As we enter a new decade, everyone is searching for something to truly change the game in healthcare over the next 10 years. To find that answer, an estimated 50,000 people headed to San Francisco this week for the prestigious J.P. Morgan Healthcare Conference. Every one of them is placing big bets on who will win and lose in the future of healthcare. The shortcut to figuring this out is actually a question — or 10 questions to be more precise. And what matters most is whether or not the right people are asking and answering those questions.  

While the prophets are ever present and ever ready to pitch their promises in every corner of the city, the pragmatists head up to the 32nd floor of the Westin St. Francis Hotel to hear from the CEOs and CFOs of close to 30 of the largest and most prestigious providers of care in the country. Why? Remember, this is an investor conference and if you want to understand any market, the first rule is to follow the money. And if you want to understand the future business model of healthcare, you better listen closely to the health providers in that room and take notes. 

What providers are saying matters to everyone in healthcare

Healthcare is the largest industry in our economy with over $4 trillion spent per year. Healthcare delivery systems and healthcare providers account for over $2 trillion of that spend, so that feels like a pretty good place to start, right? For that reason alone, it’s critical to listen closely to the executives in those organizations, as their decisions will affect the quality, access and cost of care more than any other stakeholder in healthcare.

Some will say that what they saw this year from healthcare providers was more of the same, but I encourage you to ignore that cynicism and look more closely. As the futurist William Gibson once said, “The future is already here — it’s just not evenly distributed.” The potential for any health system to drive major change is certainly there and the examples are everywhere. The biggest blocker is whether they are asking the right questions. One question can change everything. Here’s proof. 

The stunning power of and need for good questions 

Last year I titled my summary “The #1 Takeaway from the 2019 JP Morgan Conference – It’s the Platform, Stupid.” The overwhelming response to the article was pretty surprising to me  — it really resonated with leaders. One example was Jeff Bolton, the chief administrative officer of Mayo Clinic, who told me that the article had inspired their team to ask a single question, “Does Mayo need to be a platform?” They answered the question “yes” and then took aggressive action to activate a strategy around it. Keep reading to learn about what they set in motion. 

Soon after, I had a discussion with John Starcher, CEO of Cincinnati-based Bon Secours Mercy Health, one of the largest health systems in the country, who shared with me that he is taking his team off site for a few days to think about their future. It occurred to me that the most helpful thing for his team wouldn’t be a laundry list of ideas from the other 30 healthcare delivery systems that presented, but rather the questions that they asked at the board and executive level that drove their strategy. Any of those questions would have the potential to change the game for John’s team or any executive team. After all, if you’re going to change anything, the first thing you need to do is change is your mind. 

The wisdom of the crowd 

So, I set out to figure this out: If you were having a leadership or board retreat, what are the 10 questions you should be asking and answering that may change the future of your organization over the next 10 years? I didn’t have the answers, so I decided to tap into the wisdom of the crowd, listening to all 30 of the nonprofit provider presentations, spending additional time with a number of the presenters and reaching out to dozens of experts in the market to help define and refine a set of 10 questions that could spark the conversation that fires up an executive team to develop to the right strategy for their organization. 

A special thank you to a number of the most respected leaders in healthcare who took their time to contribute to and help think through these questions: 

  • Mike Allen, CFO of OSF Healthcare (Peoria, Ill.)
  • Jeff Bolton, CAO of Mayo Clinic (Rochester, Minn.)
  • Robin Damschroder, CFO of Henry Ford Health System (Detroit)
  • JP Gallagher, CEO of NorthShore University HealthSystem (Evanston, Ill.)
  • Kris Zimmer, CFO of SSM Health (St. Louis) 
  • Wright Lassiter, CEO of Henry Ford Health System (Detroit)
  • Mary Lou Mastro, CEO of Edwards-Elmhurst Health (Warrenville, Ill.)
  • Dominic Nakis, CFO of Advocate Aurora Health (Milwaukee and Downers Grove, Ill.) 
  • Dr. Janice Nevin, CEO of ChristianaCare (Newark, Del.)
  • Randy Oostra, CEO or ProMedica (Toledo, Ohio)
  • John Orsini, CFO of Northwestern Medicine (Chicago)
  • Lou Shapiro, CEO of Hospital for Special Surgery (New York City) 
  • John Starcher, President & CEO, Bon Secours Mercy Health (Cincinnati)
  • Vinny Tammaro, CFO, Yale New Haven Health (New Haven, Conn.)
  • Bert Zimmerli, CFO of Intermountain Healthcare (Salt Lake City)

