3 Pieces of Data You Want in Your Next Hospital Finance Report

Data you want in your hospital financial report

We've talked a lot on this blog about the critical need hospital finance directors have to identify, collect and analyze actionable data. It's one thing to know a lot about your constituent healthcare consumer population; it's another thing entirely to figure out what about them or among them you can directly influence.

Unfortunately, many hospitals still face the challenge of unstructured, siloed data. Many EMRs and data storage systems rely on scanned documents and transcribed notes. In fact, it has been estimated that as much as 80 to 90 percent of all patient data existing on EMRs today is stored in free-text notes and scanned documents. The data is there for analysis, but it's buried in reams of PDFs, image files and spreadsheets. It's not intuitively searchable. There's a lack of standardization in titling, format, recording style, etc. Data is neither easily accessed (unless one knows exactly where to look) nor securely stored.

Often, patchworked back-end software solutions and system bridges aren't mapped well, so interoperability even between divisions within the same facility can be an issue. Developing a deep analytical capability in such a siloed environment takes much hard work and quite a bit of investment.

It's not something you can simply develop overnight. You'll need a long-term plan and someone to take ownership of it.

The Basic Steps for Developing Your Hospital's Data Analysis Capabilities

Getting a hospital data analytics program off the ground may seem overwhelming, especially if you are not well-versed in the possibilities. You're going to need to rely on guidance and expertise from a variety of members of your team in order to find the best solution. Let's take a high-level view at the process.

  • First, you need buy-in from the board and the CEO — especially if your current EMR and data storage systems won't be able to handle the amount of information you will need to collect. You're going to need a flexible budget that will allow you to make smart spends as opportunities present.
  • Then, you need to work with the hospital COO, CMO, IT director and your providers to develop a prioritized list of questions that either need to be answered, or that your colleagues are curious to answer.
  • From that list of questions, you will need to find, test and purchase the most appropriate information technology solutions.
  • Once purchased, you'll need to work with providers and IT to map info capture fields that would allow your clinical staff to obtain the data points you'll need, without creating too much drag on patient flow through the wards.
  • You'll need to research best practices in the healthcare industry, talk with your colleagues and with your providers to develop a standard series of benchmarks against which the hospital will measure its progress.
  • Finally, you'll need to develop a series of reports that will allow you to monitor that progress.

What data should those reports include? Again, that really depends on what you and your providers want or need to know. But here are our 3 suggestions for data points that should be on your hospital's regular finance reports, to help you develop actionable intelligence about your patient population.

1. Risk-Adjustment and Risk Mitigation

One of the necessary developments for healthcare reform to succeed is the building of a more proactive care delivery system. In the past, hospitals and other provider organizations have operated on a largely reactive model: the patient presents with a complaint, the complaint is evaluated using objective means, a diagnosis is made and a treatment prescribed.

But now health data analytics give us the ability to look beyond that reactive model and identify risks to patient health, to clinical productivity and, ultimately, to profitability — and to take preventative action to stop negative outcomes.

Let's think for a moment about the revenue cycle. A healthy revenue cycle is dependent upon more than a well-oiled billing and collection machine. It's also dependent upon mitigating "leaks." We need to reduce the risk of waste.

How much productivity, for example, do hospitals lose each year to patient non-compliance? How much do we lose to providing unnecessary care? How much do we lose to drug seekers gumming up our primary care offices and ERs?

Some health insurers are already beginning to use deep analysis of correlated diagnosis codes — repeat instances of acute back pain, intractable headaches, constipation, etc. — to identify potential opiate abusers and intervene to offer treatment to them.

In groundbreaking blend of data analytics, financial resource management, preventative medicine and social work, insurers like Massachusetts' CeltiCare are hiring analysts and social workers to comb through piles of their insureds' claims to identify narcotic addicts, develop trust relationships with them and lead them to addiction recovery.

Could analyzing your hospital's revenue cycle leaks lead to that level of preventative care? Could identifying and intervening in the care of "frequent flyers" lead to better preventative medicine, increased clinical productivity, reduced readmissions and better reimbursement rates?

2. Supply and Medication Cost and Usage

Many hospitals have difficulty tracking their medical supply and pharmacy use. Accordingly, they have difficulty developing an accurate picture of how much they need to order, when they need to order it and how much waste occurs due to on-the-shelf expiration.

And it's a tricky exercise, too. A particular lifesaving medication, device or supply may be expensive and needed rarely. So the hospital is in a damned-if-you-do-damned-if-you-don't situation: keep the expensive supply on hand and risk high costs, or roll the dice on having less than you need on hand for an emergent case.

Big Data offers us the possibility of getting a better handle on how much is coming in, when it is coming in and how and when it is going out. Working with your COO or supply chain manager to develop report metrics that show you the amount of waste could help your facility to balance preparedness and cost.

Focus on average per capita waste values here: don't get hung up on nominal values month-to-month. Remember, the most important goal is to reduce inefficiencies while erring on the side of patient safety.

You'll probably want to know how much is spent on supplies and medications per patient (broken down by acuity level, ward or diagnosis code class). Or, you might want to know if your supply and medication expenses are trending up or down (relative to inflation) over a period of months or years.

If you are able to identify an uptrend in particular hospital unit or patient segment, are there ways you can work with providers, clinical managers and frontline staff to reduce unnecessary usage? Are there systemic issues in the supply chain or in the pharmacy that need to be addressed?

3. Revenue Cycle Efficiency Metrics

The revenue cycle is the heartbeat of a healthcare organization; if it is irregular, there's a significantly increased risk of mortality. Look for ways that you can use finance reports to boost your hospital's revenue cycle efficiency.

You could be losing money to untimely filing due to lags in the charting and coding process. A lengthy average time between service provision and claim filing can indicate that something is wrong you’re your process, that coders are to wait on providers to finish incomplete charts, for example.

What is your hospital's average claim to reimbursement time? If insurers are failing to process claims in a timely manner, see what you can do to work with insurers to speed up or automate the process.

What is your organization's claim-to-reimbursement success rate? If insurers are repeatedly denying claims for coding or utilization review technicalities, you need to know what adjustments need to be made in the coding or case management departments in order to reduce technicality denials. Are there ways that you can help your patients track their insurance claim amounts to help prevent denials due to exhaustion of benefits?

Often, the evidence for a service or workflow issue at the clinical level is found in financial reporting. If you aren't already measuring and tracking your hospital's revenue cycle efficiency, consider developing your ability to do so now.

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