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7 Highly Elegant Business Intelligence Applications for Healthcare Providers

Originally published May 19, 2009

Software developers often use the phrase “elegant code” to describe programming that is simple, clean, handles a wide variety of situations with ease and perhaps most importantly, hasobviously apparent value to anyone who reads it. This quote from the book The Art of UnixProgramming  by Eric Steven Raymond does a very good job of describing this concept:

"Elegance is a combination of power and simplicity. Elegant code does much with little. Elegant code is not only correct but visibly, transparently correct. It does not merely communicate an algorithm to a computer, but also conveys insight and assurance to the mind of a human that reads it. By seeking elegance in our code, we build better code."

Power with simplicity is what we seek in creating a strategy to guide our organizations in order to get maximum return on our investment. And a readily apparent strategy is essential to geteverybody on board in order to achieve our goals.

Healthcare providers are under constant pressure to achieve a number of goals (often competing), for a number of stakeholders (also often competing), under any economic, political, regulatory andbusiness conditions. We need elegant strategies more than ever.

Business intelligence can help. And choosing elegant business intelligence applications can help even more because, as Raymond suggests, we can then do “much with little.”

Elegant Business Intelligence Applications

A business intelligence application can be considered elegant if it:
  • Adds value at any time – immediately and in the future.

  • Adds value in any economy – recession or expansion.

  • Adds value at any level of the organization – tactically and strategically.

  • Applies to any size healthcare organization – large or small.

  • Applies to any type of healthcare organization – hospitals, clinics, labs, long-term care, etc.

  • Is visible and valuable across the organization – to the chief medical officer, chief financial officer, chief operating officer, et al.
Fulfilling all of these criteria may seem like a tall order, but there are actually dozens of analytic applications that fit the bill. No organization can afford to chase every good idea orbuild every application, so it is necessary to narrow the list.

Seven Examples

Here are seven applications that qualify as elegant business intelligence applications for healthcare providers using the criteria listed above:

Demand Data Slicing. Until now the healthcare industry assumed it was impervious to economic downturns. It was thought that people would always need healthcare. But with more than half of the nation’s hospitals operating at a loss and medical practices scrambling for revenue, we now know that healthcare demand, and especially compensated demand, is vulnerable.

Often, one of the first analytic applications implemented by healthcare as well as other types of organizations is some form of demand analysis. Demand on the organization is the key driver for virtually every other activity in the enterprise. Resources are allocated according to demand trends. Service lines are developed, practices are formed, facilities are planned and built, and people are hired, fired, transferred and laid off based on demand patterns.

Demand data is essential in any economy, and is useful up and down and across the organization. This alone makes it a highly elegant application for business intelligence.

But to take it a step further, demand and revenue data is more useful when sliced in a number of different ways in order to spark new ideas, new methods and new operating models. Traditionally, demand and revenue are presented along formal organizational lines such as by profit center, by enterprise type, by service line, by practice, etc. With a detailed base of data to start with, healthcare providers can aggregate data by patient demographics, by type of service needed, by time of day, time of week, time of year, by method of delivery, etc. This is even valuable by method of payment. For instance, how much revenue do you get from single moms in August at your retail clinics? How much is compensated versus uncompensated? With this information, how might your practices change to meet this demand and get compensated demand? How might your service processes change? Your hiring and training approaches?

Patient Registries. Of all of the potential clinical intelligence applications, one of the best is the patient registry. These types of repositories have been around for decades, and probably for centuries in less formal forms. What is new is the explosion of potential uses for a registry. Processes such as chronic care management, disease management programs, case management, quality measurement and patient volume analysis are but a few potential uses. Encounter, lab, claim and other types of data are used for three key purposes: 1) to analyze patient population trends and patterns; 2) to give clinicians a timeline of an individual patient’s illness and the care provided; and 3) to support patient reminder programs by phone, email, etc. Most of the beacons of the healthcare industry use sophisticated registries for quality and performance improvement, as well as to support strategic decisions such as clinic location analysis, disease center justification, etc.

Profitability Leakage Analysis. Profit leakage occurs in every organization, every department and every process. Business intelligence is well-positioned to help you find and clean up leakage because it lends itself to looking at the problem with a wide range of data and from a wide range of perspectives. Walking down the P&L (profit and loss statement), we find examples of profitability leakage:
  • Revenue leakage due to lost sales, underpricing, missed opportunities.

