Knowledge Discovery: Managing Beyond

Simple Analytical Processes in Healthcare

Transforming data into knowledge

Viewpoint Paper
Table of contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Key Knowledge Management Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Knowledge discovery processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Managing the knowledge discovery function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Additional challenges in the near future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
There is valuable knowledge buried within the vast amounts of data healthcare payer
organizations collect and manage.
Discovering the actionable knowledge contained within those complex data sets calls
for a careful balance of people, processes, and technology and a multidisciplinary team
approach that leads to improved decision-making and better health outcomes.

Introduction Such a finding suggests an opportunity for targeted

Leaders in public and private healthcare payer
organizations are frequently confronted by the
paradox of the Information Age: They spend enormous
sums and collect and manage terabytes of data, yet
they lack the knowledge required to make decisions
about benefit design and program investments. The
problem arises when healthcare organizations fail to
recognize that data differs from actionable knowledge
in important ways. Transactional data is an organized
collection of discrete bits of information focused on
an individual transaction—for example, a claim for
payment or a verification of eligibility. Except for the How do we get there? The array of potential analytic
simple relationships embedded in the transaction itself, processes and tools creates complex challenges, even
this data lacks perspective, context, semantics, and the in healthcare organizations that recognize their role
value statements needed to discover meaning.
Consider the following example. Most healthcare
payers regularly perform basic data correlation
analysis, such as reporting the percentage of
membership by age/gender cohorts that account for
20% of claims cost. Yet this data is of limited value. A
decision-maker would correctly respond to this type of
report with a “so what?” Analysis that ceases at this
level does not discover the knowledge that exists but is
hidden behind the volume and complexity of the data.
If, however, the same inquiry is extended beyond
simple analysis and into a knowledge discovery
model, the process may uncover that younger age
cohorts, particularly women, are increasingly using
screening diagnostics and preventive services,
particularly related to cardiovascular health.
intervention that, when reviewed by epidemiology and
clinical experts, could lead to a recommendation to
target specific wellness and primary and secondary
prevention programs to these younger women. The
care management intervention that is designed to
incorporate knowledge discovery processes can
provide long-term health benefits for the members,
as well as stronger financial performance for the
healthcare payer organization. The process of
discovering knowledge creates far more value and
opportunity for program improvement than can be
gleaned from simple canned analytic reports.
and importance. Even simple analytic processes can
consume significant resources, and may not produce
actionable knowledge. Those processes create
information governance, resource allocation, and
prioritization issues. Unless vigorously managed,
they can lead to duplication, waste, and quality
control issues.
HP believes clinical information management
processes must be viewed as part of a global medical
management approach that bridges the information
technology, medical policy, clinical operations, and
quality management functions of most healthcare
payer organizations. In this paper, HP examines
some of the analytic processes that transform data
into knowledge that informs decision-making. This
paper will also lay out some factors public and private
healthcare payer organization decision-makers should
consider when planning their approach to information
management and business intelligence.

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Figure1. The informatics
continuum

Primary Data Primary Data Primary Data Primary Data Primary Data Primary Data
Actionability or Utility Minimal Low Moderate High Highest
Criteria “Raw” data: Counts, Arithmetic manipulation 2° data in a valid Information viewed Knowledge illuminated
sums, differences of 1° data: Averages, comparative context: from a defined with defined value
trends, rates Benchmarks actual perspective: Goals, statements
vs. expected, change targets, standards
overtime
Examples Our pharmacy spend We averaged $250 Compared to similar Our 91st percentile We should invest $2
last year was $30 pmpm* in pharmacy health plans our rank is $85 pmpm mm to achieve our
million costs last month pharmacy costs rank above the cut-off for pharmacy target in
at 91st percentile our pharmacy target order to provide
200 members Our admit rate was
of <75 percentile high-quality, cost-
were admitted for 4.0 per 1,000 mm** Our predictive
effective care
cardiology procedures and dropped 5% model projected Significantly lower
last quarter excluding over the year an admit rate of than expected risk- Our strong
transplants 5.2 per 1,000 mm adjusted admit rate performance on
shows our care is best cardiac admits fulfills
in class our mission as a
leading Medicare
Advantage plan
What it tells you What happened in What happened in How good or bad Was it good enough Why do we care?
individual cases? aggregates of cases? was it? or worse than can be
tolerated?

