I was listening to NPR’s Marketplace last night, and I heard them talking about a settlement that had just been reached in New York. In this settlement, UnitedHealth Group will close a proprietary database run by their Ingenix subsidiary, and spend $50m to start a new, open database in its place.
The database in question is a gigantic repository of claims and payments, and Ingenix made a tidy living over the years by selling subsets of this data to insurers for really large sums of money. But for the insurers, the data is crucial, and they were the only game in town. The barriers to entry for another player were just too prohibitive for someone else to try to break into this business.
So what’s the problem?
The problem is that insurers made many of the decisions about how they were going to reimburse for services based on this database, and they were the only ones who could check the numbers. They were able to mine and manipulate the data to their advantage, and providers and insureds had no choice but to trust that the insurance companies were treating them fairly.
Thus, a lawsuit was born.
But what does this have to do with software? The Ingenix database was one of the biggest remaining walled data gardens out there, and it’s history. One by one, businesses that were in business only because of proprietary information are going the way of the dodo.
This is a really encouraging development for the health care industry – what’s the next walled garden to fall?