulent transactions. Common areas of fraud that can be sought out
and highlighted by analytics include repeated billings, fake prescriptions, multiple chemotherapy
sessions, bogus lab tests, common errors of medical coding, pre-existing conditions, charge
posting and fictitious claims.

Improved Decision Making

The use of evidence-based medicine is gaining traction across both health providers and payers.
For example, many HDOs carefully monitor the performance of the average length of stay (ALOS)
for different procedures and often use it to benchmark themselves against peer HDOs by
comparing ALOS for similar caseloads. Some common hospital cases can have significant
variations in ALOS. One simple way to improve ALOS is follow evidence-based care (the best care
pathway depending on the patient's condition) and reduce variation in care. Texas Children's
Hospital in Houston, Texas, is using analytics to do this by working with Health Catalyst, and has
9

found that simple appendectomy postoperative ALOS can be reduced by 36%. Payers are also
leveraging analytics to optimize care and ensure patients are being cared for using standard
treatment guidelines and caregivers adhere to evidence-based medicine. Blue Health Intelligence
(BHI), owned by the Blue Cross and Blue Shield Association, uses predictive analytics to improve
10

diabetic care in the state of Arkansas by applying proprietary algorithms to the BHI claims
database (includes details of more than 100 million individuals) to check if patients are following
treatment guidelines, such as taking regular medications or visiting specialists.
Organizations are increasingly embedding analytics within workflows to incorporate evidence-based
medicine to improve quality in care and reduce unwanted variations. Analytics solutions can assist
doctors in clinical decision-making processes by pulling updated information from medical journals,
numerous cases and established best practices and presenting them to the clinicians in real time.
An example is IBM WatsonPaths, which is positioned as an evidence-based (pulls information from
multiple sources such as medical journals and clinical guidelines), decision support (explores
scenarios and suggests options) tool for medical professionals. The system uses machine learning
to improve the performance over time. Anthem, a large U.S. health benefits company, uses
analytics to present doctors with a list of possible diagnoses when presented with a matching list of
patient symptoms. By leveraging information through data analytics, doctors can be helped in
planning the optimum path by presenting the possible diagnosis, the available choices (such as
tests to be performed), the associated risks and the probable outcome.
Realizing the demand for a shifting market and changes in various markets such as those in the
National Health Service (NHS) in the U.K., value-based purchasing in Germany, or those changes
led by ACA in United States we see tremendous growth opportunity for healthcare consulting.
Opportunities range from helping policymakers reconfigure the whole health apparatus (for
example, the NHS has undergone a generational shift with major powers shifted to GPs), helping
hospitals become ACOs, optimizing costs and improving quality, advising in acquisitions, and
helping insurers maneuver the new landscape of paying for care outcomes rather than single
episodes of care. Analytics invariably stands out as a major opportunity for the consulting industry.
Many consulting firms have acquired or strengthen their own health consulting practices, such as
KPMG is working with BHI and Booz Allen acquiring Epidemico.

Page 7 of 16

Gartner, Inc. | G00272243

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

The clinician's interface with analytics is through EHR, and the EHR is assuming greater significance
in linking the heavy lifting done through analytics technology and the user interface presented
through the EHR. Many EHR firms are either ramping up their own analytics capabilities or
partnering with others. Technologies that ease clinicians' interactions with the EHR will in turn
facilitate the use of analytics. Building interface with a natural-language processing technology is
one alternative to facilitate this human-machine interaction.

Impact and Action:

Build your consulting capabilities or partner with another firm to understand the real motivation
of using analytics.

Highlight how your clients will gain "incentive payments" and increased recognition by
implementing analytics (in U.S., the single largest health analytics market). In non-U.S. markets,
demonstrate the impact of analytics-led cost containment on the bottom line.

Embed the use of analytics into the process. Use the EHR as the front-end conduit to present
the clinical information to the users. For financial and administrative data, information is best
presented through the organization's existing health information system.

