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Developing
a Hospital Business Intelligence (BI) Strategy
in a Value-Based Services World
Steven Berger, FACHE, FHFMA, CPA...
Speaker Profile – Steven Berger
Steven Berger is Chairman of Healthcare Insights, LLC, which specializes in the teaching a...
Session Overview
• The Healthcare Financial Management Association (HFMA), in its Value Project, has identified
Business I...
Developing a Successful BI Strategy Class –
Outline and Goals
• Outline
• Where can we find value in healthcare? HFMA Valu...
Value Overview
• Value is driving a fundamental reorientation of the healthcare system around the quality and
cost-effecti...
How Should Providers Respond to the
Demand for Value?
• In interviews with leading provider organizations across the count...
HFMA Identified Future Care Delivery Models
2012 Capability Grid – Post PPACA
HFMA’s Value Project Value in Health Care:
C...
Dictionary Definition:
Business Intelligence
• The methods and technologies that gather, store, report, and analyze
busine...
Business Intelligence Uses
• Information-savvy and data-savvy providers are using business intelligence tools and techniqu...
So…
What is BI Strategy…
And How Can We Adopt and Utilize It?
10
What Can a Hospital Expect to Achieve With a
Successful BI Strategy?
• If the hospital proceeds to execute a successful BI...
Building Value-Driving Capabilities:
Business Intelligence – Introduction
• Healthcare providers are on the verge of a tra...
• To drive value, healthcare organizations will need to use business intelligence to:
• Develop a business intelligence st...
Building Value-Driving Capabilities:
Business Intelligence – Making Information Actionable
• HFMA’s January 2011 survey on...
Creating a Data Strategy
• Agreeing on metrics.
• Some metrics will be prescribed by government and private purchasers as ...
Clinical / Financial Scorecard
Source: INSIGHTS Scorecard Software, www.hcillc.com
16
Clinical / Financial Scorecard
17
Source: INSIGHTS Scorecard Software, www.hcillc.com
Each indicator is given a numeric and descriptive score
Score Numeric Score
• Excellent (<10th percentile) 5
• Good (10-25...
• Aligning Metrics with Organizational Goals
• Internal dashboards should create clear lines of sight between organization...
Dashboard Design
Source: INSIGHTS Dashboard Software, www.hcillc.com
20
Select metrics that align with the organizational ...
Financial Dashboard Drilldowns
Source: INSIGHTS Dashboard Software, www.hcillc.com
21
• Timeliness of Data
• For data to be actionable, it must be put in the hands of decision makers in time for them to take ...
Creating a Data Strategy –
Conclusion
• An organization’s ability to deliver timely data will be driven largely by
the deg...
Business Intelligence Strategic Objectives
• Hospitals should be constantly rethinking their BI objectives
• Assume that i...
Principles of Values-Based Healthcare Delivery
• Prevention of illness
• Early detection
• Right diagnosis
• Right treatme...
Business Intelligence and Strategic Planning
• So, the real question is,
• How do we use BI to move from volume to value a...
10 Components of a
Successful Hospital BI Strategy Plan – Checklist
1. Define BI for your hospital
A. Just reporting, anal...
1. Define BI For Your Hospital
• In your hospital, do you want BI to be:
• Reporting, analytics and dashboards of clinical...
2. What to Do When You Decide If BI is Just
Reporting…Or Much More!
• If the decide that BI is just reporting and monitori...
Getting Started With A BI Culture
• The business intelligence pioneers profiled in this article share other lessons they h...
3. Ensure Senior Leadership Commitment
• If Senior Leadership commitment cannot be obtained, STOP!
• It will not do any go...
4. Establish High Level Governance Offices and
Roles in the Organization
• Establish a hierarchy charged with successfully...
5. Document the Current State of Your BI
Environment
• Using individuals and systems from the governance offices, determin...
6. Envision and Propose a Target State for
the BI Environment
• BI Information Technology architecture
• Technical
• Secur...
7. Identify Gaps Between Current and Target State
• As in traditional strategic plan gap analysis, the hospital organizati...
Organizational Assessment
• Just as providers who deliver care directly need to assess the financial implications of clini...
Gap Analysis -
Where Are You, Where Do You Want To Be
• We need to begin by determining what capabilities exist at your
ho...
BI Competencies and Capabilities -
Job Description
BI levels
1. Reporting – data pull
2. Analysis and tracking
3. Consulti...
Business Intelligence Checklist
Fill Out Back At Your Desk Business Intelligence Capabilities Checklist
Your Your Desired
...
Take Away –
BI Request Checklist
Required Questions to be Asked Outcome That Can be
Produced
Benefits That Can Be Derived
...
8. Build a Multi-Vendor/Technology Shortlist,
Based on Target State Requirements and the Gaps That
Need to Be Closed
• Det...
9. Create Action Plans to Close the Gaps
• Design a road map to close the gaps and achieve the target state with:
• A clea...
10. Select Software Vendors and System Integrators,
If Necessary
• Despite enormous advances in information systems, the p...
Selecting a Business Intelligence System
in the Modern World – Check List
1.Develop a Top 10 features list
2.Issue a Reque...
Focusing on BI Analytics is A Key
to the Future of Healthcare Finance
• We know that analytics focus on
• improving operat...
What Finance Executives Should Do
• What should healthcare finance executives be doing to lead in determining their organi...
Deploying the BI Strategy –
What BI Tools Are Currently Available?
• Clinical / Financial Reporting
• Scorecard
• Dashboar...
Meanwhile, Numerous New Payment Methodologies
Require the Use of Clinical / Financial Reporting
• A successful provider or...
Clinical / Financial Integrated Reporting
Simple Pneumonia
BI Tools –
Clinical/Financial
Reporting
Source: INSIGHTS Enterp...
Clinical / Financial Integrated Reporting
Major Joint Replacement - Hips
BI Tools –
Clinical/Financial
Reporting
Source: I...
