• September 2008 FEATURE ARTICLES •
Financial Information Systems
Path to Insight
Financial departments make or break organizations. Can BI improve healthcare CFO success?
By Jason Burke and Rick Ingraham
“If a business intelligence solution can’t help you make sound decisions about your company’s future
quickly, easily and with confidence, it’s neither good business nor intelligent.”
Jim Goodnight, Ph.D, CEO, SAS
Healthcare in the U.S. is on the cusp of
monumental change. Already, the hospital and provider community
is dealing with varying stages of consumer-directed healthcare
and public access to quality and cost metrics; heightened focus
on compliance with evidence-based care protocols; and, a
staggering number of tier-network and reimbursement programs.
Each of these fundamentally affects revenue streams, expense
management and the ability to compete. Considered alongside the
external economic forces impacting all industries, it is clear
that healthcare industry executives must evaluate an increasing
amount of information to best assess their organization’s health
and future.
In the middle of this healthcare ecosystem is
an avalanche of information that is expanding on an hourly
basis. Whereas 10 years ago, skeptics argued that the abundance
of paper-based business processes in healthcare precludes the
adoption of electronic information systems, our industry has now
seen a strong uptake of data collection and management systems
covering administrative processes, clinical care and all
functions in between.
Given this progress, one might assume
healthcare CFOs and finance departments are now in a much better
position to make informed decisions: Insights into
reimbursements, utilization and staffing, capital management,
emergency care spending and many other areas should be within
our grasp. Yet CFOs know the reality —
valuable data assets sit in electronic silos spread across their
organizations.
Healthcare executives and care providers
cannot afford to spin their heads from one data silo to another,
grasping for slivers of insight. If we are to improve
productivity, cost management and care outcomes, we must adopt
better mechanisms for making informed decisions and
corresponding business improvements. That type of cultural shift
towards precision and certainty can only be attained through
evidence-based knowledge derived from an integrated view of the
enterprise.
The Changing Role of Finance in Healthcare
The role of the finance department continues
to evolve and become more strategic as the healthcare industry
transforms. The CFO must ensure transparency; streamline
consolidation and reporting; improve the accuracy of plans and
budgets; align day-to-day operations with long-term goals;
predict and respond to market changes; reduce costs and
streamline processes; understand profit drivers and grow
profitability; and, ease the strain of compliance requirements.
In short, healthcare CFOs must understand the entire business of
healthcare.
A CFO’s ability to effectively manage and
harness financial, operational or clinical data is crucial to an
organization’s success. However, discovering the value hidden in
an organization’s diverse and distributed data is an ongoing
challenge. Many finance departments still use manual,
complicated and inaccurate reporting tools to view data; and,
financial processes are not always aligned throughout the
enterprise. Meanwhile, the healthcare industry continues to
capture more and more data, typically centered on organizational
staffing disciplines.
Data silos have proliferated for care
support, patient data and diagnostics, clinical care, finance
and accounting. In many organizations, a litany can be found
resonating in the halls: "The information needed does not
exist," or "We still use paper records," or "The data is not
clean enough," and, the ever present "We do things differently."
Some of these rationales represent legitimate challenges to
leveraging technology to make better decisions; however, none of
them represents insurmountable obstacles that have not been
solved in other healthcare institutions.
Brigham & Women’s Hospital (BWH) in Boston,
Mass., implemented a performance management system built upon a
platform of business intelligence (BI) and analytics. This
system integrates, analyzes and distributes data from all
patient contact and care delivery — from 29 sources and 50,000
patient encounters a year — into best practices and operations
throughout the hospital, whether in a patient care setting or
the business office. Intelligence is shared with executive
management, physicians and frontline employees. Staff at all
levels can see how their actions — individually and as a whole —
affect the bottom line and patient satisfaction.
"There are huge workforce issues,
particularly in nursing, and in technical and specialty areas,"
says Michael Gustafson, M.D., BWH’s vice president of clinical
excellence. "The public expects increased accountability to make
sure that hospitals are providing quality care and safe
environments. There is an increased demand among patients for
better service from physicians, too. And, patients are getting
more involved; they have higher expectations when they come in
for care."
To successfully address these issues,
organizations must integrate performance measures from both
provider and business organizations, and forge a single strategy
for delivering the right set of services to the public. However,
without incorporating all relevant data, across-the-board
improvements would be difficult at best. BWH’s analytical BI
system has contributed to improved reimbursement arrangements
from payers as well as lowering care delivery expenses.
