February 8, 2012
The recent movie Moneyball, based on Michael Lewis’ book, describes the cash-strapped 2002 Oakland Athletics’ efforts to build a competitive team with limited resources. . Oakland General Manager Billy Beane relied on sophisticated, seldom-used metrics to analyze players, leading him to make the right investments -- even when they defied conventional wisdom. With a meager $41 million budget, Beane turned the A’s into a powerhouse that gave the $125 million New York Yankees a run for their money.
The story is analogous to the situation government faces today. Given an ever-growing deficit, government needs to find ways to do more with less. And better intelligence and data analytics can go a long way toward making this possible.
When Vivek Kundra was federal chief information officer he launched an IT Dashboard in 2009 to shine light on $80 billion in information technology investments across government. Almost immediately, IT projects worth $27 billion were identified as over budget and behind schedule. After reviewing 38 of the highest-priority projects, 12 were accelerated, four were terminated, and 11 were reduced in scope, saving an estimated $3 billion. Kundra also announced the administration’s 25-point IT reform plan, which includes increased use of analytics to track progress and identify areas in need of improvement.
In other ways, government is identifying ways to do more with less by leveraging technology to sort through and understand massive amounts of information in just about every aspect of citizens’ lives from banking and health care to education.
Following enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, financial regulators increased data collection and analysis to improve their understanding of the financial system. Despite the reach of multiple agencies overseeing the financial markets, they lacked the tools, data and analytical capacity to recognize the stirrings of a crisis, let alone prevent one.
Dodd-Frank established the Office of Financial Research in the Treasury Department to improve the quality of financial data and facilitate sophisticated analysis. The new office aggregates data from financial regulators and industry to help the Financial Stability Oversight Council anticipate and prevent crises. With oversight responsibility for all financial institutions and more than $50 billion in assets, the council will collect, analyze and share data among agencies, and report to Congress on a regular basis.
The 2010 Patient Protection and Affordable Care Act similarly recognized the need for improved data collection and analytics to control health care costs. This intelligence can aid in identifying the best providers, the best practices and the best systems—and in reducing reduce waste, fraud and abuse. It also can identify health care models that states can tailor to specific markets and their unique needs.
A June 2011 the Medicaid Advisory Committee report to Congress called for increased use of analytics at the Health and Human Services Department to “consolidate or simplify the collection of Medicaid and Children’s Health Insurance Program administrative data from states to both reduce administrative burdens and improve data quality.”
A number of federal offices are conducting ongoing, evidence-based analysis of existing health care models and to develop recommendations for reform. The Patient-Centered Outcomes Research Institute, for example, conducts research to find the best available evidence to help patients and their health care providers make informed decisions. Likewise, the National Prevention, Health Promotion and Public Health Council is taking a holistic approach to patient health by analyzing every piece of the puzzle, from food, housing, education and transportation to workplace and environmental conditions.
Analytics cannot solve the nation’s health care challenges, but it can go a long way to address the billions in wasteful spending.
As Congress continues to debate improvements in elementary and secondary education, many lawmakers have called for more data collection and analysis of performance evaluation models in school districts. Amid heated discussions, there is consensus that the problem is not the amount of education spending, but rather the failure to maximize the effectiveness of those dollars. The solution will require several levels of analysis from measuring student performance and relating it to teacher and principal performance to assessing the efficiency of spending.
A better understanding of how education funds are being spent, as well as analysis of performance and outcomes, could lead to models that could be emulated in school districts nationwide.
All states have built digital warehouses and filled them with academic data for every public school student, collecting enrollment, demographic and curriculum data, as well as high school graduation rates and college readiness test results. Federal officials envision data systems that can track student performance from pre-kindergarten through college. The idea is fairly simple: If analyzed correctly, student test data can tell educators what works in the classroom and what needs to change. It can tell administrators where to invest resources and which educators are effective. And it can help parents better understand how their children are learning.
Doing More With Less
As part of its Campaign to Cut Waste, the Obama administration announced the Government Accountability and Transparency Board in 2011 to make federal spending more accessible and transparent to the American people. Recovery.gov already provides easy access to Recovery Act spending data and enables reporting of waste, fraud and abuse.
In these challenging economic times, government must make better use of limited resources, and intelligence and analytics are absolutely critical. When Billy Beane’s efforts began to pay off, it wasn’t long before sabermetric analysts began cropping up throughout the Major Leagues. Many agencies are already actively engaged in these efforts, and as their programs demonstrate success it won’t be long before the entire government is playing moneyball.
J. C. Boggs, former counsel to the Senate Governmental Affairs Committee, is a partner with the law firm Blank Rome LLP. Kathleen Nahill is an analyst with Blank Rome Government Relations LLC.
February 8, 2012