  • Billing leakage due to billing errors, overbilling, underbilling, missing bills.

  • Reimbursement leakage due to miscoding, undercoding, rebilling.

  • Margin leakage due to overpayment, double-payment, pricing errors, and so forth.
Leakage analysis can be profitable, but can also be embarrassing. For example, a hospital payables clerk I know was processing bills on her first day when she came across one from a Canadian vendor. She asked if she should pay in US dollars or Canadian dollars and found that nobody knew. She calculated how much the company was overpaying due to the exchange rate variance and found it to be $124,000 since they began buying from the vendor. Not bad for her first day.

Process Improvement Wins. Continuous improvement of the processes occurring in your clinical and administrative settings is essential to survival and success in the healthcare industry, just as it is in other industries such as manufacturing, financial services, retail, etc. Since quality, effectiveness and efficiency in healthcare have come into the spotlight over the past decade, it seems as if every stakeholder in the industry (employers, payers, patients, government officials, etc.) is demanding evidence of improvement. Information about the patients you serve and the care activities you provide is necessary to find and correct inefficiencies, and to support reporting of your efficiency to these other stakeholders. It is in your best interest to make use of this information to better your operations proactively, instead of passively responding to demand for this information

Cost and Waste Reduction Analysis. At this moment, decision makers outside your organization are making judgments about your organization in terms of what constitutes “waste” and “unnecessary cost.” Using historical data from your clinic management and accounting systems on cycle times, labor utilization, supplies utilization, procedures employed and medications prescribed, as well as their respective costs, you can find and correct wasteful activities yourself, and potentially even market this as an advantage.

Quality and Performance Analytics. It is generally acknowledged that what was outstanding performance five years ago, today doesn’t even make the grade. Quality recognition programs and P4P (pay for performance) contracts have become the norm for influencing quality improvements for healthcare providers. They are often the price of admission, and still higher levels will be expected. Data is needed on services performed, timeliness, interventions provided, clinical outcomes and their effect on improved patient functionality. Frequently, this information is subsequently analyzed by payers and purchasers for the effect it has on worker productivity and lack of absenteeism, among other measures. Healthcare providers can use these measures internally to judge the effectiveness of their own results and the processes that produced those results. The monetary incentives can also be plowed back into further quality improvements to stay ahead of the curve, and the recognition can be used for marketing purposes.

Reusable Compliance Information. Compliance in healthcare comes in many forms from many sources. There is involuntary compliance from the state, federal and local governments. There is voluntary compliance from quality standards organizations such as the Joint Commission, NCQA, Bridges to Excellence, Leapfrog, etc. And there is semi-voluntary compliance from organizations that pay for healthcare services such as CMS, health plans and self-insured employers (if you want to contract with them and get paid, you need to negotiate the rules of engagement with them).

Compliance has joined death and taxes as the new constant. And it will only increase in volume, complexity, subject areas and sources. But the good news is that much of it is not new. Much of it is based on the same sets of measures, whether they are clinical performance, financial performance, service quality standards, safety measures, patient and provider satisfaction indicators, and so forth. This presents an opportunity for using business intelligence to serve multiple compliance requirements. Plus, as new mutations emerge for measures, the data and the rule sets can be recalibrated to serve these new needs.

Next Steps

Look for elegance in your business strategy and in your business intelligence applications. My hope is that if you have already begun to implement business intelligence and analyticalapplications in your organization that they have elegant characteristics. And if you have not begun, I hope that you will use these to guide your investment decisions.

Next month, my BeyeNETWORK Healthcare Channel co-host Laura Madsen will look at the same question from the healthcare payerside in her article 7 Highly Elegant Business Intelligence Applications for HealthcarePayers.

Thanks for reading!

  • Scott WanlessScott Wanless

    Scott is the Healthcare Analytics Director for Cipe Consulting Group. He has more than 30 years of experience in business intelligence strategic planning, analytics application development and business analysis across numerous industries including hospitals, physician groups, healthcare payers, laboratory research, insurance, lending, manufacturing, retail and state government. Scott can be reached at scott.wanless@cipeconsulting.com.

    Editor's note: More healthcare articles, resources, news and events are available in the BeyeNETWORK's Healthcare Channel featuring Scott Wanless and Laura Madsen.

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