- Posted by Joe Crandall
- On September 9, 2013
Why is data becoming so important in healthcare now? Besides being the latest victim of immense negative attention, healthcare is making a monumental shift from a volume based business to a value based business. In the past, tracking of metrics was pretty straight forward. An over simplification of the process is:
Today the model is more like:
Even with these immensely oversimplified equations, one cans see that more data is needed. But not just MORE data, but better, more relevant, timely and accurate data is needed. It is also important to see that if a hospital doesn’t continuously improve their internal operations they will begin to see reduced (Medicare) revenues and will lag behind their competitors.
Every industry goes through a period of change that is fueled by some type of driver. The change can be driven by an unsatisfactory status quo, opportunities for greater rewards or by a desire to do something better. Most industries are driven to change through consumer demand or technological advancements. As an industry, healthcare is being driven to better coordinate care, reduce the variation in clinical practices, improve outcomes, increase patient satisfaction, and improve margins while receiving lower reimbursements. These drivers can be separated into two categories; external or internal.
Click the image below to see examples of the questions the healthcare industry is being ask to answer due to the drivers for change. The right side is representative of low maturity organizations with low maturity questions. As we travel to the left the questions become more difficult and require additional organizational HDA maturity. One thing to note is that the drivers are relatively the same for everyone, but the organization’s enabler maturity is what will separate success from failure.
Healthcare’s primary external drivers are a result of the recent federal/state regulations. Participation in these programs (Patient Center Medical Home, Accountable Care Organizations, Value Based Purchasing and Meaningful Use) initially incentivized hospitals for demonstrating that prescriptive metrics were being met. While organizations are reporting a myriad of metrics to the representative agencies, it has only moderately advanced the overall use of data to improve outcomes. External drivers are great at kick starting change, but unless the organization or individual is motivated to continue the change, it will most likely stall. Think of any personal change that you might have undertaken. Let’s say an individual wants to lose weight. They may start a weight loss program because of an arbitrary date (New Years/upcoming social event) but the effects are usually transient. Unless there are strong internal motivators, external change is temporary or minimally achieved and maintained.
The internal drivers originate from stakeholders within a hospital or healthcare system. The most common internal drivers today are: patient safety programs, quality improvement programs and cost reduction initiatives. Most hospital margins in the New Jersey/Pennsylvania/Delware tri-state area are running at 3% below the national average and about 1/5 of of the hospitals are running negative margins – tremendous internal driver for change. External driver can kick start the process, but the internal drivers keep it going with a vengeance. In regards to weight loss, I may be motivated to start a program because I have my 20th reunion coming up. But unless I want to improve my health, reduce negative blood work results or want to set a positive example for my kids, I will most likely fail. When I fail, I get fat and have guilt. When healthcare organizations fail, it impacts an entire community. In rural America, hospitals and the associated healthcare network might be the largest employer in the area.
Success in meeting (or exceeding) both the internal and external drivers share the same common denominator, HDA. In order for a hospital to meet these driver requirements, they must not only report the data, but use it to either reinforce or adjust workflow depending on the data trends.