*per person, per month

** member-months

Key Knowledge Management Knowledge discovery processes

Concepts
To fully understand this approach to knowledge
management, it may help to examine several key
concepts relating to information management and
business intelligence.
• Knowledge discovery is the process of revealing
the actionable knowledge concealed within large,
complex data sets. It involves several key steps,
including study design, data preparation, analytic
queries, validation, interpretation, and presentation.
• Actionable knowledge informs decision-making by
public and private healthcare payer organizations
in ways that simple data cannot. Knowledge
incorporates comparisons, context, perspectives,
and value statements that shape the transformation
and interpretation of data.
Data must be transformed into knowledge in order
to be fully actionable and of high value to decision-
makers. Table 1 illustrates the major analytic steps
through which data must be managed to transform it
into information and then knowledge. Close inspection
of the transformation processes in the table reveals
that knowledge discovery is a multistep production
that extends well beyond the basic reporting
functionality of most transactional data systems.
Along the continuum, emerging knowledge is placed
into context, viewed from a defined perspective, and
ultimately evaluated using the mission and values
of the individual healthcare organization. The final
transformation step, converting knowledge to wisdom,
involves tying the knowledge to the organization’s
strategic plan, mission, and vision, and is beyond the
scope of this paper.

• Knowledge discovery processes, require a careful

balance of people, processes and technology to
create value and avoid waste and duplication.
Managing an efficient and effective knowledge
discovery function requires a multidisciplinary team
approach that employs disciplined, well-regulated
processes that deploy the appropriate technologies
for each business or research question.

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It is important to understand that knowledge discovery
processes cannot be fully automated and that even
steps that can be performed by technology will require
configuration, calibration, maintenance, and updating by
both technical experts and subject-matter experts familiar
with the entirety of the healthcare delivery system. Thus,
knowledge discovery requires an ongoing commitment
to people, processes, and technology. Faced with this
reality, leaders of healthcare organizations must balance
resource allocation between knowledge discovery
and the rest of the enterprise, as well as within the
knowledge discovery function itself. It requires a
specialized set of skills to manage the analytic
function, and organizations do well to ensure they
have the best possible leadership directing this critical
and resource-intensive set of functions.
Sound analytic processes require a multidisciplinary
team approach. Because the path from data to
knowledge is complex, the team must possess
analytic, clinical, scientific, technical, and business
expertise. The types of expertise include, but are
not limited to, clinicians, informaticists, healthcare
economists, epidemiologists, ontologists, public
health professionals, and statisticians. A team of this
breadth ensures the knowledge discovery processes
and methodology are valid and robust, the data
used as input for the analysis are clean, precise and
standardized, and the outputs are accurate and
meaningful to the end-user’s needs.
The ideal final products delivered need to be
immediately accessible and understandable to
decision-makers. They also shouldn’t require any
additional manipulation or interpretation to support
their use. Knowledge discovery models must consider
the end user’s needs throughout the process, because
that is the only way to ensure the end result creates
optimal value. Often the end-user focus provides the
crucial insight that represents the difference between a
good result and an outstanding result.
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The multidisciplinary analytic team must address a
variety of questions, including:
• Assessment
–– Does the analysis produce knowledge, and, more
importantly, is the knowledge actionable?
–– Will it be sufficiently valuable to end users to
justify the resource requirements?
–– Will it be an ad hoc query or should it be an
ongoing recurrent measure?
• Execution
–– How should the analytic process be structured—
for example, pre-populated temporary data
structures versus run-time queries?
–– What system resources are required to run the
analyses?
–– Is further drill-down required to effectively address
the questions of interest?
• Validation

• Design –– Are the outputs clinically plausible?