Profitability Analysis –
Top 10 Service Lines Based on Cases
BI Tools –
Service Line
Reporting
Source: INSIGHTS Enterprise...
Profitability Analysis –
Pulmonary Service Line – DRG Profile
BI Tools –
Service Line
Reporting
Source: INSIGHTS Enterpris...
Profitability by Physician –
DRG 193 – Simple Pneumonia
BI Tools –
Service Line
Reporting
Source: INSIGHTS Enterprise Edit...
Cost Accounting Analytics –
Cost Variance Analysis to the Mean
Cost Reduction Increase in Quality
 $872 – Cost Reduction ...
Cost Accounting Analytics –
Cost Variance Analysis to Best Practice
Cost Reduction Increase in Quality
 $2,251 – Cost Red...
Overtime Earnings Codes –
Efficiency and Rate Variances
Overtime Earnings Code - Efficiency and Rate Variances
OPERATING R...
Take Away Checklist–
BI Request Checklist
Required Questions to be Asked What Can You Do With
These Outcomes?
What Benefit...
Detailed Pay Period Analysis –
Overtime Dollar Amounts and Paid Hours
Total $7,170 .00 179.00
BI Tools –
Labor Management
...
Overtime Actual Trend (to Budget) Analysis
0
0.05
0.1
0.15
0.2
0.25
0.3
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Automated Email Alerts for
Out-of-Compliance Conditions
• In a Low Hanging Fruit environment, department managers and thei...
Class Survey
• Do you have a BI strategic plan?
• If so, does it include many/most of the plan steps described in the clas...
Action Items
• Make sure that you have a BI system, with essential skills, that allows the hospital
to understand:
• Cost ...
Conclusions
• Operating a hospital is tough!
• In the new era of the ACA, moving from volume based leadership to value bas...
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Developing a Hospital Business Intelligence Strategy

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Healthcare Insights - Stephen Berger (Chairman)

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Developing a Hospital Business Intelligence Strategy

  1. 1. Developing a Hospital Business Intelligence (BI) Strategy in a Value-Based Services World Steven Berger, FACHE, FHFMA, CPA Chairman Healthcare Insights 510 Roosevelt Drive Libertyville, IL 60048 847 – 772 – 9200 E-mail: sberger@hcillc.com Website: www.hcillc.com http://hcillc.com/community - blog 1
  2. 2. Speaker Profile – Steven Berger Steven Berger is Chairman of Healthcare Insights, LLC, which specializes in the teaching and consulting of healthcare financial management issues. In addition, Healthcare Insights has developed INSIGHTS, a management accountability and decision support software solution for the healthcare industry. Prior to his role at Healthcare Insights, Mr. Berger was Vice President, Finance for seven years at 250- bed Highland Park Hospital in suburban Chicago, Illinois. Before Highland Park Hospital and since 1978, he has been a hospital or health system finance officer in New York, New Jersey and Missouri. Mr. Berger has 40 years of healthcare financial management experience. He holds a Bachelors of Science degree in History and a Master of Science in Accounting from the State University of New York at Binghamton. He is a CPA, a Fellow of the Healthcare Financial Management Association (FHFMA) where he has served as President of the First Illinois Chapter. Mr. Berger also served a three-year term on the HFMA’s National Board of Examiners and served as the Regional Executive of Region 7 of the HFMA. He is also a Fellow of the American College of Healthcare Executives (FACHE). In addition, over the past several years he has presented many healthcare finance related seminars throughout the United States and Canada including several two-day classes such as Fundamentals of Healthcare Financial Management, Advanced Topics in Healthcare Financial Management, Turning Data into Useful Information and Hospital Financial Management for the Non-Financial Manager. He has also written articles on healthcare information systems that were published in Healthcare Financial Management magazine, including a February 2007 Award – winning article on Treating Technology as a Luxury – Ten Necessary Tools, August 2004 Award – winning article on the Ten Ways to Improve Cost Management in Hospital, an April 2002 management column and a February 2000 commentary in Modern Healthcare on the lack of training in the healthcare industry His most HFM article was published in August 2012, titled, Back to the Basics: 5 Ways to Pick Low-Hanging Fruit. Additionally, Mr. Berger is the author of “Fundamentals of Healthcare Financial Management,” originally published in 1999 by McGraw-Hill and the Healthcare Financial Management Association. This book was written from a practitioners point of view and is a distillation of Mr. Berger’s many years on the inside of healthcare institutions. The fourth edition of the book was published in July 2014 and is available at www.josseybass.com . Additionally, Mr. Berger’s 2008 book, “Understanding Nonprofit Financial Statements, Third Edition”, was published by BoardSource and is available at www.boardsource.org His book, “The Power of Financial and Clinical Metrics: Achieving Superior Results in Your Hospital” was published in March 2005, by Health Administration Press, and is available at www.ache.org. 2
  3. 3. Session Overview • The Healthcare Financial Management Association (HFMA), in its Value Project, has identified Business Intelligence (BI) as one of four major new capabilities that organizations should develop to prepare for a value-based healthcare system as defined by the current and future PPACA. • The HFMA defines BI as the ability to collect, analyze, and connect accurate quality and financial data to support organizational decision making. • Many hospitals have initiated attempts at developing a BI program. • Some have not. • This session will • Highlight key BI concepts and tools that enable organizations to create a successful hospital BI plan, and • Conduct an organizational assessment that will enable the hospital to use business intelligence effectively. 3
  4. 4. Developing a Successful BI Strategy Class – Outline and Goals • Outline • Where can we find value in healthcare? HFMA Value Project – Phase 1 • How do we use BI to move from volume to value and create a data strategy? • What are 10 components of a successful hospital BI strategy plan? • What is the current state of healthcare value in healthcare regarding BI? • What are essential BI skills in healthcare? • What are the major BI tools that can be deployed to significantly improve hospital financial and clinical outcomes? • Goals • To describe specific elements of the HFMA’s Value Project as they relate to BI • To discuss the elements of a BI strategic plan, and • To recognize the BI tools that can be deployed to significantly improve outcomes 4
