Hospitals and Health Systems Unlock Market Intelligence & Competitive Advantage by Combining Internal Claims and External Claims Datasets

To stay ahead in today’s healthcare landscape, strategy teams need a complete, data-driven view of market trends, patient movement, payer dynamics, and provider performance. While external claims data has long been the standard for market intelligence, it only tells part of the story. Integrating external claims with your internal claims data creates a more powerful, strategic asset that can drive informed decision-making aIntelligence &cross growth, payer negotiations, and competitive positioning.

Yet, many hospitals struggle to access and standardize their own internal claims data, making it difficult to merge with external datasets for a unified analysis. By working with the right technology partners, health systems can unlock the full value of their claims data and use it to drive smarter strategic decisions.

Why Integrating Internal & External Claims Data Matters

While external claims data provides insights into market share, patient leakage, and payer trends, it lacks the depth and specificity provided by combining internal and external claims data. Combining internal patient data with external market intelligence gives hospitals a clearer picture of:

• Market Share & Patient Volumes – See how your hospital ranks against competitors for key service lines.
• Patient Retention & Leakage – Identify where patients go when they leave your network and develop strategies to keep them in-system.
• Physician Referral Patterns – Track provider loyalty and identify where referrals are being lost to competitors.
• Payer Contract Negotiations – Benchmark reimbursement rates and optimize payer relationships.
• Service Line Growth & Resource Allocation – Identify high-growth specialties and optimize facility investments.

By integrating internal and external data, health system leaders gain a strategic advantage, allowing them to proactively adapt to shifting market dynamics.

The Role of Data Intelligence Processing

Before internal and external claims data can be fully leveraged, it must be cleaned, structured, and standardized—a process that can be resource-intensive and time-consuming if done manually. Kythera assists health systems integrate claims by automating data transformation, streamlining data ingestion, aggregation, and delivery, thereby eliminating inefficiencies and improving data usability. When combining internal and external claims, it is critical to ensure compliance and data security. De-identification is necessary for HIPAA and privacy regulation compliance, but many health systems lack the in-house expertise or technology to do this at scale. Finally, linking claims data sets, using advanced anonymization techniques like tokenization, can uncover strategic insights on patient movement, referral trends, and competitive positioning.

By automating these processes, strategy teams can unlock the full value of claims data without the burden of manual processing and lengthy processes.

Use Cases for Integrating External and Internal Claims

1. Enhance Market Intelligence & Competitive Benchmarking

Problem: External claims alone don’t provide enough visibility into a hospital’s network performance.
Solution: By integrating external and internal data, hospitals can benchmark themselves against competitors, track payer mix trends, and analyze provider referral behavior.

• Compare patient volumes across facilities to assess market share.
• Analyze shifts in referral patterns and payer mix changes.
•  Identify competitive threats and opportunities for service line growth.

Use Case & Outcomes: A health system merges external claims with internal patient data to more accurately track declining market share in cardiology services. Insights from the data direct investment into physician outreach and service line expansion to regain lost market share.

2. Identify & Reduce Patient Leakage

Problem: External claims show where patients receive care in a region, but they don’t track where in-network patients go after they leave the system.
Solution: By linking internal claims with external data, hospitals can pinpoint patient movement patterns and address leakage issues.

• Identify which hospitals, specialists, and outpatient centers attract your patients.
• Analyze service lines with high leakage and determine underlying causes (cost, access, availability).
• Strengthen referral networks to keep patients in-system.

Use Case & Outcomes: A hospital discovers that 20% of post-discharge cardiology patients are getting follow-up care at a competing facility. With this insight, the system expands in-network cardiology partnerships to reduce out-of-network referrals.

3. Strengthen Payer Contract Negotiations

Problem: Hospitals often lack visibility into market pricing and payer reimbursement trends, making it difficult to negotiate competitive rates.
Solution: By integrating internal and external claims, hospitals can benchmark their reimbursement rates, analyze payer trends, and negotiate better contracts.

