Business Intelligence for Healthcare Organizations: It All Starts with Clinical Data

Analytics capabilities are important tools for hospitals wanting to remain competitive

As hospitals phase in the use of electronic medical records (EMRs), they are capturing unprecedented amounts of patient data. The next challenge for hospital administrators and executives is using that clinical data in ways that can further business and financial initiatives, in areas like marketing, cost cutting, productivity measurement, regulatory compliance, and meeting quality benchmarks that affect reimbursement.

So how does a hospital administrator or executive make the best use of clinical data? To answer this question, it’s necessary to understand some of the critical factors affecting the business of health care today. These include:

  • General population trends. An aging population and increased rates of chronic illness are translating into exploding costs and strained resources at many hospitals today. When hospitals are compensated under a “bundled payment” model rather than the traditional fee-for-service model, it becomes especially critical for executives to understand the factors that drive cost-effective care. Business analytics reporting can help them pinpoint ways to optimize operational processes like supply chain management and workforce management. In addition, data on population health and personal health behaviors can help inform evidence-based marketing efforts.
  • Changes in Medicare reimbursement. Hospitals have been charged with lowering their rates of avoidable readmissions (defined as those that occur within 30 days of discharge and are directly related to the original diagnosis). Those that cannot comply will face a three percent reduction in Medicare reimbursement rates, starting in 2014. Also, Medicare no longer pays for the treatment of certain hospital-acquired infections that are considered preventable – so hospitals must absorb the costs of these. Business intelligence can help hospital leaders manage these reimbursement risks by tracking trends and creating specialized reports in near real-time, rather than several months after the fact.
  • The emphasis on patient satisfaction. The Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS; pronounced as “H-Caps”) is part of Medicare’s new value-based purchasing program, an effort to shift to reimbursement models that pay for high-quality care. HCAHPS itself is a survey instrument that measures patient satisfaction with the hospital experience. It is designed to allow objective and meaningful comparisons between hospitals, in areas that are important to consumers. But perhaps most significantly, the data will be used to determine reimbursement – and hospitals can gain or lose up to two percent of their Medicare reimbursement fees, depending on how well they score. Savvy hospital executives will use this patient satisfaction data not only to drive improvement initiatives, but to inform marketing campaigns and physician relationship management programs as well.
  • Meaningful use guidelines. As these are phased in, hospitals are feeling an intensified need to analyze their care delivery processes and meet requirements in areas like EMRs and reporting for quality initiatives. In the past, hospitals focused on the clinical applications used by doctors and nurses for daily care, but they did not look for trends or patterns in aggregated patient data. Meaningful use will change that and will make patient data more available for business intelligence and marketing uses.
  • The transition to ICD-10 in 2014. According to the American Health Information Management Association (AHIMA), this new diagnostic coding system will “incorporate greater specificity and clinical detail to provide information for clinical decision making and outcomes research.” Once it is implemented, hospitals will need ways to mine this rich source of data for their own quality initiatives. They may also need to analyze its impact on how specific procedures are reimbursed and develop strategies based on these analyses. Business intelligence can provide hospital administrators with access to detailed claims and reimbursement analytics, so they can make sound business decisions while maintaining high standards of care.

Using clinical data to drive business decisions

As you can see, the distinction between clinical data and financial data is becoming blurred, in terms of how data can affect the bottom line. Hospital executives are increasingly in need of insights they can act on, in order to improve both business outcomes and clinical outcomes.

For a real-world example of how this works, consider this case study about a Texas hospital that used predictive analytics to reduce unnecessary readmissions by 22 percent over a six-month period. This strategic use of IT allows them to identify the treatment interruptions and causes that lead a patient back into the hospital after discharge. Physicians are collecting data on specific patient characteristics that did not require re-admission, beyond traditional information, to include ethnicity, socioeconomic groups, the follow-up care received, and how much and how quickly they were able to receive that care, against those who were re-admitted for hospital treatment.”

In a scenario like this, predictive analytics can identify patients at high risk of readmission, so clinicians can step in with interventions designed to keep them out of the hospital. Armed with this kind data, hospitals can then weigh the business case for hiring more case managers to supervise care transitions for these high-risk patients.

C-level executives in particular will need to be deeply involved in promoting the use of business intelligence. In order to truly innovate and lead in broad, strategic planning for their organizations, they will need to truly leverage data to generate business knowledge. Most likely, those who succeed at this mission will be armed with a clear vision of the health care future, and an MBA in health care.

American Sentinel’s online Master of Business Administration Healthcare offers a program designed for current and future health care professionals – from the health care administrator to the vice president of operations – seeking to lead in a rapidly growing and changing industry.