  5. 5. Value Overview • Value is driving a fundamental reorientation of the healthcare system around the quality and cost-effectiveness of care. • As in any industry, value in health care is defined through the relationship of two factors: the quality of care and the price paid for it. • Increasingly, key stakeholders—including government payers, commercial health plans, employers, and patients—expect to know the value of the healthcare services they are purchasing. • They are seeking out providers who will give them this information and follow through with cost effective care. • In other words, they (the key stakeholders) expect to receive value. 5
  6. 6. How Should Providers Respond to the Demand for Value? • In interviews with leading provider organizations across the country and surveys of the field, HFMA has identified four capabilities that organizations should develop to prepare for a value-based healthcare system. These include: • People and culture: The ability to instill a culture of collaboration, creativity, and accountability • Business intelligence: The ability to collect, analyze, and connect accurate quality and financial data to support organizational decision making • Performance improvement: The ability to use data to reduce variability in clinical processes and improve the delivery, cost-effectiveness, and outcomes of care • Contract and risk management: The ability to develop and manage effective care networks and predict and manage different forms of patient-related risk 6
  7. 7. HFMA Identified Future Care Delivery Models 2012 Capability Grid – Post PPACA HFMA’s Value Project Value in Health Care: Current State and Future Directions Phase 1. page 29, Reprinted with Permission of HFMA 7
  8. 8. Dictionary Definition: Business Intelligence • The methods and technologies that gather, store, report, and analyze business data to help people make business decisions* • So, instead of • Gather • Store • Report • Analyze • How about, • Gather • Store • Monitor • Analyze • Report • Take action 8 *http://dictionary.reference.com/browse/business+intelligence?s=t
  9. 9. Business Intelligence Uses • Information-savvy and data-savvy providers are using business intelligence tools and techniques to • Improve care at the bedside, • Coach physicians to use resources more wisely, • Manage populations of patients, and • Improve financial performance • BI information can allow providers to • Combine data from a myriad of sources, • Analyze it to inform specific processes, and • Present it in easy-to-understand formats, • Results include • Improved efficiency, • Lowered costs, and • Saved lives 9
  10. 10. So… What is BI Strategy… And How Can We Adopt and Utilize It? 10
  11. 11. What Can a Hospital Expect to Achieve With a Successful BI Strategy? • If the hospital proceeds to execute a successful BI strategy, there will be a delivery of value to their stakeholders, specifically to: • Patients • Physicians • Payers • This value will be in the form of high-level quality which greatly exceeds its cost • To recognize that the value has been achieved, the healthcare organization needs to develop and deploy the most effective and efficient tools and techniques 11
  12. 12. Building Value-Driving Capabilities: Business Intelligence – Introduction • Healthcare providers are on the verge of a transformation in the field of business intelligence. • As providers work to implement and achieve meaningful use of electronic health records (EHRs), they are gaining access to new levels of clinical data, the accuracy of which will be heightened by the switch to ICD-10. • Meanwhile, the prospect of new forms of payment—including episode-based payment bundles, shared savings programs, and capitated payment models—is exposing the limitations of traditional cost accounting methods. • This has prompted providers to consider costing systems that can provide greater levels of detail regarding the costs related to specific services, processes, and physicians. • For example, the ability to “drill down” into the costs associated with • bundled services, • specific patient groups, or • practice patterns • can help decision makers better understand variation and costs related to variation—and make changes that will improve value. • As healthcare organizations gain access to more and better data, their need for business intelligence—the ability to convert data into actionable information for decision making—is growing. 12 HFMA’S Value Project: Building Value-Driving Capabilities: Business Intelligence, January 2012, Reprinted with Permission
  13. 13. • To drive value, healthcare organizations will need to use business intelligence to: • Develop a business intelligence strategy focused on converting financial and clinical data into actionable, accessible information that clearly supports an organization’s strategic goals and decision making • Accurately capture and quantify the costs of providing services and the costs and benefits associated with efforts to improve quality of care • Develop business cases that prioritize and reliably quantify expected clinical outcomes, financial impacts, resource needs, and “go/no go” points of value improvement projects • Although business intelligence is still in its adolescence at many healthcare organizations, organizations should begin to develop value with the data and resources available to them now, rather than wait to improve value until they have implemented systems capable of providing more refined business intelligence, organizations interviewed by HFMA’s Value Project agree. • As Kevin Brennan, CFO of Geisinger Health System in Danville, Pa., notes, “The tools we have available to us are sufficient to the task. We just have to redeploy them in a manner that supports value.” Building Value-Driving Capabilities: Business Intelligence – Introduction HFMA’S Value Project: Building Value-Driving Capabilities: Business Intelligence, January 2012, Reprinted with Permission 13
  14. 14. Building Value-Driving Capabilities: Business Intelligence – Making Information Actionable • HFMA’s January 2011 survey on the current state of value indicated that, while many organizations have begun collecting data in such areas as costs of adverse events, financial implications of readmissions, and the financial effects of waste in care processes, few organizations are using the data they collected as a basis for action. A significant number of respondents also indicated that they are not yet actively measuring these costs. Although these numbers may have improved over the past months as the Medicare value-based purchasing program draws closer to implementation, the findings of this survey indicate that many organizations have much room for improvement in both collecting the data needed to measure quality and cost outcomes and making that data actionable. • To move from a data-collecting organization to a data-driven organization, providers should: • Create an enterprise-wide data strategy to ensure the accurate and consistent calculation and reporting of data across the organization • Establish clear lines of sight from individual metrics for departments and staff to organization-wide goals and executive dashboards • Make information available to inform the decision making of front line staff in as close to “real time” as possible, optimizing the possibility for interventions that can avoid adverse events or waste and improve results • Creating a Data Strategy • For information to be actionable, it must be credible. And the credibility of information depends on several factors. • First, all interested stakeholders must agree that what needs to be measured is being measured. • Second, there must be assurance that metrics are being recorded and reported consistently—and, if more than one department is measuring the same item, that each is doing it in the same way. • Third, information needs context for meaning. 14 HFMA’S Value Project: Building Value-Driving Capabilities: Business Intelligence, January 2012, Reprinted with Permission
