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How Big Data Will Transform Our Economy And Our Lives In 2015

How Big Data Will Transform Our Economy And Our Lives In 2015 | Healthcare and Technology news |

The great Danish physicist Niels Bohr once observed that “prediction is very difficult, especially if it’s about the future.” Particularly in the ever-changing world of technology, today’s bold prediction is liable to prove tomorrow’s historical artifact. But thinking ahead about wide-ranging technology and market trends is a useful exercise for those of us engaged in the business of partnering with entrepreneurs and executives that are building the next great company.

Moreover, let’s face it: gazing into the crystal ball is a time-honored, end-of-year parlor game. And it’s fun.

So in the spirit of the season, I have identified five big data themes to watch in 2015. As a marketing term or industry description, big data is so omnipresent these days that it doesn’t mean much. But it is pretty clear that we are at a tipping point. The global scale of the Internet, the ubiquity of mobile devices, the ever-declining costs of cloud computing and storage, and an increasingly networked physical word create an explosion of data unlike anything we’ve seen before.

The creation of all of this data isn’t as interesting as the possible uses of it. I think 2015 may well be the year we start to see the true potential (and real risks) of how big data can transform our economy and our lives.

Big Data Terrorism

The recent Sony hacking case is notable because it appears to potentially be the first state-sponsored act of cyber-terrorism where a company has been successfully threatened under the glare of the national media. I’ll leave it to the pundits to argue whether Sony’s decision to postpone releasing an inane farce was prudent or cowardly. What’s interesting is that the cyber terrorists caused real fear to Sony by publicly releasing internal enterprise data — including salaries, email conversations and information about actual movies.

Every Fortune 2000 management team is now thinking: Is my data safe? What could happen if my company’s data is made public and how could my data be used against me? And of course, security software companies are investing in big data analytics to help companies better protect against future attacks.

Big Data Becomes a Civil Liberties Issue

Data-driven decision tools are not only the domain of businesses but are now helping Americans make better decisions about the school, doctor or employer that is best for them. Similarly, companies are using data-driven software to find and hire the best employees or choose which customers to focus on.

But what happens when algorithms encroach on people’s privacy, their lifestyle choices and their health, and get used to make decisions based on their race, gender or age — even inadvertently? Our schools, companies and public institutions all have rules about privacy, fairness and anti-discrimination, with government enforcement as the backstop. Will privacy and consumer protection keep up with the fast-moving world of big data’s reach, especially as people become more aware of the potential encroachment on their privacy and civil liberties?

Open Government Data

Expect the government to continue to make government data more “liquid” and useful – and for companies to put the data to creative use. The public sector is an important source of data that private companies use in their products and services.

Take Climate Corporation, for instance. Open access to weather data powers the company’s insurance products and Internet software, which helps farmers manage risk and optimize their fields. Or take Zillow as another example. The successful real estate media site uses federal and local government data, including satellite photography, tax assessment data and economic statistics to  provide potential buyers a more dynamic and informed view of the housing market.

Personalized Medicine

Even as we engage in a vibrant discussion about the need for personal privacy, “big data” pushes the boundaries of what is possible in health care. Whether we label it “precision medicine” or “personalized medicine,” these two aligned trends — the digitization of the health care system and the introduction of wearable devices — are quietly revolutionizing health and wellness.

In the not-too-distant future, doctors will be able to create customized drugs and treatments tailored for your genome, your activity level, and your actual health. After all, how the average patient reacts to a particular treatment regime generically isn’t that relevant; I want the single best course of treatment (and outcome) for me.

Health IT is already a booming space for investment, but clinical decisions are still mostly based on guidelines, not on hard data. Big data analytics has the potential to disrupt the way we practice health care and change the way we think about our wellness.

Digital Learning, Everywhere

With over $1.2 trillion spent annually on public K-12 and higher education, and with student performance failing to meet the expectations of policy makers, educators and employers are still debating how to fix American education. Some reformers hope to apply market-based models, with an emphasis on testing, accountability and performance; others hope to elevate the teaching profession and trigger a renewed investment in schools and resources.

Both sides recognize that digital learning, inside and outside the classroom, is an unavoidable trend. From Massive Open Online Courses (MOOCs) to adaptive learning technologies that personalize the delivery of instructional material to the individual student, educational technology thrives on data. From names that you grew up with (McGraw Hill, Houghton Mifflin, Pearson) to some you didn’t (Cengage, Amplify), companies are making bold investments in digital products that do more than just push content online; they’re touting products that fundamentally change how and when students learn and how instructors evaluate individual student progress and aid their development. Expect more from this sector in 2015.

Now that we’ve moved past mere adoption to implementation and utilization, 2015 will undoubtedly be big data’s break-out year.

Irina Donciu's curator insight, January 15, 2015 4:33 AM

The great Danish physicist Niels Bohr once observed that “prediction is very difficult, especially if it's about the future.”

Maryruth Hicks's curator insight, September 8, 2015 11:27 AM

Digital learning and big data in education might lead to educational reform!!

