The Critical Role of Analytics in Managing the Strategic Decision ProcessBy Jack Duffy
Executive Vice President
We have all heard the expression “Betting the farm” – farmers understand that a poor decision on diversifying crop selection, planting dates, water and weather can determine the success and future of their farm.
The significance of the economic drivers being rolled out in the Affordable Care Act creates a “bet the farm” environment in healthcare board rooms and executive suites. Historically strategic plans could be constructed using multi-year horizons, but today’s decisions are being compressed in ever-shorter windows with the consequence of a failure capable of destroying hundred year old institutions and key community resources.
Fortunately a new set of risk management and decision support tools are coming to the market to assist healthcare leaders in making these critical decisions. Under the general label of ‘Analytics,’ many software development and consulting entities have introduced products designed to support the strategic planning and decision support process using a new approach.
We often see analytic product advertisements that start with a fundamental definition of their analytics perspective. Many products struggle to distinguish themselves from previous versions of reports, dashboards, graphs, and other decision support tools. The first question you pose may be “Is the new kid on the block better than the old kid?” Let’s consider some of the attributes that could help you answer this question.
- Analytics products use common source files (e.g., 835, 837, UB-04 and itemized bills) that are readily available. They will build new, or use existing data repositories or data warehouses and send information to users.
- Analytics solutions leverage historical internal data sets and integrate them with external data. To be of any sustaining value, strong links must be made to document the cost of care directly to specific reimbursement relationships. Evidence or value-based healthcare needs to deliver a consistent output and quality outcomes (including readmission rates) which need to be analyzed against cost inputs.
- The majority of analytics products are delivered as a Software as a Service (SaaS) model on the secure Internet – providing low-cost, faster, and more flexible solutions with a quick ROI.
- Analytics output are not limited to desktop devices and will travel with the healthcare leaders and managers on a wide range of mobile devices. They feature flexible alerts and are extremely sensitive to changes in payer strategy or government policy shifts.
- Finally, analytics products cost less than the traditional decision support software it replaces and requires minimum information services support. Outputs are cycled daily or in real time, rather than periodically, and provide timely information that can be tied to multiple strategic initiatives.
It is clear to this writer that an investment in analytics is a required risk management tool. The issues related to declining inpatient admissions, physician integration and organizational consolidation are too important to not invest in contemporary tools to manage these processes. Analytics should be positioned to allow for scenarios to be run using current data to measure the impact of the rapidly changing environment.
A contemporary example could be the decision to discontinue a service that has no chance of being economically viable. What happens to the remaining services and relationships based on this decision? Are there links that need to be considered, and is the elimination of a service going to provide the intended cost savings or can other provisions support a community required service?
Please continue to consider CentraMed when identifying analytics solution partners. CentraMed has quietly but effectively positioned its software portfolio to meet the goals described herein.
When it’s your organizations turn to “bet the farm,” go forward with the most comprehensive view of organizational consequences and the timeliest use of critical information.