Fairview Health Services Takes a Dive into Cost Information

July 8, 2015

Understanding cost is a problem plaguing hospitals and health systems across the nation. There is a major focus in the industry on providing care more efficiently, but without the right information, health systems are unable to make strides in this area.

All hospitals have cost data, but it is in the general ledger and hardly actionable. For instance, when looking at the information in the general ledger hospitals cannot determine whether a service line is profitable or whether one physician is higher cost than another.

Once a health system implements the tools it needs to access its cost accounting information a new challenge is presented — making sure the information gets in the hands of those who need it.

That was the issue Fairview Health Services, a 6-hospital system based in Minneapolis, was faced with a few years ago. At that time, only certain people within the organization had access to cost accounting information, and if others needed it they had to request it. “The process took too long,” says Marjorie Whittier, manager of decision support at Fairview Health Services. However, the system realized there were opportunities to improve the process and took action.

At the end of September 2013, Fairview Health Services rolled out StrataJazz, a financial platform offered by Strata Decision Technology. Through the use of the platform, cost accounting information was initially made available to the system’s core financial users. Over time, the system made the information available to some select nonfinancial users as well.

About 120 people at Fairview Health Services have access to the system’s cost information, and at least 50 percent of those with access are financial analysts. “Some work specifically for a hospital and another set report through the whole system,” says Ms. Whittier.

With cost information at their fingertips, analysts can look at the information on a more granular level when they need to. “That was our big struggle,” says Ms. Whittier. “People needed to dive deeper.”

Some of the highest level reports the system pulls out are financial reports by service line. Using the system’s financial platform, hospital analysts dig into these reports to compare and identify issues. For instance, if costs have increased for a particular service line, “the analysts can review utilization within specific service lines by physician to determine clinical variation,” says Ms. Whittier.

Taking a proactive approach and addressing cost issues earlier on has been a positive step for Fairview Health Services. There were “a few months of growing pains,” when the system made the change, says Ms. Whittier. However, after that, the system began to see the significant benefit of giving financial analysts access to cost accounting information and the opportunity to access that information at their fingertips.