HCF keeps members healthy with big data

HCF has invested in IBM analytics systems to tackle big data, using them to analyse claims.

As part of an ongoing core systems upgrade, HCF is looking to big data analytics to help keep its members as fit and healthy as possible.

Over the past five years, HCF has been replacing parts of its core systems, which are up to 20 years old.

"Parts of it work very well. Some parts are getting very clunky," HCF CIO Patrick Shearman said.

Within the course of these upgrades, the company had implemented the ILOG, SPSS, Cognos and Lombardi products. All of these products have been bought by IBM in the last five years. According to Shearman, it was a logical step to consolidate the agreements in a formal fashion with the new parent company, as well as enlisting IBM's help on the core systems transformation. Consequently, the company has just signed a multi-million dollar deal that will see IBM help HCF with its IT transformation, with a focus on improving analytics.

HCF has purchased an IBM zEnterprise 114 and Netezza data warehouse appliance to run IBM's smart analytics system (ISAS) to speed up analytics.

HCF processes claims using its HICAPs, an electronic real-time claims and payments system. Using the new analytics platform, it will be able to detect claims fraud in real time.

The company will be able to also analyse the potential of customers to lapse on payments or, leaving the health fund to go somewhere else. This warning provides the fund with time to try and retain customers.

It will also use its claims information to detect when people who are unwell are likely to become even more unwell, enabling the company to provide them with information that will help them stay fit.

HCF had been doing this analysis intermittently previously, however, it had been "intense in terms of capacity on the mainframe", Shearman said. With IBM's smarter analytics system, HCF can run the numbers constantly in real time.

HCF would stay with its internal data for analysis, Shearman said, although it would make new use of internal unstructured data, such as text files from call centres, for analysis.

Although Shearman had thought of using external social media data, and had attended briefings about how it was used in other industries, he said that there were clearly privacy issues around doing so, and that he'd decided not to in the initial phase of the company's analytics ramp up. For HCF, big data was more about speeding up analysis, than about pulling information from lots of locations to correlate, he said.

In terms of skills, HCF wouldn't be hiring any data scientists to be able to handle the analysis — four of the company's 81-strong team work in the analytics team. For Shearman, it was about using his in-house team and training up to the abilities they needed.

HCF had looked at other vendors, Shearman said, however, given the investment HCF already had in IBM products, it just made sense to stick with the vendor. Shearman wouldn't disclose the return on investment that he expected, even though the company had conducted a detailed business case, but did say that he expected that the company would get its return on investment before the four-and-a-half year IBM contract (which is understood to be worth around $20 million) ran out.