"To make informed decisions you need the data
capabilities, and to drive change, you need accountability and
incentives," says Gustafson. "When you put all of the management
pieces in place, you have the ability to identify and implement
real improvements."
A CEO’s Perspective
Jim Goodnight, Ph.D, founder and CEO of SAS,
is no stranger to the data silo scenario. For more than 30
years, his company has helped organizations such as CIGNA
HealthCare, Healthways and Highmark to link and leverage
disparate corporate data assets and create clearer views of
performance.
A CFO’s ability to effectively manage and harness financial, operational or clinical data is crucial to an organization’s success. However, discovering the value hidden in an organization’s diverse and distributed data is an ongoing challenge.
"Business intelligence powered by analytics
enables all layers of an organization to exploit every data
source to understand the past, examine the present and predict
the future, and confidently act on this knowledge. Business
intelligence is derived through a technology platform that
allows for full access to any current data store, or future data
sources, without creating or investing in additional data
silos."
Dr. Goodnight sees healthcare organizations
progressing through a business intelligence maturation process
over time, starting with simple reporting and eventually growing
to leverage the most sophisticated types of analytical methods.
Whereas most healthcare organizations today focus on basic
reporting, Goodnight believes a more comprehensive approach to
BI and analytics ensures that organizations can continue to
improve over time.
"A technology platform is truly BI-oriented
if it supplies a full scope of analytic tools, ranging from
simple summaries to advanced predictive modeling, from which
better and more relevant insight into the business can be
achieved."
Of course, getting the information together
and conducting the analysis is only a small part of the process.
Ensuring that the right people are able to view and act on the
information in a way that is natural to them is equally
challenging. This is especially true in healthcare, where
potential information consumers include both medical and
administration functions with a wide variety of skill sets.
Assuming that basic reporting will produce the desired end
results is where many organizations miss the mark.
"If a business intelligence solution can’t
help you make sound decisions about your company’s future —
quickly, easily and with confidence — it’s neither good business
nor intelligent," says Goodnight.
BI in Practice
Though industries such as financial services
and retail adopted business intelligence more quickly than
healthcare, many hospitals and providers now have an initiative
focused on BI. Some are in the early-stages of development and
some are further along the learning curve.
Maine Medical Center in Portland, Maine, has
a leading-edge focus on patient care and quality that is, in
part, driven by focusing key performance metrics on ensuring
that evidence-based care gets delivered. Measuring everything
from staff hand-washing compliance to whether patients are
taking the right dosage of medicine, Maine Medical compares care
performance metrics against financial objectives. This
facilitates a better understanding of the impact changes have on
both patient and financial health.
An example of the payoff from BI and
analytics can be seen in the hospital’s treatment of congestive
heart failure: The Joint Commission sets a list of standard
treatments that every hospital needs to offer every congestive
heart failure patient. It’s an extensive list that includes
measuring the function of the heart’s left ventricular valve to
counseling patients on diet and lifestyle. When Maine Medical
first started its measurements, only 60 percent of patients were
receiving all the treatment and counseling that evidence-based
medicine sets as a standard of care, however, that has improved.
"In our most recent month we were at 95
percent performance,’’ says Doug Salvador, associate chief
medical officer. "We’ve been averaging over 85 percent for four
consecutive months on the heart failure core measures." Meeting
a high percent of guidelines is critical to receiving the
highest reimbursements from Medicare, Medicaid and those private
insurers with various stages of pay-for-performance programs.
Whether initiated by the Chief Medical
Officer or the CFO, the culture of collaboration that BI can
nurture is present at BWH, Maine Medical and other leading
organizations. Still, there is significant opportunity for
growth in BI adoption within healthcare and the CFO can lead
this evolution by continuously including all disciplines within
the organization in the performance evaluation process.
Financial performance reporting and forecasts will always be
more complete with a better understanding of the impact every
care delivery change has on margins.
"It has never been more important that we
find ways of improving healthcare in the U.S.," says Goodnight.
"BI delivers opportunities to better grasp the markers of
profitable operations and patient care dynamics. This impacts
every healthcare CFO."
The application of advanced analytics enables
the asking and answering of the harder questions that will
ultimately impact the financial performance of every healthcare
organization. By aggregating and analyzing patient, provider and
benefit plan data alongside financial metrics, better decisions
related to health outcomes and evidence-based medicine protocols
can be made — insights valuable to both providers and payers.