Here are the top 10 questions from the 2020 J.P. Morgan Healthcare Conference

Based on the wisdom of the crowd including the 30 nonprofit provider presentations at the 2020 JP Morgan Healthcare Conference, here are the Top 10 Questions that every CEO needs to answer that may make or break their next 10 years.

1. Business model: Will we think differently and truly leverage our “platform?” As referenced earlier in this article, this was the major theme from last year — health systems leveraging their current assets to build high-value offerings and new revenue streams on top of the infrastructure they have in place. Providers are pivoting from the traditional strategy of buying and building hospitals and simply providing care toward a new and more dynamic strategy that focuses on leveraging the platform they have in place to create more value and growth. Mayo Clinic is an organization that all health systems follow closely. Mayo adopted the platform model around their ‘digital assets’ into what they refer to as Mayo Clinic Platform, which initially targets three game-changing initiatives: a Home Hospital to deliver more health in the home even for high acuity patients, a Clinical Data Analytics Platform for research and development and an Advanced Diagnostics Platform focused on predictive analytics, using algorithms to capture subtle signals before a disease even develops. Children’s Hospital of Philadelphia, one of the top pediatric hospitals in the world, is leveraging their platform to drive international volume, where revenue is 3.5x more per patient. They are also making investments in cell and gene therapy, where their spinoff of Spark Therapeutics returned hundreds of millions of dollars back to their organization. Both organizations were clear that any returns that they generate will be re-invested back into raising the bar on both access to care and quality of care.

2. Market share: Are we leveraging a “share of cup” strategy? Starbucks had dominant share in the market against Caribou Coffee, Peet’s Coffee and Dunkin’ Donuts. Instead of solely focusing on how to grab a little more market share, they reframed the definition of their market. They called it “share of cup” meaning that anywhere and any time a cup of coffee was consumed, they wanted it to be Starbucks. In that definition of the market, they had very little share, but enormous growth potential. Hospital for Special Surgery in New York is the largest and highest volume orthopedic shop in the world. Their belief is that wherever and whenever a musculoskeletal issue occurs, they should be part of that conversation. This thinking has led them to build a robust referral network, which 33 percent of the time leads to no surgical treatment. So instead of fighting for share of market in New York, they have a very small share and a very big opportunity in a “share of cup” approach. NorthShore University Health System in Illinois has taken a similar approach on a regional level, converting one of their full-service hospitals into the first orthopedic and spine institute in the state. The results have exceeded expectations on every measure and they already have to increase their capacity due to even higher demand than they originally modeled. 

3. Structure: Are we a holding company or an operating company? There has been a tremendous amount of consolidation over the last few years, but questions remain over the merits of those moves. The reality is that many of these organizations haven’t made the tough decisions and are essentially operating as a holding company. They are not getting any strategic or operational leverage. You can place all health systems on a continuum along these two endpoints — being a holding vs. an operating company — but the most critical step is to have an open conversation about where you’re at today, where you intend to be in the future, when you’re going to get there and how you’re going to make it happen. Bon Secours Mercy Health’s CEO John Starcher shared, “It makes sense to merge, but only if you’re willing to make the tough decisions.” His team hit the mark on every measure of their integration following their merger. They then leveraged that same competency to acquire the largest private provider of care in Ireland, as well as seven hospitals in South Carolina and Virginia. Northwestern Medicine has leveraged a similar approach to transform from a $1 billion hospital into a $5 billion health system in a handful of years. Both of these organizations prioritized and made tough decisions quickly and each has created an organizational competency in executing efficiently and effectively on mergers and acquisitions. 