  15. 15. Creating a Data Strategy • Agreeing on metrics. • Some metrics will be prescribed by government and private purchasers as a condition of reimbursement. In other instances, organizations will want to define and track their own metrics to gauge the success of an initiative or assess the quality or cost of care. In all cases, it is important that both finance and clinicians understand and agree upon the metrics that should be tracked, where and how the information should be collected, and how the data should be calculated and reviewed. • Consistent reporting. • Value initiatives may require tracking the same metric across different departments or, in the case of a system, across different facilities. Organizations must ensure that information is being collected and reported consistently if that information is to be credible, comparable, and, ultimately, actionable. • Providing context. • Simply reporting data on quality and cost outcomes is insufficient. Data should be presented within the context of a dashboard or scorecard that defines clear performance goals and clearly illustrates progress toward those goals. Users should be able to understand the significance of the data within the context of both internal and external performance benchmarks and use the data to identify areas most in need of improvement and areas where goals have been met or are being maintained HFMA’S Value Project: Building Value-Driving Capabilities: Business Intelligence, January 2012, Reprinted with Permission 15
  16. 16. Clinical / Financial Scorecard Source: INSIGHTS Scorecard Software, www.hcillc.com 16
  17. 17. Clinical / Financial Scorecard 17 Source: INSIGHTS Scorecard Software, www.hcillc.com
  18. 18. Each indicator is given a numeric and descriptive score Score Numeric Score • Excellent (<10th percentile) 5 • Good (10-25th percentile) 4 • Satisfactory (25-50th percentile) 3 • Needs Improvement (50-75th percentile) 2 • Poor (75-90th percentile) 1 • Unsatisfactory (90th + percentile) 0 % score is calculated by summing numeric score and dividing by total possible score Balanced Scorecard Scoring Source: INSIGHTS Scorecard Software, www.hcillc.com 18
  19. 19. • Aligning Metrics with Organizational Goals • Internal dashboards should create clear lines of sight between organization-wide goals and the efforts of individual departments and staff. Many hospitals and health systems interviewed for the Value Project noted the problem of “data overload” within their organization: • Too many targets and metrics are being tracked without a clear sense of their significance to the organization. An effective strategy to counter data overload is to define a clear—and concise—set of strategic goals for the organization. Improvement initiatives, and the metrics and data collected to measure progress on them, can then be prioritized according to their alignment with one or more of the organization’s goals. Dashboard metrics—from the system level to the individual—should then be aligned beneath organizational goals so that everyone within the organization can understand how their performance on metrics furthers the organization’s goals. Creating a Data Strategy HFMA’S Value Project: Building Value-Driving Capabilities: Business Intelligence, January 2012, Reprinted with Permission 19
  20. 20. Dashboard Design Source: INSIGHTS Dashboard Software, www.hcillc.com 20 Select metrics that align with the organizational goals
  21. 21. Financial Dashboard Drilldowns Source: INSIGHTS Dashboard Software, www.hcillc.com 21
  22. 22. • Timeliness of Data • For data to be actionable, it must be put in the hands of decision makers in time for them to take action on it. Different data have different life spans. • For quality measures — especially those affecting patient safety and clinical outcomes—an organization’s ultimate goal should be to make reporting as close to “real time” as possible. At Geisinger, which has an advanced, integrated electronic health record in place, evidence-based practices and treatment protocols for various procedures and conditions are embedded within the system. The system’s monitoring and tracking capabilities allow section leaders to identify noncompliance within a day, often allowing corrective action while a patient is still in the hospital. • For example, after 40 separate criteria for coronary artery bypass graft (CABG) procedures were embedded within the system, compliance with all 40 criteria increased from 59 percent to 99 percent, infection rates declined by 21 percent, and readmissions fell by 44 percent. • (This is a fantastic result – and a primary outcome of a very good BI system – SB) • Data on costs need not be supplied on a daily basis, but quarterly or annual cost reports are not sufficient, especially in high-volume areas where wide variations in physician preference items can quickly drive overall costs up or down. • Section leaders need to be able to regularly monitor trends in the cost of supplies and labor on at least a monthly—if not weekly—basis. • To the extent that healthcare organizations are exposed to financial risk through a bundled or capitated payment model, the need for more timely cost reports will intensify. Creating a Data Strategy HFMA’S Value Project: Building Value-Driving Capabilities: Business Intelligence, January 2012, Reprinted with Permission 22
  23. 23. Creating a Data Strategy – Conclusion • An organization’s ability to deliver timely data will be driven largely by the degree to which data collection and analysis can be automated. • As healthcare organizations work to implement electronic health records and healthcare IT systems, the ability to deploy these systems to drive timely reporting of quality and cost data should be a priority from both a clinical and financial perspective. 23 HFMA’S Value Project: Building Value-Driving Capabilities: Business Intelligence, January 2012, Reprinted with Permission
  24. 24. Business Intelligence Strategic Objectives • Hospitals should be constantly rethinking their BI objectives • Assume that initial BI goals and objectives may have been some operational improvement areas built around labor management or supply chain management • It may also have had some applicability towards improvement throughput in some areas that are: • High variability • Clinical costs • Outcomes • High cost • High volume • High revenue • High defects • Low satisfaction • A long-term BI strategic objective should: • Resolve to keep improving in those areas cited above, and • Continue to use BI concepts to standardize around Key Performance Indicators (KPIs) 24
