December 18, 2014
The End of Market Segmentation
by Syed Haider
Big data will bring three waves of change -- soon -- and they are already showing up in healthcare.
IBM’s CEO Ginni Rometty’s speech a year and a half ago giving marketers 18 months to “sink or swim” raised a few eyebrows, and her deadline is upon us. She defined three imminent waves of change:
Wave 1: The shift from the market segment to the individual. It spells the death of the marketing to the “average customer.” With the right data, you can do things like real-time pricing.
Wave 2: The evolution from reaching out to customers to creating a “system of engagement” that keeps track of interactions between brand and customer and uses insights at every touch point.
Wave 3: Data is used to personalize interactions and provide the right context.
Telling words, indeed, if you are a marketer who hasn’t gotten on the big-data bandwagon. For insurers, these words have a chilling relevance. Let’s see how these three waves can be adopted by insurers, especially in the healthcare space:
1. The shift toward individualized marketing is already in full swing, primarily because of healthcare reform, and its main enabler is data — mostly structured data, because insurers are still not ready to fully embrace big data. The more accurate and timely information an insurer can collect on an individual member’s interactions with the healthcare system, the more realistic its performance evaluation by the government. Of course, data-savvy insurers won’t have to wait for the government to identify gaps in the delivery of care and will work toward closing them. One doesn’t need the foresight of IBM’s CEO to predict that these insurers would be in the best position to squeeze competition out of the marketplace.
2. A system of engagement is also in various stages of existence at various health plans to closely monitor interactions between their members and providers and to manage aspects of the members’ health through programs for case management, disease management, etc. Those familiar with care management would readily recognize the role that predictive modeling plays in identifying and prioritizing candidates. We all know that without the right amount and quality of data, such models are useless. In the coming years, the scope of care management is only going to broaden, simply because the industry has shifted from a model of reactive interventions to proactive care management.
3. The idea of personalizing care more for the individual (or families) has been around for a few decades already. If you look at patient-centered medical-homes, you can see that the industry is already working, albeit slowly, to realize this vision. Ideals such as continuous and integrated care, seamless coordination and communication and constant improvement all rest on the effective use and exchange of information (structured and unstructured) among the various stakeholders.
It’s safe to conclude that the three waves are already upon us in the healthcare industry. Some insurers will ride them more effectively than others, because they will be able to harvest so much information — from electronic medical records, lab results, X-rays, MRI results, even genetic data.
Setting a hard and fast deadline might be a bit presumptuous, but it isn’t too hard to predict that it won’t take more than a few years to transform the role of big data from a luxury to an absolute necessity for them!