4. Culture: Do we have employees or a team? Every organization states that their employees are their most important asset, but few have truly engaged them as a team. Hospitals and healthcare delivery systems can become extraordinarily political, and it’s easy to see why. These are incredibly complex businesses with tens of thousands of employees in hundreds of locations and thousands of departments. Getting that type of organization to move in the same direction is incredibly challenging in any industry. At the same time, the upside of breaking through is perhaps the most important test of any leadership team. JP Gallagher, CEO of North Shore University Health System, shared his perspective that, “Healthcare is a team sport.” The tough question is whether or not your employees are truly working as a team. Christiana Care provides care in four states — Delaware, Maryland, Pennsylvania and New Jersey. They have taken a unique approach that they frame as “for the love of health,” incorporating the essence of what they do in every communication both internally and externally, in their values and in their marketing. In a multi-state system, it is tricky to create a caring and collaborative culture, but it’s critical and they’ve nailed it. Their CEO shared that, “If you lead with love, excellence will follow.” That’s not only well said but spot-on. Creating a world-class team requires not only loving what you do, but the team you’re part of.

5. Physicians: Are our physicians optimistic or pessimistic? There’s a lot of concern about “physician burnout” with a reflex to blame it on EHRs, cutting off the needed conversation to dive deeper into where it really comes from and how best to address it. The challenge over the next decade is to create an optimistic, engaged and collaborative culture with physicians. In reading this, some will react with skepticism, which is exactly why leadership here is so important. One suggestion I was given was to make this question edgier and ask, “Are our physicians with us or not?” However the question is asked, the bottom line is that leadership needs to find a way to turn this into a dynamic, hyper-engaged model. A little while back I spent the day with the leadership team at Cleveland Clinic. At the end of the day, their CEO Dr. Tom Mihaljevic was asked what he would tell someone who was thinking of going to medical school. He said he would tell them that, “This is absolutely the best time to be a doctor.” His answer was based on the fact that there has never been a time when you could do more to help people. He wasn’t ignoring the challenges, he was simply reframing those issues as important problems that smart people need to help solve in the future. Those who adopt that type of optimism and truly engage and partner with their physicians will create a major competitive advantage over the next decade.

6. Customer: Do we treat sick patients or care for consumers? Words matter here – patients vs. consumers. Most hospitals are in a B2B, not B2C, mindset. Patients get sick, they try to access care, they check into an ER, they get admitted, they are treated, they get discharged. People get confused, anxious and concerned, then they seek not only care, but simplicity, compassion and comfort. With half of America coming through their stores every week, Walmart is already the largest provider organization that no one thinks of as they provide ‘consumer’ care, not ‘patient’ care. But they are starting to broaden their lens, and health systems will need to make moves as well. Competing with Walmart, CVS and other consumer-centric models will require a different mindset. I think Dr. Janice Nevin, the CEO ChristianaCare, captured this really well when she said, “Our mindset is that our role is to ensure everything that can be digital will be digital. Everything than can be done in the home will be done in the home.” Henry Ford Health System CEO Wright Lassiter commented, “Trust is the fundamental currency in healthcare.” Building that trust will require a digital experience in the future that is just as compassionate and caring as what health systems strive to deliver in person in the past. 

7. Data: Will we make data liquid? The most undervalued and misunderstood asset of health systems may be their data. While some at the conference refer to this as having the economic equivalent of being the “oil of healthcare,” the real and more practical question is whether or not your organization will make data liquid, available and accessible to the right players on your team at the right time. Jeff Bolton from Mayo commented that, “The current model is broken. Data and tech can eliminate fragmentation.” In a recent Strata survey, we asked leaders in health systems whether they had access to the information they needed to do their job, and 90 percent said no. For many health systems, data is a science project, hidden behind the scenes primarily used for research and impossible to access for most stakeholders. The call to action is activating that data to improve clinical outcomes, operations and/or financial performance. 

