Business intelligence co. targets health care niche
Photo/Darren Fishell
John Morrow, left, and W. Hudson Connery are among the co-founders of the Portland-based iVantage Health Analytics. Connery serves as the company's CEO and Morrow is an executive vice president for the company.
Imagine scouring all of the publicly available Medicare data from 4,445 hospitals around the country. Then add a range of statistics from outside sources, proprietary data from other hospitals and try to figure out what it means.
It's what John Morrow, a founder of the Portland-based iVantage Health Analytics, calls paralysis by analysis.
"You can get lost in the data," he says.
The company, formed in 2011 through the merger of four separate health care information businesses, is banking on the financial need for hospitals to better understand the reams of patient data they collect on a daily basis. Last week, iVantage announced it had raised $10.9 million in a Series A minority equity offering that Morrow says will support the national growth of the company's now meager sales staff. Morrow says he expects the company will approximately double its 60-person staff in the next year.
Generally, that market of business intelligence is booming. Gartner, an IT market research firm, estimates the market for business intelligence services will grow from its $57 billion value in 2010 to $81 billion in 2014 and $136 billion by 2020.
Part of the need for better hospital data analytics, Morrow says, is driven by changes to reimbursement scenarios under the national Affordable Care Act reforms. He says those in his industry have seen the financial pinch on health care providers coming for years.
"The writing has been on the wall for decades," Morrow says. "The big challenge for all providers, but in particular hospitals, is that they're going to get paid less."
Charlie Therrien, president and CEO of Maine Coast Memorial Hospital in Ellsworth and an iVantage client for three years, says getting more efficient is a key way to meet that challenge.
"We've had data but we've not had the systems to analyze it in a format that is helpful to management," Therrien says.
Rather than replace existing payment and data management systems, Morrow says the iVantage products ingest data from those systems so as not to interfere with ongoing technological transitions, like switching to electronic medical records. That has allowed iVantage to find a ready market of hospitals, he says.
Across its broad range of health care data analyses, Morrow says his company has found, on average, that 6% of doctors at a given hospital are responsible for 90% of the significant variations in costs.
"When we work with an individual hospital, one of the questions is, 'Who are my 6%?'" Morrow says.
From there, the responses to that data become a management issue.
"The data don't lie," Morrow says. "We always say, 'Let the data speak.'"
That's the approach the company is taking with a $10 million federal innovation grant from the Centers for Medicare & Medicaid Services awarded last year. The company is part of a rural health coalition — the largest in the country to get a CMS innovation grant — that aims to save $30 million over three years at 48 critical access hospitals in Montana.
"That's a big find, but that's the goal," Morrow says.
Therrien says he can't quantify the product of any analyses his hospital has done using business intelligence programs, but he says gaining insight about where the hospital is least efficient in relation to national trends can help management better navigate long-term planning based on hard data that, previously, were stored in disparate databases.
"We've automated (our data) and had it in the computer system, but it just sits there and you're not taking advantage of the data," Therrien says.
According to Peter Aiken, founder of Data Blueprint and the Institute for Data Research, many chief executives have not unlocked the value of their databases.
"We think of data as the lowest level of the pyramid," Aiken says.
At the highest level, one finds knowledge and wisdom from collections of separate data points.
"But the systems themselves are not the answer," Aiken says.
That's Aiken's chief argument in a book he's nearly completed, in which he writes that companies should hire chief data officers to integrate better business intelligence into everyday operations.
One way to meet the financial challenges looming for health care organizations is to simplify their business model and cut unprofitable service lines or trim staff, Morrow says. But Therrien is hopeful that more efficient operations can pave the way to those savings.
And that's not just wishful thinking, according to Aiken. He estimates that hospitals stand to cut costs 30%, on average, by making sure the most basic and regular procedures are done in the most efficient way.
"We also want to grow, and find what areas we can grow without adding more resources," Therrien says.
Morrow says customers have seen savings around 10 times the amount spent to use his company's software. Its multi-state, offsite data storage locations hold information in the range of petabytes.
"Data and data storage is not a barrier for us and we're moving much of our processing to the cloud, so that becomes limitless from a technology standpoint," Morrow says. "That makes the business highly scalable."
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