New ICT Delivery Models Like Cloud and the Rise of Data Discovery Tools Are
Creating New Opportunities for All Market Players
Providers are positioning solutions that leverage cloud and emphasize user friendliness. The rise of
bimodal IT means that apart from the traditional buyers like corporate IT, there are the departmental
buyers (that is, the business users) who place value on abilities such as agility and fast delivery that
emphasizes ease of use (see "Gartner Says in the Digital World CIOs Need Bimodal IT: Rock Solid
IT With Ability for Fluidity"). The rise of business buyers and consumerization of IT is creating new
opportunities for players that have a focus on flexibility and quick deployments. Data discovery
tools are relatively new entrants to the analytics domain and can be understood as agile, selfservice tools with intuitive interfaces (usually with a built-in performance layer and proprietary data
structure to store and model data from different data sources) (see "Market Trends: The Collision of
Data Discovery and Business Intelligence Will Cause Destruction"). Data discovery tools are gaining
popularity, as they are lighter-footprint tools that combine with lighter-footprint selling models to
enable easier entry into different parts of the departmental business, which are often disconnected
from corporate IT. For example, such technologies could be used for diagnosing wait times, basic
reporting (sometimes it may take days for clinical users to get the requested data from ICT teams),
and finding overall mortality rates and readmissions.
The single most important benefit of cloud-based adoption is shifting the upfront costs to a
recurring model. Cloud-based BI is making an entry into healthcare. For example, U.K.-based PA
Consulting Group is working with NHS England to deliver cloud-based BI solutions (in this case, the
QlikView Governance Dashboard along with Google Cloud). NHS England uses the solutions to
analyze the overall mortality rates across different hospitals. The system also helps monitor the
overall hospital performance against set targets (for example, accident and emergency wait times)
11

by presenting the data derived from multiple sources 15 different sources of data from
across the country in a single easy to understand format, allowing the users to drill down from a
Page 8 of 16

Gartner, Inc. | G00272243

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

larger countrywide view to granular hospital-level detail. The system can be used on a mobile
device, providing further flexibility to the users. It is worth noting that the project team emphasized
regular exchanges with the users (in this case, weekly interactions with the users) and had frequent
releases of the software agile methodology works best when users can see the software and
provide their feedback, and the development team can take into account the user feedback, thus
completing the loop and starting the iterative journey for the next release.
Engaging the users and thinking from their perspectives is critical to propel adoption. This includes
identifying the situations where analytics will actually be used by the users. In case of NHS
Lanarkshire trust, the critical "user side detail" was usage in mobile-based and field-based
technologies, as the majority of users are community nurses who work in the field with patients and
are not always in front of a desktop computer. NHS Lanarkshire in Scotland is working with
12

Yellowfin to deliver the BI to its 6,000 field-based clinicians. The project is based on the ease of
use, simplicity and the ease of consumption of the information (such as dashboards) on a mobile
device of choice. This project is a marked improvement for the users who initially were using pen
and paper to record information and were not able to compare performance. User consumption is
key here, as it allows the users to see the various caseloads and get the benefit of separating and
organizing the data. Yellowfin targets the availability of the data for clinical users and the
organizations' compliance to the NHS' balanced scorecard for trust management. Scalability is also
very important, as projects may start small but may have rapid adoption curves. In the case of NHS
Lanarkshire, the project started with usage on more than 300 Android tablets with the ability to
13

scale it to 7,000 users while being OS agnostic.

Impact and Action:

Demonstrate powerful data visualization tools that are easy to use for nontechnical users. Show
how dashboards can simplify the inherent complexity of data and clearly identify trends (for
example, a group of members that is at high risk for readmission).

Position scalability and OS-agnostic platforms to spur mobile usage. Understand that projects
may start small with only a few users but may ramp up to hundreds in matter of months.

Insist on involving the clinical users along with the technologists in the workgroup teams.
Clinical users' involvement will help improve usage and get the buy-in.

Many Healthcare Organizations Are Exploring the Market by Commercializing Their

Own Analytic Solutions or by Working With Technology Partners, Thereby Creating
New Collaboration Opportunities for Even Unconventional Market Players
We also see an emerging trend where many providers and payers have started providing
technology services themselves. In the U.K., many Commissioning Support Units (CSU) (which has
staff that often consists of ex-primary care trusts in other words, the buyers of technology), such
as the North Yorkshire and Humber CSU, are now selling analytics solutions. In the U.S., several
medical institutions have partnered with technology firms to create IT solutions, such as IBM,
Oracle, Informatica and Allscripts working with University of Pittsburgh Medical Center (UPMC); GE
Healthcare working with Intermountain Healthcare; and Microsoft working with Mayo Clinic.

