According to a Health Affairs article, when orthopedic surgeons at six major health systems were asked to identify the cost of 13 commonly used orthopedic devices, fewer than one in five could estimate the actual cost within 20 percent accuracy. Further, despite a common narrative that doctors are only concerned about outcomes, more than 80 percent of…
The Biggest Challenges in Community Care: 5 Questions with the CFO of CGH Medical Center
Three years ago, CGH Medical Center began their journey towards integrating their clinical data, decision-support, long-range financial planning and operating budget information. Today, this progressive acute care facility in Northern Illinois ranks high for delivering quality care and patient satisfaction to the community it serves. After a major expansion in 2008, the community hospital now offers a suite of surgical rooms, a new Obstetrics Department and Birthing Center, a new Critical Care Unit, and new Digestive Health Center. In 2015, they added a state-of-the-art Emergency Department. Adopting new technologies focused on improving the patient experience, CGH Medical Center offers exclusive service lines and cutting-edge medicine to the community it has served since 1909.
Ben Schaab, CGH Medical Center’s Chief Financial Officer, has helped to lead the effort to serve the community while keeping an eye on quality and margins. He recently spoke with Becker’s about how his community hospital leverages analytics to make the right financial, clinical, and operational decisions for their community, their employees, and their facilities.
Note: These responses have been edited for length and clarity.
Question: What do you think are the biggest challenges in healthcare today?
BS: For community and rural hospitals, there are a number of challenges. Drug costs have increased nationally by about 30-40% year-over-year for the last three years. Medicare reimbursements are decreasing and commercial reimbursements stay at fixed rates. Rural populations are serving a mix of about 50% Medicare and 20% Medicaid patients, which puts the impetus on the cost structure.
Our hospitals are often the only or one of the only hospitals serving our community, which means that if we try and cut back or forego a service line, it can have a big impact on that community. If we stop offering something, the patient might have to drive an hour or two to access that service or specialty, which negates our mission as a community organization.
Question: What are your organization’s biggest challenges around analytics?
BS: The biggest challenge around analytics at a community or rural hospital has got to be the speed at which we’ve ramped up access. In the old days, it was difficult to tie clinical data to claims data, because it would have been a long, manual process without the advanced analytics to do it.
Now, we have access to that clinical and claims data and we can see the whole picture. We can leverage that data during contract negotiation. We can also use clinical data for patient populations not necessarily tied to decision support.
As community hospitals, we are responsible for patient populations that may not have stable access to the social determinants of health, so we work to spearhead educational programs and other kinds of support. We now utilize analytics to help us try and support these populations and provide the highest quality of care to them.
Question: 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? Is there an expectation that non-finance leaders leverage?
BS: We do provide operational, service line, and clinical leaders with access to financial performance information on a regular basis, but it comes down to the presentation of the data.
Hospital staff have gone from having access to nothing to having access to everything, so it becomes about drilling down into the data to make the right assumptions about it. We try and enable our leaders outside of finance to view and understand the data by providing as simple a presentation as possible.
What are some examples of key business decisions that are informed by cost and margin-based data at your organization?
BS: We are making decisions on staffing and operations using our cost and margin-based data. Often, our clinical or operational needs are at ends with our need to make financial decisions. But we need to be stewards of our finances to drive those clinical and operational needs.
Question: What do you see as the barriers for healthcare systems trying to reduce care and cost variation?
BS: In healthcare but especially in the community and rural hospital space, the biggest barrier to making an impact and reducing cost variation is the fear of diminishing quality. It’s always a challenge, but to reduce cost we also need to drive process improvement.
We have to hone in on what’s affordable and what can help us nourish margins. It’s the right thing to do for the industry. In other industries, and even in ours, there are a lot of silos, but the great thing is that hospitals and healthcare systems tend to share their data. It’s how we learn. We can all benefit from that.