How to ensure you have the analytic capabilities to manage costs and maintain a competitive edge
Today, it is easy for your analytics tools to become outdated or for your organization to fall behind as new technologies and solutions rapidly emerge.
Staying ahead is essential in a healthcare landscape shaped by innovation, regulatory changes, and the nuances of value-based care (VBC). Whether you’re a payer or a provider, deciding whether to build analytics capabilities internally or partner with a vendor is a critical choice.
Factors like your organization’s current analytics maturity, existing investments, modernizing needs, and evolving business demands all play a role. For many, a hybrid approach, blending in-house solutions with vendor support, offers both flexibility and scalability, as well as access to advanced expertise and technology.
This guide shares best practices for strengthening your analytics and evaluating the support options that best fit your goals.
Here’s what you will learn in MedInsight’s Build or buy guide:
Establishing foundational requirements and analytic goals
Before deciding whether to build a custom solution or purchase an existing product, it is important to clearly define what you need from your healthcare analytics upgrade. Your chosen solution should meet the following essential requirements:
AI-enabled capabilities
Leverage advanced analytics and machine learning to uncover deeper insights and drive better outcomes.
Alignment with existing needs
Ensure continuity with your current workflows, data infrastructure, and business objectives while reducing manual efforts.
Scalability
Support continuous growth and adapt as your organization’s needs evolve to accelerate decision-making.
Cost-effective operations
Minimize not only upfront setup and development costs, but also ongoing expenses related to maintenance, upgrades, and support.
Seamless data integration
Connect and unify data from multiple, disparate sources for a holistic view and to adapt quickly to changing regulatory requirements.
Secure and reliable data management
Safeguard sensitive information with robust security protocols and ensure consistent data availability.
Organization-wide accessibility
Empower users across departments — from clinical staff to operations and finance — to easily access and act on analytics insights.
Rapid speed-to-value
Turn complex data into clear, practical insights to accelerate your return on investment and drive sustained business value.
Comprehensive support
Facilitate timely security updates, operational enhancements, and infrastructure management with analytics expertise and advisory services.
Establishing your analytic goals
Before deciding whether to build a custom analytics solution or buy a ready-made product, it is important to clearly establish what you want to accomplish. Start by identifying the main reasons you are investing in analytics and the results you hope to see. These may be different depending on the size of your organization.
Small organizations working with a limited budget may be tempted to rely heavily on existing staff and resources to build a custom analytics solution. However, if you are starting from the ground up, especially during times of change or increased risk, it is essential to carefully estimate the time, effort, and costs involved before moving forward.
For large organizations considering a new analytics solution or an upgrade, it is essential to compare the expenses and demands of building an internal system with those of purchasing an existing product. Be sure to factor in not just the initial setup costs, but also the ongoing effort required to keep the system current and operating smoothly, especially as technology and business evolve.
The case for building an analytic solution
In either scenario, initial arguments for “building” a solution often include:
The case for buying an analytic solution
The case for buying can include:
The case for a hybrid solution
Choosing between in-house and outsourced analytics capabilities can be challenging, but the decision is becoming increasingly unnecessary. Few healthcare organizations have the resources to develop their own analytics platforms entirely without external expertise. Any reputable healthcare analytics vendor will offer solutions designed to complement and enhance your existing infrastructure.
With a modular or hybrid approach, healthcare organizations can purchase specific components to integrate with or extend their current resources. This strategy acknowledges that no single system—whether developed internally or acquired—can fulfill all data management needs indefinitely.
For instance, an organization with a robust internal referral management system may still require an enterprise data platform, making it unnecessary to replace effective solutions already in place. Similarly, a team of actuaries may possess strong analytical skills but lack access to comprehensive data needed to assess total cost of care. And, Accountable Care Organizations (ACOs) may seek platforms that support advanced analysis.
Payer hybrid analytics
ACO hybrid analytics
Finding the right path to achieve your analytics goals
To chart the best path to your analytics goals, begin by evaluating the gap between your current analytics capabilities and your strategic objectives. Identify the skills and resources required to close this gap and decide if you should build internally or seek external support.
The timeline is another key factor. When do you need to start seeing results from your investment in enhanced analytics? Can you take an incremental build-or-buy approach? What are the projected capital, time, and personnel costs for each option? And what are the potential opportunity costs?
If outsourcing, thoroughly assess potential vendors for experience, security, certifications, and compatibility with your existing systems. Ask about their product roadmap to ensure their solutions will meet your evolving needs and develop a clear plan for implementation. A good vendor should clearly show you where you stand today and what is possible with enhanced analytics capabilities.
The decision to buy or build additional analytics capabilities should be guided by your objectives and expected return on investment (ROI). Consider where your ROI will come from and which key capabilities are essential to meeting value-based care requirements. Measurable ROI can be achieved through objectives such as time savings, increased efficiency, improved member satisfaction, higher retention rates, and other tangible benefits. Focus on initiatives that directly support these outcomes to maximize the value of your analytics investment.
Payer analytics goals
- Modernize outdated technology platforms
- Leverage industry-leading third-party benchmarks
- Enable EHR data integration
- Measure total cost of care
- Access high-quality data for advanced analytics
- Manage multiple lines of business
- Reduce infrastructure costs
- Enhance member engagement
- Build high-performance provider networks
ACO analytics goals
- Modernize outdated technology platforms
- Analyze risk contract terms and financial settlements
- Validate payer's analysis of financial settlement
- Leverage industry-leading third-party benchmarks
- Identify excess utilization and cost
- Pinpoint opportunities for targeted interventions
- Find and close quality and risk coding gaps
- Measure and report physician partner performance
How Milliman MedInsight can help
Establishing in-house healthcare analytics capabilities is a complex endeavor that does not end with hiring.
Whatever model you choose to create or upgrade your analytics capabilities, Milliman MedInsight can help. Our solutions are built on more than 75 years of Milliman actuarial expertise, close collaboration with healthcare organizations across the healthcare industry, and our unmatched commitment to quality, security, and innovation.
- Milliman MedInsight Health Cloud® — Includes a revolutionary data lake and warehouse architecture that enables healthcare organizations to maximize the value of their data.
- MedInsight Data Confidence Model — Incorporates formal steps, tools, and peer review to ensure healthcare data is accurate, reliable, and fully understood.
- Comprehensive security approach — Employs rigorous monitoring, along with extensive third-party testing and auditing, to protect sensitive healthcare information.
We offer both standalone products for specific business needs and enterprise solutions (VBC Platform and Payer Platform) that include the industry’s most highly regarded platforms for data warehousing and healthcare analytics, all tailored to your business requirements and analytics goals.
Additional resources
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