It’s been said the more things change, the more they stay the same. When it comes to healthcare, the more the model shifts, the more focus needs to be centered on patients, families and managing future populations and their health. Navigating healthcare from a business perspective requires action on multiple fronts: care should be safe, timely, effective, efficient, feasible and patient centered. In order to be successful, healthcare organizations must ensure care delivery is seamless and supported with a foundation that is financially secure and operationally sound, now more than ever.
“The future of healthcare will depend on how organizations are able to maximize value by effectively connecting their financial health with their operational management”
The healthcare business model is on the verge of being turned upside down. Healthcare historically has been a fee-based system focused on volume. But in an attempt to slow or reverse rising healthcare costs and due to the introduction of the Affordable Care Act and cuts in Medicare and Medicaid we’re seeing the introduction of a value-based system: a value-based system measured by metrics of healthcare quality or the aggregate health of a population rather than by the volume of visits, procedures or hospital stays.
And the end result? Data-driven change across the healthcare system intended to improve quality and efficiency while reducing costs.
This has shined a light directly on the financial and operational health of all provider organizations and causes us to re-think how we best coordinate care by connecting people, machines and data. The future of healthcare will depend on how organizations are able to maximize value by effectively connecting their financial health with their operational management. As an industry over the past few years, we have spent a lot of time, effort and dollars digitizing healthcare information around the patient, but now we need to liberate the data out of the different systems and leverage the actionable insights the data can give us to help determine the right signals to caregivers, physicians and administrators.
Let’s examine the opportunities and challenges that lay ahead, as there is renewed emphasis on the pillars of financial management and healthcare operations.
Being Financially Fit
Providers must ask themselves how their organization is performing financially today and how they are going to manage financially the shift from fee for service to fee for value. CEO’s and CFOs are demanding an enterprise-wide approach to financial and risk management and putting the CIO front and center to deliver that.
Healthcare finance faces plenty of uncertainty, but revenue cycle management and clinical quality are areas that consistently offer improvement opportunities to limit losses. Most healthcare organizations are challenged with balancing the responsibilities of taking on risk, while delivering solid patient outcomes and ensuring accuracy in clinical and financial reporting. However, the solutions can be found in the hospitals that are incorporating the technology tools that proactively monitor and care for defined patient groups through data aggregation, risk stratification, care coordination and patient outreach Meanwhile, as healthcare organizations work to improve collection rates, collection times and drive profitability, solutions that manage capitated contracts, process claims in house, and install proper preventative measures for new payment models will help determine the sustainability of that organization.
Ultimately, the goal is to more closely tie together and manage a system’s cost of care with revenue coming in, to build a financially disciplined care organization.
It’s Not Business As Usual
While financial management is critically important for a healthcare organization to monitor, for decades hospitals have had to sacrifice the quality of care being delivered by focusing resources on things like inventory, scheduling and compliance issues. For example, providers have uncontrollable amounts of paper charts and file cabinets. Clinical managers who ideally should devote the vast majority of their time to patient careoften spend hours performing manual administrative tasks, including staff scheduling. In fact, it is estimated that manually creating a single schedule via paper or Excel spreadsheet can take anywhere from 12 to 20 hours per schedule period for a senior-level clinician in a 50-physician practice.
These paper-based activities not only get in the way of productivity, they also have the potential to introduce costly under-staffing or over-staffing errors that could go undetected for long periods of time. Even in hospitals and provider networks where the paper processes have been largely digitized, we still see Clinical managers spending hours looking at a screen to enter data versus looking at their patient to provide care.
Ironically, operations may not be the first thing in a healthcare system that comes to mind in the transition to value-based care, but it is increasingly being seen as an area for innovation.
By placing greater emphasis on technology solutions combined with the on the ground “know-how” of nurses and practitioners, it’s possible for the most important elements of hospital operations, such as workforce management, to become more sophisticated. We are already seeing how information collected and insights gained from analytics can better manage the skill mix of a workforce, in turn helping improve an organization’s strategic growth.
It’s critical for healthcare organizations to better understand their operations in order to better manage the workforce, patients and assets to deliver financially efficient outcomes and reduce unnecessary waste.
In This Together
Healthcare organizations looking for clinical and financial efficiencies should start the process by evaluating technologies that help move information to the right place, measure finances more accurately, and reduce time spent on processing.
These problems are interlinked and, therefore, require solutions that are interlinked as well. We are seeing significant opportunities for software, cloud-enabled business models and analytics capabilities to help reduce waste in the system.
The CIO role within healthcare organizations continues to evolve dramatically, anticipate the introduction of new business solutions of a healthcare organization and potentially solving some of healthcare’s greatest challenges from the inside out.