Page 9 of 16

Gartner, Inc. | G00272243

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

UPMC's Technology Development Center is working on several initiatives such as the telemedicine
platform (a virtual care platform with Alcatel-Lucent) and is working with Microsoft, Caradigm and
Intel on mobile platforms for physicians. UPMC also worked with Oracle in a $100 million analytics
14

initiative, in which data from 200 different data sources will be analyzed. The objective was to
bring together the clinical, administrative, financial and genome data into a common system.
Some health providers have gone a step further and acted as incubator of new health information
and communication technology (ICT) companies. For example, Cleveland Clinic Innovations, part of
Cleveland Clinic, has incubated and spun off several companies. One of them, Explorys, targets big
data analytics in healthcare. The initiative started in collaboration of physicians and ICT experts at
Cleveland Clinic. Now Explorys provides a secure cloud computing platform for the healthcare
industry. Another spin-off, CardioMEMS, was acquired by St. Jude Medical (St. Jude Medical has
an extensive range of cardiac remote monitoring devices under its Merlin remote monitoring system
brand). A recent clinical trial found an association between adherence to remote monitoring with the
15

Merlin system and a reduction in patient mortality.

The connected domain and Internet of Things (IoT) is propelling arrival of new unconventional
players into the healthcare world (see "Market Trends: Differentiate Within Vertical Industries by
Leveraging on Internet of Things").
The Pittsburgh health plan, which mines information from past patient record database to identify
patients who are most likely to use the emergency services using risk stratification, is now also
16

expanding its data pool by connecting the member data it already has with household (such as
income and marital status) and other consumer data obtained from Acxiom, a marketing technology
company. This additional level of detail will help UPMC serve its members better and be prepared in
advance by predicting usage and taking relevant remedial action for any exacerbation.
Many analytics companies are also expanding beyond the basic level of hospital data and
combining all data sources available. For example, Predilytics found a direct correlation between
missed appointments with general physicians (primary care doctors) or people lacking
16

transportation and the number of hospital admissions.

Forest Laboratories is working with ConvergeHEALTH (a Deloitte firm) and Intermountain Healthcare
17

to identify what treatments work best in patients. The collaboration will start by initially focusing on
respiratory ailments. The basis of the collaboration will be with the analytics platform
OutcomesMiner, which will help identify the relationships between treatment outcomes and patient
phenotypes.
Wearables are becoming popular and healthcare is gradually moving to provide a more holistic view
and integrated care view that takes into account both the health and social aspects of the patient
rather than just the clinician-centric and hospital-centric views that many EHRs were originally
written to provide. As a result, technology providers will need to start connecting consumer-side
devices and the data that they generate together with the hospital/enterprise side of the data.
Apple's partnership with Epic and Mayo Clinic partly explains the move to address this market
18

toward encouraging healthier lifestyles.

Page 10 of 16

Gartner, Inc. | G00272243

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

Impact and Action:

Engage a healthcare system to build domain understanding and create joint brand credentials.
This will provide dual benefits: provide continuous feedback to improve technology and help
attract other health providers, technology firms and the users themselves. SAP, for instance, is
collaborating with the German National Center for Tumor Diseases to enable quick access and
analysis of the vast cancer data.

Convergence of Health and Life Sciences Firms Aided by Technology Is Creating

New Opportunities for Positioning Analytics in Personalized Medicine
Doctors typically diagnose and prescribe on the basis of only the patient's phenotype (the physical
characteristics), which is often supported by the clinical examination (subjective analysis) and
laboratory/radiology (objective analysis) results. Such a treatment approach oftentimes does not
take into account the patient's other major attribute: the genotype. We can therefore argue that a
proper diagnosis would only be "complete" with the analysis of both the phenotype and genotype.
Personalized medicine promises to change from the "one size fits all" approach to a targeted or
precision strategy. Apart from helping treat an individual, personalized medicine can help
proactively predict if someone is predisposed to a specific type of disease or to help influence
lifestyle changes. Personalized medicine was recently highlighted during U.S. President Barack
Obama's 2015 State of the Union address with the announcement of $215 million in funding toward
19

the Precision Medicine Initiative. The U.K. government is also considering the care.data initiative,
which not only will link the hospital treatment data with general-physician-led ambulatory data, but
also will create a complete patient profile to understand whether (and how) drugs are working in
patients; this will all be facilitated by using analytics. Alongside the 300 million genetic research
initiative announced in August 2014, the U.K. government is partnering with Illumina (which will
invest about 162 million) and Genomics Research (set up by the U.K. government to spur the
100,000 Genomes Project) in the field of genome sequencing.