• Compare reimbursement rates across competing hospitals.
• Identify inefficiencies in payer contracts, including high denial rates.
• Justify value-based payment arrangements with competitive data.

Use Case & Outcomes: A health system uses market claims data to discover that their reimbursement rates for orthopedic procedures are lower than those of competing hospitals. Armed with this insight, they renegotiate contracts to secure higher reimbursement rates.

4. Optimize Service Line Expansion & Resource Allocation

Problem: Hospitals need data-driven insights to decide where to expand service lines, invest in facilities, or recruit specialists.
Solution: Integrating internal and external data enables hospitals to analyze patient demand, competitor activity, and referral trends to guide service line expansion.

• Identify growing service lines and regional demand trends.
• Analyze patient migration to determine the best locations for new outpatient facilities.
• Track competitor service line performance to uncover growth opportunities.

Use Case & Outcomes: A hospital analyzes internal and external claims data to identify a growing demand for GI procedures in a neighboring region where there are no competing facilities. They opened a new GI center, increasing market share and driving revenue growth.

5. Strengthen Physician Referral Network & Provider Alignment

Problem: Hospitals often lack full visibility into where their providers refer patients—leading to out-of-network losses.
Solution: By integrating claims datasets, hospitals can track referral behaviors, strengthen provider relationships, and optimize physician recruitment strategies.

• Identify which providers are referring patients out of network and why.
• Engage high-value referring physicians to retain patient volume.
• Improve physician alignment to boost in-network referrals.

Use Case & Outcomes: A hospital discovers that a key referring provider group is sending 40% of patients to a competitor’s oncology program. With this insight, they strengthen provider relationships, improve service offerings, and realign referral strategies.

 6. Enhance Data Value by Enabling Longitudinal Patient Tracking

Problem: While internal claims data provide insights on in-network services, without external claims, the visibility into where patients went for follow-up care, specialty treatments, or emergency visits at competing facilities is lacking.
Solution: Combining external and internal claims affords greater clarity and a more comprehensive view of the patient journey.

• Track post-discharge patient movement, identifying where patients received follow-up care.
• Pinpoint leakage trends at competing hospitals and facilities.
• Strengthen provider relationships, adjusting referral workflows to redirect more patients to in-network specialists.
• Improve care coordination, ensuring patients receive timely follow-ups and reduce readmission rates.

Use Case & Outcomes: A hospital that integrated internal claims data with external claims datasets tracked patient movements across multiple healthcare settings, payers, and provider networks. They were able to reduce patient leakage, increase revenue from re-directed referrals, and capture unmet need.

The Business Case for Claims Data Integration

By combining internal and external claims data, hospitals gain a powerful competitive advantage across multiple areas of their business.

For CFOs:

• Benchmark reimbursement rates against competitors to optimize payer negotiations.
• Identify high-revenue service lines where competitors are gaining market share.
• Improve investment strategies for long-term revenue growth.

For Marketing & Strategy Teams:

• Track referral patterns to optimize physician engagement.
• Use competitive intelligence to refine service line marketing strategies.
• Align patient engagement efforts with real-world data on service demand trends.

For Business Development Teams:

• Expand high-growth, profitable service lines.
• Optimize facility investments based on patient migration data.
•  Strengthen provider networks and referral pathways.

Final Thoughts: Turning Claims Data Into Strategic Intelligence

Hospitals and health systems that integrate internal and external claims data gain a clear competitive advantage by strengthening:

• Market Intelligence – Benchmark performance and stay ahead of competitors.
• Patient Retention & Leakage Reduction – Keep more patients in-network.
• Payer Negotiations – Secure better reimbursement rates with data-driven insights.
• Service Line Growth – Expand strategically based on regional demand.
• Physician Alignment – Optimize provider engagement and referral management.

If your health system is looking to maximize the value of your internal claims data while leveraging external market insights, Kythera Labs provides the technology, expertise, and analyst-ready claims datasets to help you get there. If you’d like to learn more about how Kythera Labs can help you get the most value from combining your internal claims data with our large analyst-ready claims datasets, get in touch or reach out at LinkedIn.