The Health-Cost Slowdown Isn’t Just About the Economy

The Health-Cost Slowdown Isn’t Just About the Economy | Healthcare and Technology news |

It’s one of the most important economic questions today: Is the snail-like growth of health costs over the last several years a real trend, or is it merely a temporary part of the Great Recession’s aftermath?

The data experts who compile the government’s official numbers on health spending lean toward the more pessimistic view. They think the slowdown – to the lowest level of growth on record – stems in large part from Americans skimping on medical care during tough times.

“The pattern observed in recent years is not unique and is consistent with historical patterns,” Anne Martin of the Centers for Medicare & Medicaid Services said after that agency released new numbers this week. The agency’s report put the argument this way: “The key question is whether health spending growth will accelerate once economic conditions improve significantly; historical evidence suggests that it will.”

I can’t tell you what’s going to happen to health costs in the next several years, but I do think the government’s analysts are putting an overly pessimistic spin on the numbers. When you look at the data in its entirety – not just over the last decade or two but going back to the 1960s — you see that the pattern over the last several years is not normal, even for a time of weak economic growth.

The normal pattern over the last 50 years has been for health care to take up a larger share of the American economy with each passing year. It has happened in both good times and bad.

There was an occasional year here and there in the 1960s,’70s and ’80s when health care remained roughly flat as a share of gross domestic product. But most of those years (1962, 1965, 1966, 1973, 1978 and 1984) didn’t occur during economic downturns. And all of them were followed by a return to health spending growing more quickly than the rest of the economy.

Some of this faster growth was a positive development. As a society gets richer and can comfortably afford basic material goods, it should spend more money on health care. To put the question in personal terms, if someone gave you $30,000 and let you decide between a third car and better health, which would you choose?

The problem in the United States is that we now spend so much money on health care that we appear to be wasting a fair amount of it. On a per-person basis, the United States spends close to twice as much as most other rich countries. With a medical system as bloated as ours, it’s much harder to be sanguine about cost growth that continues to outpace the rest of the economy’s growth.

Our high health costs, for example, are one big reason income growth has been so slow in recent years. Employers don’t have a secret stash of money to spend on health insurance. A dollar that goes toward health benefits is a dollar that can’t go toward giving someone a raise. The same goes for state and local governments that must choose between paying for their employees’ and retirees’ medical care and spending money on roads or education.

All of which offers reason to be pleased with the trends of the last several years. Health spending made up 17.4 percent of economic output last year, the government reported last week, unchanged from its share in 2012, 2011, 2010 or 2009. Doctors, nurses, hospital executives and insurers have all played a role in restraining costs, as an inchoate group of reformers has tried to reduce waste. Their guiding principle has been nudging insurers — private and government — to make payments based less on the quantity of health care provided and more on the quality: A hospital that does more tests and procedures but gets worse results than another hospital with similar patients shouldn’t benefit financially.

Those same reformers influenced the law known as Obamacare, and the law also plays a role. One provision has prodded hospitals to reduce the rate at which patients return to the hospital shortly after discharge.

So why are the government’s experts (and some others) so pessimistic that the slowdown is temporary? I think they are putting too much weight on recent history. See, there is one other period in the last 50 years that looks like the last few years, and it’s recent enough that today’s health analysts lived through it: the 1990s.

In the aftermath of the 1990-91 recession and the slow recovery that followed, health spending stopped growing more quickly than the rest of the economy. It accounted for 13.4 percent of economic output in 1996, the same share as it had in 1993.

But the weak economy doesn’t seem to have been the main reason. The rise of health maintenance organizations (or H.M.O.'s) – along with other attempts by insurers to hold down costs – was. Consider that the economy started growing rapidly again in 1996, but a suddenly flush American population didn’t start buying vast amounts of new medical care. Health spending stayed between 13.3 percent and 13.4 percent of economic output until 2000.

Then a backlash against H.M.O.'s took hold, and health spending started growing rapidly again. The surge didn’t end until the last few years, when the efforts of the reformers began to have a widespread effect.

As I said, I can’t tell you what the future will hold, but the simple cyclical economic story that some analysts prefer doesn’t seem to fit with the historical evidence. It’s simply not true that G.D.P. and health costs have historically moved in tandem. On the other hand, the experience of the 1990s demonstrates that a slowdown in health costs isn’t guaranteed to persist.

If patients start to rebel against some of the changes that have held down health costs – like narrow networks, which restrict which doctors they can see – spending may start to rise again. It also may start to rise if labor unions manage to undercut a tax on generous health plans or if Republicans succeed in stopping efforts to make Medicare more efficient. (Yes, that’s related to the infamous death-panel debate.)

Even without such backlashes, health spending seems likely to pick up. The population will continue aging, and the Affordable Care Act covers more people. But there would be a vast difference between a modest increase and a return to the earlier trends.

The American health care system really is changing. What happens next will be one of the biggest economic stories of the coming decade.

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