The line-item budget, an age-old financial planning tool, is no longer welcome at Park Nicollet Health Services in St. Louis Park, Minn. Since 2006, Park Nicollet has used a rolling financial monitoring and forecasting process that eliminates much of the minutiae of preparing a yearly revenue forecast and allocating expenses across it. Today the health…
Health systems’ billion-dollar question: How to get cost data into clinicians’ hands as they decide on a patient’s care?
Like many integrated health systems, OSF HealthCare has a robust analytics team and droves of data. Now its leaders face the next challenge: ensuring that data is in clinicians’ hands as they make decisions about patients’ treatment and care plans.
Kirsten Largent is Vice President, Financial Planning & Analytics for OSF HealthCare, a 13-hospital system with more than 1,200 physicians and advanced practice providers, based in Peoria, Ill. Here, she caught up with Becker’s Hospital Review to discuss the challenges her organization is confronting with analytics, how financial leader are business partnering with clinical leaders, and gaps in data literacy between financial and clinical teams.
Question: What are your organization’s biggest challenges around analytics?
Kirsten Largent: We have a really robust analytics team, but what we’re working through now is how to best review the amount of data we have. I don’t feel like we have a lack of data, but the challenge is how do we use it best and get it into the hands of our clinicians and operators within the organization.
The data-related challenge is mostly around the cost to deliver care — that is top of mind. We have good analytics about what it costs to perform a certain surgery, as an example, and different clinical variations of either the supplies or techniques used. We aren’t great yet at sharing that information with the surgeons directly at the time of care delivery. We believe they are not intentionally using more expensive implants or a procedure that isn’t of highest quality, but maybe they just don’t have that information at their fingertips when making the choice. How do we get that information into clinicians’ hands as they make a decision about patients’ care?
Q: Do operational, service line and clinical leaders have access to financial performance information on a regular basis? If so, to what are they held accountable? If not, why?
KL: This is a work in progress for us. We have reorganized our finance divisions and centralized the true accounting functions, so all of the accounting that was in each of our hospitals is now centralized. We are really asking our financial leaders to business partner with our clinicians and operational leaders, to help them better understand financial information. We have had pockets where we have done that well, but we are really trying to get some standardization around business partnering. We’re fairly new in the process of business partnering, but there’s certainly an appetite for it.
Q: Do you feel there is a gap in data literacy outside of healthcare finance teams around cost and margin analytics?
KL: I see need for business partnering to ensure good understanding of what the cost data is telling us. We’re asking our financial analysts to look at a couple different things when business partnering with our operational and clinical leaders. One is trending activity with an eye on continuous improvement — what does our trend look like, both from a volume and productivity perspective as well as a cost perspective? This helps educate clinicians on the financial impact of that service. What is happening from the revenue or reimbursement perspective? Cost perspective?
Going back to the different clinical variations among our clinicians: If we have a physician or leader who is out of line with other departments, we need to review that benchmarking data to understand if there is variance and why.
Q: If you could make one immediate improvement to how your organization use analytics today, what would that be?
KL: I think that would be to get the information into the hands of those who can act on it in a quick and simple way. We talk a lot about how great it would be if we had an app on our phones to look at some key metrics and get an understanding of our financial picture. One magical change would be getting simple, actionable information into the hands of those who facilitate change.
Q: What are some examples of key business decisions that are informed by cost and margin-based data at your organization?
KL: As healthcare is changing and there are new and innovative ways care is delivered, we are taking time to look at services we provided and the way we provided them. We are relooking at some of that existing business and thinking hard about whether we continue that same practice or if there’s a better way to do it. It may be solid and trending the right way, but we need to have discipline to review it and determine if that’s the way to continue in the future. There might be other Amazon-type companies coming in to disrupt us. If we aren’t ready and thinking about what someone else could do, we’ll be left behind.
Q: What do you see as the barriers for healthcare systems trying to reduce care and cost variation?
KL: There are significant cultural barriers to disrupt ourselves. Another item we think a lot about in finance is the cost of our existing structure. We have these large, expensive hospitals — a lot of bricks and mortar that nobody is interested in from a business sense. But competitors are interested in coming in with telehealth and digital platforms. More and more activity is moving from the inpatient setting to the outpatient, and the inpatient is starting to be challenged.