20

The current healthcare reimbursement system places little or no incentive on outcomes. Valuebased pricing and health technology assessments will play important roles in the way drug makers
will be reimbursed in the future. As with healthcare providers focusing on paying for outcomes
rather than doctor-patient episodes (interactions), pharmaceutical companies also face increased
scrutiny in terms of how much benefit (or value) the patients receive from drug treatments rather
than just being paid for medicines prescribed. Regulators, governments and payers are increasingly
asking for proof of the way drugs act on the body. Value-based pricing, as the name indicates,
awards value rather than volume. It links the price of drugs to their value to the patients. In the U.K.,
agencies such as the National Institute for Health and Care Excellence (NICE) are closely examining
the value-based assessment (reimbursement) model, which pays when drugs act on individual
patients and help improve their overall lives. Germany has changed its regulations toward valuebased pricing. Pharmaceutical companies now get one year to prove that the new drug provides
better value than compared with similar treatments available at the time.
Data-driven research is gaining traction in industry. For example, 23andMe, which is aggressively
targeting the genome analysis market, recently announced its plan to leverage analytics to mine

Page 11 of 16

Gartner, Inc. | G00272243

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

21

genetic data for drug discovery. The company has also recruited a top executive from
biotechnology company Genentech to be its chief science officer.

Impact and Action:

Partner with biopharmaceutical companies. Biopharmaceuticals are expensive and target the
personalized medicine area. Companies like Coriell Life Sciences are already working with
technology providers.

Target the oncology segment; the oncology field is very tough for physicians to be always upto-date with constant updates from a plethora of medical literature for various mutating
cancers. A good example of one such oncology area where genetic testing can be helpful is
acute promyelocytic leukemia, a subtype of acute myeloid leukemia.

Leverage government initiatives, invest in major ongoing initiatives and align technology
benefits with the clinical results. For example, in the U.S., the Food and Drug Administration
approved a pediatric clinical trial for neuroblastoma, the second most common tumor in
22

children. Dell donated an initial $4 million, along with cloud computing technology, to speed
up the development of personalized medicine trials.

Contrarian View
If Analytics Are Positioned for Techies Only, Use Complicated Geek Speak, Are
Expensive, and Are Not Secure, Then ...
The usage of many analytics solutions has traditionally been dominated by quantitative analysts
(statisticians and data scientists) with little involvement from business users. If providers fail to make
the solutions user friendly, intuitive and easy to decipher, then the use of analytics will not take off.
Investment in analytics was traditionally considered expensive. If providers fail to demonstrate
adequate value to the buyers, then adoption of analytics can fail. Newer delivery methods like cloud
help in lowering the initial costs, but any compromise on the security of the data can create adverse
publicity, further jeopardizing the whole analytics initiative.

Vendors to Watch
The following are some important providers to watch (listed at random):

SAS

IBM

SAP

HP

Page 12 of 16

Gartner, Inc. | G00272243

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

Oracle

Microsoft

Qlik

Yellowfin

Explorys

Humedica (an Optum company) and Optum

Predilytics

ConvergeHEALTH (A Deloitte firm)

Gartner Recommended Reading

Some documents may not be available as part of your current Gartner subscription.
"Market Trends: Differentiate Within Vertical Industries by Leveraging on Internet of Things"
"Market Trends: Healthcare Is the Next Growth Frontier for Communication Service Providers"
"Forecast: Internet of Things, Endpoints and Associated Services, Worldwide, 2014"
"Market Insight: Changes in England's National Health Service Create New Market Opportunities"
"Market Trends: Technology Is Catalyzing Market Developments and Creating Opportunities for
Value-Based Healthcare"
"Market Insight: Disruptive Change Is in the Making for Health Apps"
Evidence
We used a combination of primary research with various industry agencies and several technology
providers, as well as secondary research. We also used data from dialogues with Gartner industry
experts, market share and forecast data, search analytics, and client inquiry databases.
1

"National Center for Health Statistics. Health, United States, 2013: With Special Feature on
Prescription Drugs Table 112." Centers for Disease Control and Prevention. 2013.
2

"The Economic Case for Health Care Reform." The White House.

