Monday, April 25, 2011

American Airlines and CKM

The other morning I was sitting in a meeting and a question was raised. That question was "do we really know that understanding our data better, and using tools such as data visualization, will really improve healthcare?"

Only in healthcare would this question still be asked in 2011.

Industries of all types have learned over the last 20 years the power of developing knowledge based on their actions and the actions of their customers. Many of these industries are not as complicated as healthcare. But I believe that the idea that healthcare is the most complex industry is erroneous; however, it's been my experience that this idea is deeply rooted in the culture of medicine. It seems to be felt that since there are so many uncontrollable factors such as patient complexity, patient compliance, variations in disease presentation, and the intricate web of payers and delivery systems, it is not possible to understand the "healthcare system" with data. I do not believe this is true, and in support of my position, I'd like to present a case from an industry that is at least as complex as the healthcare system: the airline industry.

Within the airline industry, the uncontrollable variable range from mechanical problems to passenger behavior to natural disasters to terrorist attacks... to the most unpredictable of all- the weather! Despite all of these variables, there are many examples of how the airline industry has transformed data into knowledge, improved service, and remained profitable.

Take, for example, the recent case study reported by American Airlines. American Airlines had identified fraud as a major cost to their business. However, they had no data warehouse technology or knowledge management plan for addressing fraud in their system. It was originally estimated that an effective data analytics system would save the company $150,000 per year. Using an "off-the-shelf" data warehouse solution, great gains were immediately seen, and ultimately saved the company $5 million over 5 years. The success was credited to the new system's ability to identify forms of fraud that the company never knew existed and giving the company the ability to make changes to eliminate those causes.

While it is true that we may be many decades away from being truly knowledgeable about how the US healthcare system works, it is also true that there are many technologies available today that, if utilized in healthcare, could have immediate and meaningful impact. Targeted solutions can quickly exceed expectations when we focus on creating new actionable knowledge with current technologies.

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