Master Data vs. Reference Data: A Healthcare Perspective

Industry experts predict rapid growth for healthcare data management and data analytics tools over the next few years. According to current estimates, the value of the global big data in the healthcare technology market will expand from $20.27 billion in Q4 of 2022 to $44.53 billion by 2026 – a compound annual growth rate of 21.75%. 

Healthcare organizations in the market for data management solutions need to understand how different kinds of data – i.e., master data vs. reference – align with their specific data management goals.

To benefit from data analytics capacity to improve patient care, reduce operational costs, and communicate insights, health organizations must first catalog and integrate the necessary raw data from contributing sources – such as electronic health records (EHRs), providers, insurers, and labs. This requires the implementation of a capable data management platform. Nevertheless, processed data vary widely in format, content, and intended use.

In this guide, you’ll learn what master and reference data are and how each relates to healthcare data management.

Key Takeaways:

• As the demand for data management grows in the healthcare industry, organizations must become familiar with different kinds of raw and processed data.
• Master data refers to the core data entities involved in an organization’s regular operations.
• Reference data is a subset of master data that organizations draw from standards and external sources.
  
  

What is Master Data?

Master data refers to the unique set of information fields – also called domains – that describe an organization’s core internal categories. An organization’s master data comes from multiple contributing locations, such as the distinct applications and databases different departments use in their day-to-day operations. However, master data domains are consistent and uniform across complex systems.

To better understand master data, it helps to compare it in context with other kinds of data involved in common business operations. For example, a typical business transaction generates at least three kinds of data:

• Transactional data: Consists of data about unique transactions or events
• Master data: Describes the domains or entities necessary for any transactions or events to take place
• Analytical data: Results from analytical tasks performed on transactional data

To clarify, consider the information you would find in an order confirmation email:

• Customer’s Name: John Smith
• Account ID: 12345678
• Product Purchased: Model-A widget
• Product quantity: 3
• Product price: $19.99
• Date and time of purchase: 01/17/2023 – 12:00 CST

In this scenario, product quantity, product price, and the date and time of the purchase are transactional data. Customer and product names, IDs, and other unique identifiers are instances of master data. If you performed any kind of calculations with the data in this receipt – such as monthly sales totals for model-A widgets – the results would be examples of analytical data.

Kinds and Sources of Master Data

While the domains that make up an organization’s master data are unique and depend largely on industry and organization type, certain core types exist in nearly all businesses. These include:

• Employees
• Departments
• Customers
• Products, services, and abstract entities such as contracts, warranties, and policies
• Locations and facilities

In organizations with different departments, master data overlaps in multiple locations such as sales, marketing, or human resources. The aggregation and coordination of master data from all contributing sources constitutes master data management.

Master Data in Healthcare

As a unique kind of regulated industry, healthcare involves its own kinds of master data. Shared master data domains for organizations such as hospitals, private practices, clinics, and labs include:

• Patients
• Providers
• Insurers
• Claims
• Registries

As with businesses generally, overlapping instances of these varieties of healthcare master data reside in multiple IT systems and require master data management tools and practices to smooth out inconsistencies.

What is Reference Data?

Reference data constitutes a subset of master data that enables data classification and consistent association throughout an organization. Master data domains are identifiers such as names, addresses, and account numbers. Reference data defines the characteristics identifiers must possess. As such, an organization’s reference data categories may come from internal policy or external standards. 

To understand how reference data classifies other kinds of master data, consider some of the information contained on an identification document such as a driver’s license.

• Driver’s license number
• Date of birth
• Class
• Name
• Eye color

In this example, the license number is master data, but any regional indicators in the sequence of numbers would be reference data. Dates of birth encode reference data in the available range of months, days, and years you would find in a drop menu when submitting a form. In this case, months from 1-12, no day values above 31, and minimum year values.

For categories such as class, specific designations such as C are master data in relation to the driver’s identity but are reference data for the permissions and restrictions defined for different classes. Even entries such as name and eye color implicitly involve reference data in the acceptable character types for names – i.e., no numbers – and recognized eye colors such as brown but not purple.

Kinds of Reference Data

Common examples of reference data that occur in most kinds of business include:

• Currencies
• State or country codes
• Postal codes
• Units of measurement
• Calendar dates

Reference Data in Healthcare

In healthcare, internal reference data involves an organization’s private or proprietary master data classifications in categories similar to those businesses generally use. However, with regard to external standards, healthcare organizations use vast amounts of regulated reference data to ensure consistent communication and patient safety.

For example, National Drug Codes for identifying medications or formatting standards for lab results guarantee that master data means the same thing in information exchange between separate entities such as care providers and pharmacies.

Healthcare Master Data Management with Coperor by Gaine

Coperor provides healthcare organizations with a comprehensive master data management platform designed for the unique requirement of the healthcare industry. With built-in features for managing provider networks and compliance regulations, Coperor enables ecosystem-wide availability for master and reference data in real time.

Contact Gaine today to learn more about what Coperor can do for you.