The Changing Face of Health Care: How Business Analytics Can Improve Performance & Drive Efficiencies


To say that the health care industry is undergoing a significant transformation would be quite the understatement. Current economic conditions have challenged health care organizations to deliver optimal  services in the face of compromised cash flows, reduced resources, and declining margins.

President Obama’s signature on the Patient Protection and Affordable Care Act has effectively raised the stakes, shifting the focus of discussion within health care circles from talk of reform, to demand for transformation.

Facing pressures from both the public and administration, health care organizations are re-examining how the mountains of information at their fingertips can be better used to nurture future growth and drive high quality care. How can we provide safer, more cost-effective care to patients? What’s the financial payoff for quicker recoveries and short hospital stays? What’s the right mix of services at a particular location to ensure optimal care?

The latest advancements in business analytics technology – a key piece for any smart health care system – are helping organizations manage their existing data to both optimize clinical and business operations and differentiate services in their communities.

Business analytics, both historical and predictive, can be the catalyst to ensuring that critical health information reaches the right people, at the right time, so they can better monitor performance, detect trends, predict outcomes and deliver more efficient patient care.

Looking inward, health care decision-makers need to better understand how their organization is performing against its targets in order to make the best use of resources. By linking individual and team performance to organizational goals, analytic capabilities such as scorecards or dashboards can help users determine how their roles drive institutional performance, and quickly spot delivery trends, which in turn can better support critical quality initiatives.

The CFO from a major physician services organization once told me “professional billing is an inherently inefficient process” due to increasing costs, growing receivables and greater denials from insurers. Using business analytics, the company was able to reinvent its administrative services, building key reports that enabled each practice to more effectively analyze net collection rates, accounts receivable aging and the costs of doing billing per net collected dollar, and by cost per invoice. Data was then fed into balanced scorecards that provide management with summarized information that helps drives stronger operational decision-making.

Externally, health care organizations are always looking to shore up operations to ensure the entire organization is running at peak efficiency, particularly in the face of competition. This requires an in-depth understanding of how well the organization is operating relative to its historical trends, its peers, and the overall market. Instead of measuring performance in absolutes, decision-makers can use key performance indicators to gain a bigger picture of organizational efficiency. Rather than single-point measures, such as patients per month or revenues per service line, administrators can track performance relative to market growth, strategic objectives, or peer groups.

Bloorview Kids Rehab, based in Toronto, is using business analytics to provide management the context they need for key decisions such as rebalancing the organization’s service mix and improving patient throughput processes. The technology has essentially become the glue for its various departments, linking critical clinical information together to help Bloorview learn more about the process of care delivery and where to make adjustments and improvements.

Optimizing resources for best performance

In a perfect world, health care organizations could focus 100 percent of their time on delivering top care to its patients. Unfortunately, as cash reserves continue to decline, health care organizations must also keep a close eye on the business side of health care delivery, oftentimes making difficult decisions on allocating resources and prioritizing initiatives, be it financial- or workforce-related.

Through detailed business analytic capabilities, decision-makers can assess how results change over time, in different locations, and across various service categories. In practical terms, this level of insight makes it easier to make the tough calls on which resources, initiatives, locations, or services may no longer be sustainable. On the flip side, it allows decision-makers to target marketing efforts, roll out new service lines, and improve productivity by streamlining workflow and eliminating inefficient processes.

To help contain costs, health care organizations can do more than identify and mitigate unforeseen shifts in volumes, resources, contracts, and quality measures; in the process, they can also more easily identify and action ways to improve the clinical outcomes of their patients.

Martin’s Point Health Care offers a perfect example. As a not-for-profit organization, the company has to be conscious of delivering services to its 126,000 members and patients in the most cost effective way possible, without compromising quality, health outcomes or experience of care. The challenge of making people healthier and more satisfied while driving down medical expenses is never easy. But with business analytics in place, Martin’s Point is producing clinical profiles of its patients and alerting physicians about potential gaps in care to prevent complications and reduce patient risks. For example, if a patient with diabetes needs specific tests done in a timely fashion, a report alerts the patient’s primary care provider that the missing tests should be scheduled. The same technology is used to identify and track health plan members at risk for developing chronic disease or suffering a serious event such as a heart attack or stroke.

This heightened, proactive insight capability helps Martin’s Point continually monitor performance and implement improvements quickly and precisely to improve health outcomes, increase customer satisfaction and contain costs of care.

The foundation for growth

As health care organizations plan for future growth, they must find ways to cut costs, improve efficiencies and reallocate resources to achieve optimal levels of patient care. This requires a commitment to swap out inefficient processes in favor of new models capable of driving ongoing performance. Using predictive analysis, managers can then develop action plans for variable future outcomes, making the organization more agile and responsive to unforeseen circumstances.

Realigning priorities is a difficult task, but choosing the right strategy is easier when key decision-makers have access to valuable information insights that paint a complete and accurate picture of organizational performance. Business analytics empowers users to transform raw data into new intelligence. It can help health care organizations make crucial decisions, which ultimately ensures they continue to provide high-quality care to the communities they serve.

With the 32 million new patients U.S. health care reform is expected to add to an already strained system, health care organizations will need as much agility as they can get.

Susan D. Noack is worldwide health care executive, business analytics at IBM.

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