Hands-On Healthcare Data

Chapter 5. Deep Dive: Claims Data

In the previous chapter, we looked at clinical data from electronic health records. EHR data are often the most highly sought data given the depth and richness from the perspective of care delivery. However, many analyses require a combination of both the clinical data as well as associated financial data. Although it may feel immoral or unethical to discuss financial considerations in the context of patient care, the reality is that the cost of care is an important input to all levels of decision-making in the healthcare industry.

For example, say a new drug was just approved with an effectiveness that is 3% better—83% of patients show improvement on the drug versus 80% on the current drug. This is great news until we realize that the new drug is not only more expensive but also more invasive—it is 5x the cost and requires an IV infusion versus being a simple shot. While the clinical decision to choose the drug with the simpler delivery mechanism may be simple, the cost decision is not. Is the additional efficacy or effectiveness worth the 5x increase in cost? What about 10x? At what point does the relatively small increase in performance no longer justify the increase in cost or complexity?

Efficacy and Effectiveness

The efficacy of a drug (or vaccine) is its performance in a highly controlled environment (e.g., a clinical trial), usually to remove or mitigate confounding factors.

Effectiveness, on the other hand, is the performance in the real ...