  25. 25. Principles of Values-Based Healthcare Delivery • Prevention of illness • Early detection • Right diagnosis • Right treatment to the right patient • Rapid cycle time of diagnosis and treatment • Treatment earlier in the causal chain of disease • Less invasive treatment methods • Fewer complications • Fewer mistakes and repeats in treatment • Faster recovery • More complete recovery • Greater functionality and less need for long term care • Fewer recurrences, relapses, flare ups, or acute episodes • Reduced need for ER visits • Slower disease progression • Less care induced illness Quality improvement is the most powerful driver of cost containment and value improvement, where quality is health outcomes Better health is the goal, not more treatment Better health is inherently less expensive than poor health Value-Based Health Care Delivery Professor Michael E. Porter Harvard Business School www.isc.hbs.edu HBS Health Industry Alumni Conference October 18, 2012 25
  26. 26. Business Intelligence and Strategic Planning • So, the real question is, • How do we use BI to move from volume to value and create a data strategy • Hospital organizations need to make a commitment to BI if they want it to be successful • They are a variety of ways that hospital leadership can ensure a successful BI plan if they first develop a strategic plan • The next two subsections of this class will delve into hospital strategic plans in the following manner: • Ten components of a successful hospital BI Plan and, • Selecting a BI system in the modern world 26
  27. 27. 10 Components of a Successful Hospital BI Strategy Plan – Checklist 1. Define BI for your hospital A. Just reporting, analytics and dashboards? B. All of the technical elements, as well? 2. Based on answers in the first component: A. If just reporting, you need to define linkages, dependencies, overlaps and integration with all of the latter B. If the latter, then significant technical materials will be needed to be incorporated in the plan, as well 3. Ensure senior business executive commitment and top down mandate. 4. Establish high-level governance offices and roles in the organization 5. Document the current state of your BI environment 6. Envision and propose a target state for what the BI should look like 7. Identify gaps between the current state and the target state 8. Based on the target state requirements and the gaps that need to be closed, build a vendor/technology shortlist, considering potential multiple vendor co-existence scenarios. 9. Design a road map to close the gaps and achieve the target state 10.Select software vendor(s) and (if necessary) systems integrator 27
  28. 28. 1. Define BI For Your Hospital • In your hospital, do you want BI to be: • Reporting, analytics and dashboards of clinical and financial information, only, or…? • Also involving the technical elements that allow BI information to flow, such as • Extracts, Transformations and Loads (ETL), • Data Warehouses, • Access Portals, • Master Data Management (MDM)? • Another way to think of this is, • Should the executive leadership team be building a BI strategic plan that only involves the outputs from BI information, or should the SP also involve the inputs? 28
  29. 29. 2. What to Do When You Decide If BI is Just Reporting…Or Much More! • If the decide that BI is just reporting and monitoring the • you will need to define, with the technical information • linkages, • dependencies, • overlaps and • Integration, including coordination with the higher level enterprise architecture efforts • If you decide that BI does, if fact, involve all the technical elements that allow for the reporting and monitoring • Then the organization will be building a much bigger SP, and in doing so, it will need to incorporate a great degree of technical materials 29
  30. 30. Getting Started With A BI Culture • The business intelligence pioneers profiled in this article share other lessons they have discovered in their journey: • Do not try to engage physicians in the start-up phase. “During that time, there’s really nothing for anybody to decide. You’re just building data maps and dictionaries and the basic foundational elements of the warehouse,” says Veltri. “If you put organizational leaders or physicians into this upfront process, they get bored because there is little progress toward the things they want, such as dashboards or reports.” • Appoint the right group of people to set priorities, depending on your organization’s needs. At Northeast Georgia, an Enterprise Priority Council is made up of the system’s vice presidents and medical staff members. “Based on what we are trying to accomplish strategically, they help prioritize the next opportunity, whether that is developing a new dashboard tool or taking on an improvement project with some technology need,” says Cummings. • In Denver, clinicians and revenue cycle leaders serve on the Warehouse Advisory Council that sets priorities. “They prioritized colorectal cancer screening as the first registry that we would build—even over diabetes,” says Veltri. “The primary reason was that a key stakeholder had received a grant to support a colorectal cancer screening project, which paid for some of the development. Without such a council, IT never would have known that this direction was acceptable to the physicians.” • Share dashboard data broadly. • At Hartford Hospital, the chief physicians of every department and every division have access to all the data—as do the nurse managers. “Any nurse who is managing a floor can go in and look at my physicians and I can go in and look at her floor,” says Lindberg. • “That allows us to have a conversation on how the different things are impacting one another. We can brainstorm together and come up with good solutions, working as a collaborative management team.” • Document how EHR data can be used to drive clinical improvement. • Because this capability is so new, everyone is a trailblazer, making mistakes as they gain experience. “I would encourage others that want to embrace a program like this to document the processes and the failures and successes and how we can improve this,” says Smith. “We can all learn from one another as we go forward.” • Veltri believes business intelligence answers the question: Can hospitals improve quality and charge less for that quality? “The answer is: ‘Yes, Denver Health has proven this can be accomplished,’” says Veltri. “But the organization must manage the use of quality data, and use this data to make informed decisions based on data.” Using Business Intelligence Intelligently, by Lola Butcher Summer 2012 HFMA Leadership magazine Publication date: Friday, May 25, 2012 30
