This document discusses using data to reduce healthcare costs in Chicago. It begins by outlining the objectives of understanding the healthcare cost crisis, useful data elements for costing, and how to link data to reduce costs. It then provides background on rising national health expenditures and population trends driving costs. The rest of the document details challenges in health system data integration and strategies for using integrated clinical and financial data through cost accounting and analytics to understand costs, identify cost drivers, and reduce variation in order to lower healthcare spending.

1. Chicago Technology For Value-Based Healthcare
Driving Data to Cut Healthcare Costs
Omar Husain
Solution Architect, Data Integration
Strata Decision Technology
October 30, 2018

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By the end of this session, participants will understand…
• The cost crisis in American health systems
• The data elements that are useful for costing
• How to tie data elements together to reduce cost
Objectives

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National Health Expenditures (1980 – 2025)

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National Health Expenditures as a % of GDP and Breakdown of
National Health Expenditures(1980– 2060)

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U.S Population Trends and Projections by Age (1980– 2060)

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% of Medicare FFS Beneficiaries vs. % of Spending by Number of
Chronic Conditions (1960– 2014)

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% of FFS Medicare Beneficiaries w/ Chronic Conditions (2015)

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Managed Care Plan Avg. Operating Margins(1998 – 2015)

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Annual Change in Health Insurance Premiums (2000 – 2017)

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Consumer Out-of-Pocket for Health Expenditures (1995 – 2016)

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Announced Hospital Mergers and Acquisitions (2005 – 2017)

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# of Hospitals in Health Systems (2005 – 2016)

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Inpatient Days per 1,000 Persons (1995– 2016)

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Total Hospital Outpatient Visits in Hospitals (1995– 2016)

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Distribution of Outpatient vs. Inpatient Revenues (1995– 2016)

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Number of Full-time and Part-time Hospital Employees (1995– 2016)

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Average Operating Margin by Fiscal Year (2015 – 2017)

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You Must
Scale
You Must Pursue
“Smart Growth”
and Find New
Revenue Streams
You Must
Measure/Manage
Cost and Margins
You Must Become
a Brand
You Must Operate
as a System, Not
Just Call Yourself
One
You Must
Act Small
You Must Engage
Your Physicians
You Must Leverage
Analytics
You Must Protect
Yourself
You Must Manage
Social
Determinants of
Health
You Must Help
Solve the Opioid
Epidemic
You Must Deliver
Value

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Market Problem:
Healthcare providers have little to no access to accurate and actionable information on the
cost of care. According to a recent survey, 90% of healthcare leaders are “flying blind” when it
comes to understanding cost. How can you reduce variation, waste and inefficiency in order
to invest in and improve care if you don’t have any access to data?
Strata’s Solution:
StrataJazz is rated #1 in KLAS for Decision Support and Advanced Cost Accounting and is
known as the “gold standard” for understanding cost and margins and the most sophisticated
Business Intelligence engine in healthcare.
 Cost Accounting
 Contract Analytics
 Episode Analytics
 Advanced Reporting and Analytics
 Strategic Pricing
Financial Decision Support
 Licensed solution

20. Data Integration

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Key Data Elements
• General Ledger
• Payroll
• Charges
• Payments
• Encounter Summary
• Patient Demographics
• Diagnosis Detail
• Procedural Detail

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Additional Data Sets
• Supply Detail
• APC/CPT Detail
• Surgical Times
• Time and Attendance
• Admits, Discharges, and Transfers
• Drive/Visit Times for Homecare

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How Does Data Get Imported?
Files are Placed
on sFTP
Strata Picks Up
File From sFTP
File is Imported
into Separate
Tables in
Database

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Common Issues with Data Integration
• Resource Constraints
• Bad Data Governance
• Inconsistence Code Structures
• Disparate Source Systems
• Overlapping Source Systems
• Bad EHR Systems
• System Overload

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Data… Integrated!
Foundational data validated
Billing data validated
General Ledger to Pre-Costing dollars reconciled
Initial costing results reviewed

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• Department Code
• Ties charges to GL
• Encounter Record Number
• Ties all patient data
Major Keys

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CostingProcess
Align revenue and expenses
Consolidate cost components
and assign variability
Allocate overhead expenses
Distribute costs to patients and
activities
Add topside adjustments and
patient specific costs
Report
Costing Process Overview
DecisionSupport
EHR
GL
Payroll
Integrate Clinical
and Financial Data

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Processing All This Data
• Employ an analysis services cube to process all data and relationships on
a nightly basis
• Can pull a report tying any data elements you wish in seconds
• Processes all cost calculations nightly so that results can be viewed in
seconds

29. Latest and Greatest

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Clinicians are either
unaware of or
disengaged/
unmotivated when it
comes to the cost
implications of their
behaviors
Utilize dashboards to
communicate using the
metrics/data clinicians
are familiar with first
(volumes, root causes,
etc.), financial impacts
second
T HE PROBLEM T HE PLA Y(S)
Publish Dashboards to Communicate Effectiveness of Cost
Savings Initiatives with Both Financial and Clinical Data

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The Payoff
• Clinical buy-in
• Committed, sustained
behavior change
• Lower practice variability
• Cost savings w/out
sacrificing quality or
clinical outcomes

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Deploy Time-Driven Costing (Surgery)
Time is the most
significant cost driver
and source of
variation. Current
methodologies don’t
enable true labor cost
variation and analysis
• Integrate
timestamp and
resource data from
EHRs + other
ancillary systems
• Create a patient-
specific cost driver
TH E P ROBLEM TH E P LA Y (S)

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TDC™
Time-Driven Costing
Deploy Time-Driven Costing
TDC
Surgery
Anesthesia
Physician
Clinic
ED
Nursing
Imaging
TD-ABC
1. Integrate
RFID/EHR Data
2. Align to
current cost
structure and
deploy TDC
3. Calculate costs
and identify
variation
4. Compare
capacity and
operational
issues

34. Questions and Discussion