8. Cost: Are we serious about reducing the cost of care and delivering value? Affordability is a hot topic, and for good reason, as high deductible plans, price transparency and other factors have accelerated its urgency. As Intermountain Healthcare CEO Dr. Marc Harrison shared, “We have an absolute responsibility to make healthcare affordable.” While the consumer side will be a moving target for some time, the No. 1 challenge for hospitals right now is to lower their cost structure so they can compete more effectively in the future. Advocate Aurora HealthBaylor Scott & White Health, CommonSpirit Health and many others are targeting cost reductions of over $1 billion over the next few years. As most hospitals are now in a continuous process to reduce cost in order to compete more effectively in the future, organizations like Yale New Haven Health in Connecticut have implemented advanced cost accounting solutions to better understand both cost and margins. Yale is using this data to understand variation, supporting an initiative that drove over $150 million in savings. Additionally, they have combined cost data with clinical feeds from their EHR to understand the cost of harm events, which turn out to be 5x more expensive. As more providers take on risk, having a “source of truth” on the cost of care will be essential. Advocate Aurora Health CFO Dominic Nakis shared that, “We believe the market will continue to move to taking on risk.” Many of the presenting organizations shared that same perspective, but they won’t be able to manage that risk unless they understand the cost of care for every patient at every point of care across the continuum every day.

9. Capital: Do we have an “asset-light” strategy? Traditional strategy for health systems was defined primarily by what they built or bought. Many hospitals still maintain an “if you build it, they will come” strategy at the board level. Yet, Uber has become the biggest transportation company in the world without owning a single car and Airbnb has become the biggest hospitality company in the world without owning a single room. These models are important to reflect upon as healthcare delivery systems assess their capital investment strategy. Intermountain Healthcare CFO Bert Zimmerli refers to their overall thought process as an “asset-light expansion strategy.” In 2019, they opened a virtual hospital and they have now delivered over 700,000 virtual interactions. The number of virtual visits at Kaiser Permanente now exceeds the number of in-person visits at their facilities. With that said, there will be a balance. I really like how Robin Damschroder the CFO of Henry Ford Health System framed it: “We believe healthcare will be more like the airline and banking industry, both of which are fully digitally enabled but have a balance of ‘bricks and clicks’ with defined roles where you can seamlessly move between the two. Clearly, we have a lot of ‘bricks’ so building out the platform that integrates ‘clicks’ is essential.” 

10. Performance: Do we want our team to build a budget or improve performance? The most significant barrier to driving change that many organizations have baked into their operating model is their budget process. The typical hospital spends close to five months creating a budget that is typically more than $100 million off the mark. After it’s presented to the board, it is typically thrown out within 90 days. It creates a culture of politics, entitlement and inertia. According to a Strata survey of 200 organizations, close to 40 percent are now ditching the traditional budget process in favor of a more dynamic approach, often referred to as Advanced Planning. OSF HealthCare leverages a rolling approach, radically simplifying and streamlining the planning process while holding their team accountable for driving improvement vs. hitting a budget. When it comes to driving performance, SSM Health CEO Laura Kaiser captured the underlying mindset that’s needed: “We have a strong bias toward purposeful action.” Well said, and it certainly applies to all of the questions here among the top 10.

5 additional questions to consider

As you would imagine or might suggest, the questions above can and in some cases should be replaced with others. Additional critical questions to answer that came from the group included the following:

  1. Competition: Who else will we compete with in the future and are we positioned to win?
  2. Digital health: Are we going to be a “digital health” company, providing tech-enabled services?
  3. Affordability: How are we making care more affordable and easier to understand and access?
  4. Social determinants: Is this a mission, marketing or operations strategy?
  5. Leadership: Have we made the tough decisions we need to make, and will we in the future?

Start asking questions

The point here isn’t to get locked into a single list of questions, but rather to force your team to ask and answer the most important and challenging ones that will take you from where you are today to where you want to be in the future. After reviewing these questions with your team, the one additional question you need to consider is one of competency: Do you have the ability and bandwidth to execute on what you’ve targeted? In the end, that’s what matters most. While there are many interesting opportunities, too many teams end up chasing too much and delivering too little.

The next 10 years can and should be the best 10 years for every health system and every healthcare provider, but making it happen will require some really tough questions. “The current path we’re on will leave us with a healthcare delivery model that is completely unsustainable,” stated Randy Osstra, CEO of ProMedica Health System. “We need to take meaningful action toward creating a new model of health and well-being — one that supports healthy aging, addresses social determinants of health, encourages appropriate care in the lowest cost setting, and creates funding and incentives to force a truly integrated approach.”