–– What are the correct clinical elements? –– Are the outputs statistically valid?

–– What types of statistical treatments are needed to • Documentation

produce valid, actionable outputs? –– How and to whom should outputs be displayed?
–– Is data quality sufficient in terms of precision, –– Are observations best depicted in graphic versus
completeness and accuracy to support the analysis? tabular presentations?
–– What benchmarks and comparators are valid for –– Will the analysis gain value with accompanying
use in interpreting analytic results? narrative interpretation?
–– Which version of products, data, software, etc. –– How will methodology be documented? What
should be used to ensure analytic consistency artifacts of analysis should be archived?
over time?
Resources deployed toward knowledge discovery are
–– Which standards (for example, data standards,
not available for other competing priorities. This makes
privacy and security standards, modeling standards)
it critical that every analytic output creates value for
should be implemented, when and how?
the organization and that knowledge production is
efficient and effective. Three broad elements must
be addressed in order to implement knowledge
discovery-based decision-making: governance,
technical capabilities, and management of human
resources. Organizations that fail to attend to all three
will usually experience waste and duplication. More
importantly, they will never achieve the fully informed,
insightful decision-making that is the primary benefit of
knowledge discovery.

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Table 2: Example of an ad hoc
query process

End User

Knowledge gap Enter request Validate Knowledge Change

defined specifications research review management
question
Process Mgr.

Modularize and
Value
Assess and update query Tables, graphics
as recurring
prioritize library and narrative
deliverable
Scientific/

Develop Context research, Face validity

Clinical

identify Clinical and Request

research question review and
comparators and scientific drilldown
including stat outlier
clinical coding validation
treatments evaluation
Analytics

Query design
including Produce initial Analytic
peer review Full data run
staging and results sample
tools selection

Governance After an organization commits resources to an

Many knowledge discovery processes originate
in ad hoc query requests from end users and
other stakeholders. Although these queries can
generate important insights, they also can create an
enormous drain on time, energy, and resources. An
organization’s knowledge governance approach
must assess and manage these demands by asking
questions such as these:
• Does the knowledge sought already reside in an
existing analytic output?
analysis, it is equally important to plan and execute
a robust yet cost-efficient analytic process. Failure to
do so can result in either invalid or misleading results.
A fundamental truth in any analytic process is “bad
data is worse than no data.” This is because bad
data ultimately leads to bad information, which, in
turn, leads to false knowledge. It makes you think you
know something that you don’t actually know. Proper
governance minimizes the possibility that “bad data”
will misinform decision-making.

• Can the knowledge sought be validly created from
the available inputs and in the time allotted?
• Does the knowledge sought fully address the true
question of interest?
• How does the importance of the knowledge sought
compare to other inquiries in queue and to other
tasks assigned to the analytic staff?
• Should the knowledge sought be put into
regular production?
Table 2 provides an example of a robust ad hoc
query process that contains sufficient checks and
balances to ensure the end products are clinically
valid, scientifically robust, and provide a solid
foundation for decision-making. The table illustrates
the process hand-offs and decision points that must
be managed to achieve a disciplined, well-regulated
process that reliably and efficiently produces value for
the organization.