  31. 31. 3. Ensure Senior Leadership Commitment • If Senior Leadership commitment cannot be obtained, STOP! • It will not do any good for the organization if the big bosses do not buy-in • The leadership team commitment will help to ensure that all of the work that needs to be done in developing the BI tools and techniques will pay-off • There are several ways to attempt to obtain the BI commitment • Create a BI Return on Investment (ROI). • Remind them of the millions of dollars that have been invested in the EMR systems, which is likely to return close to zero additional dollars on the bottom line. • It is only with BI outcomes that the EMR investment will pay off • So build a high level business case • Show them the kinds of benchmarking that can be utilized to establish competitive advantages • There are many different types of benchmarks available in the hospital industry that can be used for competitive purposes • Clinical benchmarks are obtainable • Quality benchmarks are obtainable • Patient satisfaction benchmarks are obtainable • The required Senior Leadership top down mandate will only work if accountability is attached to the commitment! 31
  32. 32. 4. Establish High Level Governance Offices and Roles in the Organization • Establish a hierarchy charged with successfully selecting and implementing a BI strategy • Select a team leader • Make ‘live’’ the BI definitions already established in previous steps • If necessary, develop a BI project management office to move forward strategy and operations of the BI plan • Develop BI governance rules for actual actions to take place • Need standard definitions • What is a billable visit? • How are provider incentive payments calculated? • Need to get clinical and business leader to define • Communicate • Monitor • Retrain 32
  33. 33. 5. Document the Current State of Your BI Environment • Using individuals and systems from the governance offices, determine • Internal environmental conditions • What are the elements of a BI Plan that already exist • Market share analysis • Product line analysis • Human resources analysis • Technology analysis • Financial analysis • Medical provider analysis • Supplier and partner analysis • External environmental conditions • Determine what is happening outside the hospital’s four walls, in relation to the BI Plan • Emerging technologies analysis • Competitor analysis • Payer analysis • Place the analysis and results in perspective 33
  34. 34. 6. Envision and Propose a Target State for the BI Environment • BI Information Technology architecture • Technical • Security • Data Requirements • Integration (with other applications, processes, portals) architecture • Information delivery (desktop, portal, mobile, disconnected , etc.) • BI operational, training, and support requirements • BI requirements for all: • Business and IT standards • Output styles (reporting, ad hoc querying, OLAP, dashboards) • Roles • Business roles • IT roles • Decision types (strategic vs. operational) • End-user self-service requirements • Process requirements • Multi-healthcare facility requirements • BI Return on Investment 34
  35. 35. 7. Identify Gaps Between Current and Target State • As in traditional strategic plan gap analysis, the hospital organization needs to • Determine exactly what they want to achieve • Why they want to achieve it • Where they are right now • Assess internal environmental conditions • Assess external environmental conditions • Describe the strategic gap from the desired to the current position in relation to organizational and environmental variables • So, that the organization can create action plans to achieve their goals • Identify competencies and resources needed to close the gap • Allocate capital and/or operating dollars to each initiative 35
  36. 36. Organizational Assessment • Just as providers who deliver care directly need to assess the financial implications of clinical intervention, operations staff members need to assess the clinical implications of their financial decisions. • To begin moving their organizations toward integration of clinical operational, and financial information, finance leaders should undertake an organizational assessment. • Specifically, finance leaders should ask three basic questions: 1. Is my organization ready? 2. How can I prepare my organization for the necessary change? 3. How can I get cross-functional buy-in? • Before starting the transition, a finance leader should understand where his or her organization currently stands and how ready it is to embrace the paradigm shift. 1. Are the nurses completely aware of supply costs? 2. Do the organization’s accountants have a baseline understanding of clinical quality? • This assessment will provide the information needed to identify steps to promote the organization’s readiness for the necessary changes, such as increasing educational opportunities, providing data at point of care, or simply starting a dialogue with department leaders. • The assessment also can help the finance leader identify the best way to ensure cross-functional buy in for the change. What Finance Needs to Know About Using Technology to Improve Value Sanjaya Kumar, January 3, 2011, http://www.hfma.org/Templates/InteriorMaster.aspx?id=24368 Reprinted with Permission of HFMA 36
  37. 37. Gap Analysis - Where Are You, Where Do You Want To Be • We need to begin by determining what capabilities exist at your hospital today • As we do this, let’s review • Some BI job competencies that the HFMA have identified through focus groups • A BI checklist of what is really needed at hospital organizations to minimize their implementation time and cost and maximize their outcomes • Then, let’s see what we may need to do to set up the implementation, and why it needs to be done 37
  38. 38. BI Competencies and Capabilities - Job Description BI levels 1. Reporting – data pull 2. Analysis and tracking 3. Consulting – listening to strategic leadership: what do they want to do? Then formulate the appropriate questions and identify the data perspective to address the questions. BI responsibility level Organizational influence Tasks Professional responsibility Decision Making Data pull Operational: tracking performance to business goals Capture, extracting, reporting Formulate data search Tools and report forms Analysis, track, monitor Tie to business processes Model Healthcare processes: - analytics, - regulatory, - patient processes, - integrating care Consulting Strategic: where do we need to go Structuring info for decisions; formulating the “next”questions Synthesize and Apply Knowing what the questions are/should be The document is a framework-structure regarding the levels of business intelligence and tasks associated with each of the levels. This is from the HFMA’s BI Advisory Group discussion in August 2012. The group identified 3 levels of BI responsibility with level 3 [consulting] as the current frontier. Original Definition • Gather • Store • Monitor • Analyze • Report • Take action 38