BI can help remove the risk around decisions
focused on disease management, clinical effectiveness, safety
and new consumer-directed healthcare programs. Indeed,
practically every major issue facing healthcare today demands
greater access and analysis of broader and deeper sources of
data than our traditional silos have provided.
Jason Burke (left) is worldwide director of health and life science and
Rick Ingraham is global healthcare strategist for SAS.
Contact them at jason.burke@sas.com and
rick.ingraham@sas.com.
BI: From Concept to Practice
Intelligence we can act upon is difficult
to derive and depends upon a multitude of inputs, opinions
and results from careful analysis and study. Successful
business intelligence programs cover four critical areas
that enable these types of decisions and actions: data
integration and quality; the application of sophisticated
analytics; information delivery to the right information
consumers; and, institutionalizing an ongoing discipline of
information-driven business processes and best practices.
Data Integration:
All healthcare organizations do data integration in some
form, but the historical ad hoc approaches do not provide
the scale and rigor required by most analytically-driven
applications. At a minimum, the data integration platform
must be able to facilitate data management covering the
myriad of data sources necessary to address improvements
demanded by administrative, financial and medical
stakeholders. As these data sources tend to be located
across different disciplines within the enterprise, an
enterprise-oriented approach to the data integration process
is needed. For example, organizations need a comprehensive
electronic catalog of the various enterprise information
sources including automated access abilities, security
rights and the data definitions. This catalog enables
analytical applications to be developed without resorting to
extensive and repeated manual effort. Similarly, since the
insights generated from the analytics can only be as precise
and valid as the information feeding the application, an
enterprise data quality plan is also common.
Analytics:
While data integration is clearly a significant component of
any intelligence platform, and the complexity of data
sources should not be underestimated, you must incorporate
advanced analytics to add value for each subscriber. If
value is perceived, each stakeholder will focus on the
degree to which the platform provides insight and relevance,
and each will want a variety of analyses to be used against
the platform.
So what is the range of analytical
capabilities open to a CFO today? At the most basic level
there is standard reporting, generally addressing "what
happened." This is traditionally where finance systems
excel. Ad hoc reports allow an organization to address
questions of how many, how often, and where. Then there is
drill-down and more advanced query and reporting to explore
where problems or variances exist.
More sophisticated systems provide alerts
to guide what actions are needed. Then, the application of
powerful advanced analytics such as data mining, forecasting
and optimization allows teams to understand why things are
happening around care, performance and costs. Forecasting
predicts what will happen if trends continue. Predictive
modeling helps the executive understand what will happen
next depending on the actions taken in response to a
condition or trend; and, optimization offers the very best
balance between constraints such as quality and cost,
requiring the full range of analysis outlined.
Information Delivery:
With data gathered from the contributing stakeholders and
advanced analytic capabilities in place, intelligent
solutions focus on the speed and accuracy of information and
the manner in which it is deployed. As stakeholders have
personnel with various degrees of overall management,
detail-specificity and responsibility of enacting change, a
complete BI platform must offer a variety of methods for
deploying information. It is critical to consider each
stakeholder’s "persona" by ensuring that the proper format
is available to them for visualization, exploration and
reporting. The better this alignment is achieved, the
greater the likelihood that stakeholders can achieve
improved effectiveness and efficiency.
A New Discipline:
Business intelligence programs cannot be successful if seen
as one-time projects. The creation and deployment of a
reporting dashboard does nothing to ensure that sustainable
improvements in utilization, capital management,
productivity or other benefits are realized. Rather, it is
through an ongoing program of applying learning, identifying
the next set of business questions that need to be analyzed,
and ensuring the needed behavioral changes of healthcare
workers that produce real benefits and, potentially,
competitive differentiation. Business intelligence is an
enterprise competency that grows over time.
The many challenges facing the healthcare
arena have been well-documented, and great opportunities
exist for leveraging financial information systems to
contribute to more robust BI. Capitalizing on the benefits
of BI requires a commitment to organizational and cultural
change, continuous improvement, effective information
management, and new levels of experience in hiring. With the
growth in demand for healthcare informatics and the push for
better intelligence, many organizations are reshuffling the
deck of personnel to establish a cross-discipline team known
as a Business Intelligence Competency Center (BICC). A
dedicated team within a BICC can strengthen a healthcare
enterprise’s effectiveness in dealing with these challenges
and facilitate the form of collaboration that results in
substantive improvement. Research funded by SAS found that
36 percent of those surveyed have already established a BICC
or other type of cross-functional team dedicated to
optimizing their BI initiative, and organizations with
mature information management practices actually exceeded
their previous year’s performance.