5
Technologic capabilities
Knowledge discovery cannot be fully automated.
This is due in part to the fact that different tools are
required, depending on the context and perspective of
the data-to-knowledge transformation. The situation is
further complicated by the complexity of commercially
available analytic product suites. Most applications
prepackage a great deal of standard output, but
they can be quite expensive to deploy and may not
effectively address the context, perspectives, and
values of a particular healthcare payer organization.
Unfortunately, organizations often invest heavily in
these tools and assume that a handful of super-users
working in isolation from the rest of the organization
can use them to full advantage. HP has never seen this
to be the case.
Furthermore, there are several reasons why a single
analytic suite might not be the right answer for all
of a healthcare payer organization’s needs. First,
groupers (the core technology) have different strengths
and weaknesses and are designed for different
purposes. A grouper designed for actuarial purposes
in a commercial environment may under-perform at
case-finding for Medicare chronic care management.
Collateral tools like mappers and statistical packages
also vary, as do the display and presentation
requirements for different end-user audiences.
Analytic suites generally do not provide the capability
for predictive simulation modeling to test how the
knowledge discovered might change in alternate
scenarios, nor do they allow users to model the clinical
and financial affects of program design changes.
Next, from an efficiency point of view, analytic
suites extract, transform, and load a full data set
on a regular basis, yet many analytic processes
can be run more efficiently on leaner data sets
requiring less manipulation. Information presentation
layers may provide insufficient drill-down to isolate
variances or anomalies, and may offer insufficient
configurability to address program-specific needs,
requiring work-arounds and one-off solutions. The
suites are complex and often contain functionality of
limited use. Implementation and configuration can
be time consuming and resource intensive. Training
requirements and seat licenses limit the number of
super-users and create analytic bottlenecks.
In short, analytic suites cannot replace the full human
capabilities needed to design, execute, and present
knowledge outputs in production or on an ad hoc
basis. The key to obtaining high-quality analytic
deliverables is choosing the right tools for each job
and getting them into the hands of the right people.
This approach enables public and private healthcare
payer organizations to calibrate their knowledge
production investments and to nimbly and flexibly
respond to an ever-changing healthcare delivery
environment. By combining these tool kits and full
applications, running them on a strong infrastructure
with a well-balanced multidisciplinary team and a
strong, disciplined knowledge discovery processes,
healthcare payers can realize the full value of
knowledge discovery.
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Table 3: Knowledge discovery
management models

Challenge Self-Service Model Business Process Outsourcing Model

Skill set availability Maintain and manage internal staff skill mix Leverage broad multidisciplinary team of
with redundancy to ensure continuity clinical and technical SMEs

Knowledge discovery and information Develop, manage and maintain disciplined Specify deliverables within global budget with
management processes multistage process across work units SLAs related to process and timelines

Execution risk Manage competing priorities across workflows Reduce/eliminate risk through specifications
and deliverables and SLAs around managed process

Tool availability Commit infrastructure and training resources to Leverage wide array of commercial off-the-
maintain and use single suite of analytics tools shelf and custom-developed tools

Managing the knowledge Business process outsourcing (BPO) of the knowledge

discovery function is the alternative to the self-service
discovery function model and addresses many of the self-service model’s
As shown in Table 3, healthcare payer organizations problems. Knowledge discovery service providers
typically adopt one of two knowledge discovery can spread most of the high-cost items over multiple
management models, or a hybrid of the two. In the customers. These include, but are not limited to, the
self-service model, the healthcare payer organization cost of fixed infrastructure, software licensing, highly
builds its own internal informatics capability. The paid SMEs, clinicians, scientists, and intellectuals.
organization establishes governance, purchases tools Healthcare payer organizations implementing
and software packages, sets up the infrastructure, BPO services have full price visibility and can
hires analytic staff and subject-matter experts, limit upside cost risk (unlimited increased costs for
arranges training, and accepts total responsibility. software upgrades, security breaches, etc.) through
The approach is simple, traditional, and provides service-level agreements.
a high level of control. It enables healthcare payer
National analytics organizations can provide a broad
organizations to invest in intellectual capital and retain
range of subject-matter expertise, as well as top-
it as assets. In some circumstances, this intellectual
notch clinical and scientific leadership. Cross-project
capital may be a key market differentiator.
integration and leverage provides high-quality output
The self-service model does have some important while maintaining acceptable price points. Perhaps
limitations. It requires each healthcare payer most important, outsourcing enables healthcare payer
organization that adopts it to fully staff and equip the organizations to access a robust end-to-end solution
core nondiscretionary functions and to build or buy a with limited execution risk because of defined process
complete set knowledge discovery processes and specifications and key performance indicators. It is
technology. That technology often comes with high fixed important to recognize the BPO model does depend
costs. Leadership must actively manage the resources on collaboration between the service provider and
on a day-to-day basis to maintain productivity and the end users and mutual trust and understanding
effectiveness. Managers must address the challenge of between the healthcare payer organization and the
functions that require only episodic or partial full-time supplier. Healthcare payer organizations using a BPO
employee staffing, as well as provide resources to model must communicate their knowledge needs and
projects that require specialized domain expertise. their mission, values, and strategic goals in order to
Self-service knowledge discovery organizations gain the highest level of value.
often must choose between over-resourcing with the
attendant excess overhead, and under-production with
the resulting gaps in knowledge.