  39. 39. Business Intelligence Checklist Fill Out Back At Your Desk Business Intelligence Capabilities Checklist Your Your Desired Level One - Data Pull Current System Future State Data Mining How good? How often? How useful? Storage Capacity Is it big enough? Response Time Is it fast enough? Level Two - Analysis and Reporting Monitoring End-user friendly Finance department friendly IT friendly Friendly links for benchmarks and goals Analyzing Easy to manipulate for end-users Easy to manipulate for finance staff Answers questions you did not know you had Easy links for benchmarks and goals Reporting Easy to set-up Understandable outcomes for the end-user Understandable outcomes for the Finance staff Outcome links for benchmarks and goals Level Three - Consulting Helps to make forward-looking decisions Answers questions you did not know you had Helps to bridge the gap between actual results and goals Utilizes outcome links for benchmarks and goals 39
  40. 40. Take Away – BI Request Checklist Required Questions to be Asked Outcome That Can be Produced Benefits That Can Be Derived 1. Is there agreement on what to measure? 2. Can anything be done to affect the measure? 3. Are there specific goals or targets? 4. Are there defined critical thresholds? 5. Is an upward or downward trend “better?” 6. Is there such a thing as “too good?” 40
  41. 41. 8. Build a Multi-Vendor/Technology Shortlist, Based on Target State Requirements and the Gaps That Need to Be Closed • Determine the vendors and/or technologies that your hospital wants to review based on the target requirements • RFI vs. RPQ • Buy vs. Build • Outsource vs. Employees • Software as a Service (SaaS) / Cloud Computing vs. Client Server • Bandwidth • Each of these decisions will have a big affect on the success (or failure) of the Business Intelligence outcomes 41
  42. 42. 9. Create Action Plans to Close the Gaps • Design a road map to close the gaps and achieve the target state with: • A clear understanding of priorities and dependencies • Strategic and tactical steps (including proofs of concept and prototypes ) • A mix of top-down vs. bottom-up design approaches • Plans, such as: • Change management • Quality Assurance • Risk management • Scope management • Communications • Now that all the plans and details are in place, you can proceed with building a detailed BI business case 42
  43. 43. 10. Select Software Vendors and System Integrators, If Necessary • Despite enormous advances in information systems, the process by which most hospitals and health systems select them has remained virtually unchanged for decades: the “Request For Proposal (RFP)” • Unfortunately, vendors have learned ways to minimize the value of RFP feature checklists, to where they little today about system functionality • A 40+ year Hospital IT management consultant describes a modern selection methodology that replaces the RFP with • Scored demos, • Reviews of vendor user manuals, and • Mathematically structured reference checking • This is adapted from articles by: Vincent Ciotti Partner, H.I.S. Professionals A Management Consulting Firm 7 Ave Vista Grande, PMB 169, Santa Fe, NM; Telephone: 505/466-4958; E-Mail: vciotti@hispros.com 43
  44. 44. Selecting a Business Intelligence System in the Modern World – Check List 1.Develop a Top 10 features list 2.Issue a Request for Price Quotation (RPQ) with a features list 3.Obtain system demonstrations from appropriate software vendors 4.Make phone reference calls 5.Review the user manuals 6.Obtain preliminary costs 7.Produce semi-finalists rankings 8.Go on site visits 9.Engage in contract negotiations 10.Select the system that meets the tests 44
  45. 45. Focusing on BI Analytics is A Key to the Future of Healthcare Finance • We know that analytics focus on • improving operational performance, • ensuring effective management of operations, • gaining efficiencies and reacting to surrounding conditions more quickly, and • projecting the future or trends. • To differentiate and demonstrate leadership, finance can continue to enrich reporting and analytics aligned with organizational and departmental strategies. • And we know that investments in people, process improvements, and technology are typically required to help organizations become leaders in the finance analytics domain. • Healthcare organizations that believe a new economic model for healthcare payment is coming soon should start developing capabilities to succeed in the new environment. • The revenue cycle may never be the same. • As discussed above, obtaining the greatest strategic value from BI requires the ability to leverage: • New metrics • New models • New methods • The execution of business strategy is often hampered by a lack of reliable information. • The uncertainty about issues ranging from the future of healthcare reform legislation to local market transformation adds to the challenge. • In this environment, gaining continuous market and business insight and acquiring the agility to react quickly are increasingly critical to business success. http://www.hfma.org/Templates/InteriorMaster.aspx?id=28457 Edward J. Giniat, National Healthcare Sector Leader of KPMG Reprinted with permission of HFMA 45
  46. 46. What Finance Executives Should Do • What should healthcare finance executives be doing to lead in determining their organization’s BI strategy? • Finance leaders should be helping their organizations • define the right KPIs, metrics, and measures for the business, • understand the operating model and processes required to create an enterprise-wide information culture, and • change the way they use technology and data to enable this transformation. • They should recognize the linkage between financial measures and reporting and clinical intelligence for quality measurement, reporting and clinical decision support, and the role advanced data analytics can play. • Finance leaders should begin today to design the organizational structure and talent acquisition plans necessary to operate in a risk- based capitated world. • New relationships are developing among payers, providers, and suppliers. • New entrants are changing the game. • New competencies may be needed to perform many of the functions in an insured environment. • The opportunity is to find ways to connect disparate data and use them to “do better with less” and on a broader scale. • In fact, in a recent study, McKinsey Global Institute estimated that using advanced data analytics could save this industry $300 billion (Big Data: The Next Frontier for Innovation, Competition, and Productivity, May 2011). http://www.hfma.org/Templates/InteriorMaster.aspx?id=28457 Edward J. Giniat, National Healthcare Sector Leader of KPMG Reprinted with permission of HFMA 46
  47. 47. Deploying the BI Strategy – What BI Tools Are Currently Available? • Clinical / Financial Reporting • Scorecard • Dashboards • Cost Accounting • Service Line Reporting • Labor Management Analysis • Supply Chain Management Analysis 47