"Improving Patient Flow: The Esther Project in Sweden." Institute for Healthcare Improvement.

M. Tepponen, South Karelia Social and Health Services (Eksote) Teija Hammar, National Institute
for Health and Welfare (THL). "Managing Client Oriented Processes in an Integrated Organisation."
European Centre for Social Welfare Policy and Research.

Page 13 of 16

Gartner, Inc. | G00272243

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

"Fast Facts All Medicare Shared Savings Program and Medicare Pioneer ACOs." Centers for
Medicare and Medicaid Services. May 2014.
6

M. Evans. "Data Collection Could Stump Next Phase of Predictive Analytics." Modern Healthcare.
12 July 2014.
7

J. Carreyrou and C. S. Stewart. "Why It's So Hard to Fix Medicare Fraud." The Wall Street Journal.
25 December 2014.
8

K. Scannell. "DoJ Uses Big Data to Crack Medicare Fraud Schemes." The Financial Times. 12
January 2015.
9

"How to Improve Appendectomy Care Outcomes Using Advanced Analytics in Healthcare." Health
Catalyst.
10

S. Rosenbush. "Blue Cross Expects Cost Savings From Big Data Dive." CIO Journal, The Wall
Street Journal. 30 March 2012.

11

"PA Consulting Group and NHS England Win "Cloud Innovation" Award in Computer Weekly's
European User Awards for Enterprise Software." PA Consulting Group. June 2013.

12

"Case Study Lancashire Case NHS Foundation Trust." Yellowfin. 2013.

13

B. McKenna. "Lancashire NHS Trust Deploys Yellowfin Mobile BI to Enhance Care." Computer
Weekly. 17 June 2013.
14

"UPMC Selects Oracle to Power Enterprise Healthcare Analytics Initiative." Oracle. 1 October
2012.
15

"Pacemaker and Defibrillator Patients Adhering to Remote Monitoring With St. Jude Medical's
Merlin Technology Saw More Than Double Survival Rate." St. Jude Medical. 8 May 2014.
16

N. Singer. "When a Health Plan Knows How You Shop." The New York Times. 28 June 2014.

17

"Forest Laboratories Joins ConvergeHEALTH by Deloitte's Rapid Learning Network in

Collaboration With Intermountain Healthcare to Support Insights Into Optimal Patient Care."
ConvergeHEALTH. 28 April 2014.
18

D. Munro. "Apple Gives Epic and Mayo Bear Hug With HealthKit." Forbes. 3 June 2014.

19

"Fact Sheet: President Obama's Precision Medicine Initiative." Office of the Press Secretary, The
White House. 30 January, 2015.
20

"UK to Become World Number One in DNA Testing With Plan to Revolutionise Fight Against
Cancer and Rare Diseases." Genomics England. 1 August 2014.

Page 14 of 16

Gartner, Inc. | G00272243

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

21

R. Winslow. "23andMe to Mine Genetic Database for Drug Discovery." The Wall Street Journal.
12 March 2015.

22

J. Cavallo. "First Genomic-Based Pediatric Trials Launched in Neuroblastoma." The Asco Post.
15 January 2012.

This document is published in the following Market Insights:

Industry Market Strategies Worldwide

Page 15 of 16

Gartner, Inc. | G00272243

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

This research note is restricted to the personal use of bill.gannon.demo@gartner.com

GARTNER HEADQUARTERS
Corporate Headquarters
56 Top Gallant Road
Stamford, CT 06902-7700
USA
+1 203 964 0096
Regional Headquarters
AUSTRALIA
BRAZIL
JAPAN
UNITED KINGDOM

For a complete list of worldwide locations,

visit http://www.gartner.com/technology/about.jsp

2015 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This
publication may not be reproduced or distributed in any form without Gartners prior written permission. If you are authorized to access
this publication, your use of it is subject to the Usage Guidelines for Gartner Services posted on gartner.com. The information contained
in this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy,
completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This
publication consists of the opinions of Gartners research organization and should not be construed as statements of fact. The opinions
expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues,
Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company,
and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartners Board of
Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization
without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner
research, see Guiding Principles on Independence and Objectivity.

Page 16 of 16

Gartner, Inc. | G00272243

This research note is restricted to the personal use of bill.gannon.demo@gartner.com