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Additional challenges in the Conclusion
near future Knowledge discovery is an essential component of
public and private healthcare payer organization
All the trends in healthcare information suggest that
management. Transactional data from claims,
there is an explosion in volume and complexity on
eligibility, and care management systems must be
the horizon. The migration from ICD-9-CM diagnostic
transformed into actionable knowledge in order
coding to ICD-10 is only one well-known contributor to
to be valuable for decision-making in the complex
this explosion of data.
healthcare environment.
Other factors include the advance of research in
This transformation is best accomplished through a
which new diseases, new treatments, and new data
rigorous approach that employs clinical, scientific,
relationships (such as genomic information applied to
and technical subject-matter experts, disciplined
disease phenotypes) also add to volume and complexity.
workflows and processes, and efficient use of
Finally, the widespread adoption of electronic health
appropriate technology.
records and health information exchanges soon will
produce vast new sources of transactional data Managing the knowledge discovery process is a
related to clinical encounters. It is already impossible specialized function that balances governance,
to make knowledge-guided decisions using simple technical issues, and resource allocation challenges.
analytic processes. Healthcare payer organizations Every healthcare organization needs to actively
and other healthcare organizations must consider how engage in transforming data into actionable
they will incorporate a balanced approach to people, knowledge. Doing so provides the means to improve
processes, and technology into their knowledge access and quality and to control costs in an evidence-
discovery processes in order to effectively and based fashion. Failure to do so leads to gaps in
efficiently leverage these emerging sources of data. understanding and uninformed decision-making.
HP believes planning and resourcing the knowledge
discovery function will become increasingly important
to effectively operate public and private healthcare
payer programs. This planning should be addressed
in every organization’s strategic plan and should
involve leaders from benefit, clinical, operational,
quality, and IT functions.

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About the authors
Franklin Din
Franklin Din directs the HP Medical Informatics
Center of Excellence. After practicing dentistry
for more than 20 years, he completed a National
Library of Medicine-funded fellowship in biomedical
informatics at Columbia University. His range of
medical informatics experience includes clinical
decision support applications, use of Web 2.0 and
advanced cell phone functions to improve medical
communication, improvements to the National Cancer
Institute’s NCI Thesaurus, and linking biochemical
pathways with diseases to enable translational
research knowledge discovery. Prior to joining EDS,
now HP, in 2009, Din served as senior informatics
consultant at Apelon, a firm providing data
standardization and biomedical terminology services
across the full range of healthcare stakeholders.

Kit Gorton
Kit Gorton leads the Medical Management practice at
EDS, now HP. A pediatrician by training, he practiced
for nearly two decades in federally qualified health
centers. He served in a number of positions in the
Pennsylvania Department of Public Welfare, including
as chief medical officer, a role that oversaw the
department’s quality management functions, including
external quality review. Prior to joining EDS in 2008,
Gorton served as president and chief medical officer of
APS Healthcare, a quality improvement-like organization
providing informatics and care management services
to commercial and public customers.

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© Copyright 2009 Hewlett-Packard Development Company, L.P. The information contained herein is subject to
change without notice. The only warranties for HP products and services are set forth in the express warranty
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additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein.
4AA2-8262ENW, September 2009