  48. 48. Meanwhile, Numerous New Payment Methodologies Require the Use of Clinical / Financial Reporting • A successful provider organization in a value-based environment will need to operate under payment systems that have moved away from fee-for-service to some form of shared financial risk involving a variety of upside and downside risk options. • Among the Pioneer Model, the MSSP and the PGPTD, there appear to be at least eight different payment models in play, and there are other variations being tried in the private sector. • At the same time, provider organizations are being required to measure and report outcomes and patient satisfaction in accordance with a variety of measures, and to be transparent about it. • Private sector arrangements are adopting these measures as well as others, and new measures are being developed continuously. • All of these emerging payment arrangements will demand, and reward, effective clinical and financial integration among providers across the continuum of care, and punish the failure to do so. 48
  49. 49. Clinical / Financial Integrated Reporting Simple Pneumonia BI Tools – Clinical/Financial Reporting Source: INSIGHTS Enterprise Edition, Cost and Clinical Reporting, www.hcillc.com 49
  50. 50. Clinical / Financial Integrated Reporting Major Joint Replacement - Hips BI Tools – Clinical/Financial Reporting Source: INSIGHTS Enterprise Edition, Cost and Clinical Reporting, www.hcillc.com 50
  51. 51. Profitability Analysis – Top 10 Service Lines Based on Cases BI Tools – Service Line Reporting Source: INSIGHTS Enterprise Edition, Cost and Clinical Reporting, www.hcillc.com
  52. 52. Profitability Analysis – Pulmonary Service Line – DRG Profile BI Tools – Service Line Reporting Source: INSIGHTS Enterprise Edition, Cost and Clinical Reporting, www.hcillc.com
  53. 53. Profitability by Physician – DRG 193 – Simple Pneumonia BI Tools – Service Line Reporting Source: INSIGHTS Enterprise Edition, Cost and Clinical Reporting, www.hcillc.com
  54. 54. Cost Accounting Analytics – Cost Variance Analysis to the Mean Cost Reduction Increase in Quality  $872 – Cost Reduction per Case  19% - Cost Reduction %  $29,648 – Total Cost Reduction  27% – Reduction in Re-Admissions  25% - Increase in Home Discharges What if 6 of the Top 10 physicians achieved a Direct Variable “cost per case” equal to the MEAN of their peers? BI Tools – Service Line Reporting Source: INSIGHTS Enterprise Edition, Cost and Clinical Reporting, www.hcillc.com
  55. 55. Cost Accounting Analytics – Cost Variance Analysis to Best Practice Cost Reduction Increase in Quality  $2,251 – Cost Reduction per Case  50% - Cost Reduction %  $76,534 – Total Cost Reduction  100% – Reduction in Re-Admissions  79% - Increase in Home Discharges What if 6 of the Top 10 physicians achieved a Direct Variable “cost per case” equal to the BEST PRACTICE of their peers? BI Tools – Service Line Reporting Source: INSIGHTS Enterprise Edition, Cost and Clinical Reporting, www.hcillc.com
  56. 56. Overtime Earnings Codes – Efficiency and Rate Variances Overtime Earnings Code - Efficiency and Rate Variances OPERATING ROOM Cost Center Overtime Earnings Code by Pay Period PP 24 Actual Hours 117.53 Budgeted Hours 179.00 HOURS - Variance (61.47) HOURS - Efficiency Variance Percentage (52.35%) Actual Average Hourly Rates 40.57 Budgeted Average Hourly Rates 40.06 RATES – Variance 0.51 RATES - Variance Percentage 1.28% Actual Total Dollars 7170.00 Budgeted Total Dollars 4768.30 DOLLARS - Variance (2401.70) DOLLARS - Variance Percentage (50.37%) BI Tools – Labor Management 56
  57. 57. Take Away Checklist– BI Request Checklist Required Questions to be Asked What Can You Do With These Outcomes? What Benefits Can Be Derived With These Outcomes? Are you able to calculate these ratios instantly (10 minutes after your biweekly labor stops crunching?) Are you able to instantly calculate this for every department, at the subdivision, division, administrative and executive level rollup? Are you able to present (report) the results back to those individuals responsible at the department, subdivision, division, administrative and executive levels in a format allowing them to drill down to the job code and individual employee levels? Are you also able to automatically and instantly generate biweekly labor alerts to the managers responsible for any non- compliance, as well as also generating these alerts to their bosses? 57
  58. 58. Detailed Pay Period Analysis – Overtime Dollar Amounts and Paid Hours Total $7,170 .00 179.00 BI Tools – Labor Management 58
  59. 59. Overtime Actual Trend (to Budget) Analysis 0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 H o u r s p e r u n i t s o f s e r v i c e Operating Room Department - Overtime Trend Hours Per Units of Service (Productivity) For the Fiscal Year Ended September 30, 2011 Pay Period 24 Analysis Acual Budget Page  59 BI Tools – Labor Management
  60. 60. Automated Email Alerts for Out-of-Compliance Conditions • In a Low Hanging Fruit environment, department managers and their bosses will be able to realize real savings through change management decisions. • Again, this can be done through a series of Excel spreadsheet analysis or much more easily and timely through commercially available software Page  60 ALERT October 14, 2014 Total Salaries per Workload Unit – Major High Has created a Major High Alert Data Date: October 14, 2014 Projected: 22.50 Actual: 25.00 Difference: 10.0%
  61. 61. Class Survey • Do you have a BI strategic plan? • If so, does it include many/most of the plan steps described in the class? • Have you developed a formal plan to select a new BI system? • If not, is it because, • You already have a system • You just completed an acquisition of a new system • Using formal plans is not what your organization does? 61
  62. 62. Action Items • Make sure that you have a BI system, with essential skills, that allows the hospital to understand: • Cost of adverse events • Margin impact of readmissions • Cost of waste in care process • Develop a BI strategic plan, if you have not already done so, that ensures the organization will be able to optimize many of its clinical/financial integration processes • Analyze your hospital’s current tool kit and determine if the hospital is ready to accept the 21st century tools necessary for improved financial, operational and strategic outcomes in a value-based world 62
  63. 63. Conclusions • Operating a hospital is tough! • In the new era of the ACA, moving from volume based leadership to value based leadership will test the skills and resources of the hospital organization • Finding the value is not hard, but it is a process • While the HFMA has been in the forefront of developing programs describing for its hospitals how to move for volume to value, it is still up to the hospital organizations to create action plans and then implement those action plans • For hospitals to take full advantage of its opportunities, the organization must • Develop very good strategic plans, • Make use that the plans are carried out • Use the (favorable) outcomes of the plans to make good improvement decisions for • Quality indicators • Clinical outcomes • Financial performance • Do it, use it, improve it, claim it • It is all up to you! 63

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