Strong leaders are needed now more than ever. The rest of healthcare is watching, not just professionally but personally. We are all grateful to you for the extraordinary and often heroic care that you deliver without hesitation to our family and friends every day both in our communities and across our country. But now we all need you to not only deliver care, but a new and better version of healthcare. So, ask and answer these and other tough questions. We know you will do everything that you can to help make healthcare healthier for all of us over the next 10 years.

Dan Michelson is the CEO of Chicago-based Strata Decision Technology. Mr. Michelson has authored recaps of JP Morgan Healthcare conferences for the past several years for Becker’s. Read his account of the 2019 event here, 2018 event here and the 2017 event here.

Presenting organizations during non-profit provider track of the 2020 JP Morgan Healthcare Conference included Advocate Aurora Health, Ascension, Baylor Scott & White Health, Bon Secours Mercy Health, Children’s Hospital of Philadelphia, ChristianaCare, City of Hope, CommonSpirit Health, Cottage Health, Geisinger, Henry Ford Health System, Hospital for Special Surgery, Intermountain Healthcare, Jefferson Health, Mass General Brigham, Mayo Clinic, NorthShore University Health System, Northwestern Medicine, NYU Langone Hospitals, OSF HealthCare, ProMedica Health System, Providence St. Joseph Health, Seattle Cancer Care Alliance, Seattle Children’s, SSM Health and UC Health.

© Copyright ASC COMMUNICATIONS 2020.

StrataJazz® Solution for Healthcare Financial Planning, Decision Support and Performance Improvement Recognized for Overall Effectiveness, Quality, and Value

Chicago – Sept. 25, 2019 – Strata Decision Technology (Strata), a pioneer and leader in the development of cloud-based financial planning, analytics and performance tools for healthcare, has once again achieved the Healthcare Financial Management Association’s (HFMA) “Peer Reviewed by HFMA®” designation following rigorous review of its StrataJazz® application.

This is the seventh year in a row that Strata StrataJazz has earned the coveted designation from HFMA. Currently used by over 1,000 hospitals and 200 healthcare delivery systems across the U.S., StrataJazz is a single, modular, cloud-based platform that brings healthcare providers a “financial flywheel” to better plan, analyze and perform, driving margin to fuel their clinical mission.

“We are extremely proud to once again receive this important seal of approval from HFMA, the leading and largest healthcare finance association,” said Dan Michelson, Chief Executive Officer for Strata. “It’s especially gratifying that the number of our customers who would recommend us continues to be ahead of others and on a steady upward trajectory. That’s the best possible testament to the value that healthcare providers realize through both our solutions and our services.”

The HFMA community has more than 43,000 members, including healthcare finance leaders and professionals from hospitals and health systems, provider organizations, physician practices and payers. HFMA’s Peer Review process provides healthcare financial managers with an objective, third-party evaluation of business solutions used in the healthcare workplace. The rigorous, 11-step process includes a Peer Review panel review composed of current Strata customers, prospects who have not made a purchase, and industry experts.

The Peer Review status of StrataJazz and its performance claims are based on effectiveness, quality and usability, price, value, and customer and technical support. Key findings from the process include:

  • 100 percent “agree” or “strongly agree” that StrataJazz has enhanced productivity; that it provides accurate data; that sales and technical support provide good service; and that product updates are easy to install or incorporate
  • 96 percent “agree” or “strongly agree” that the application is easy to use (0% disagree)
  • 92 percent of peers “agree” or “strongly agree” that they would recommend StrataJazz to colleagues (0% disagree)

“We’re pleased to have Strata Decision Technology renew their HFMA Peer Reviewed designation,” said HFMA President and CEO Joseph J. Fifer, FHFMA, CPA. “The HFMA Peer Review process assures our members, through a rigorous evaluation, that the reviewed healthcare business solution meets an objective, third-party assessment of overall effectiveness, quality, and value.”

About HFMA

The Healthcare Financial Management Association (HFMA) is the nation’s premier membership organization for healthcare finance leaders. HFMA builds and supports coalitions with other healthcare associations and industry groups to achieve consensus on solutions for the challenges the U.S. healthcare system faces today. Working with a broad cross-section of stakeholders, HFMA identifies gaps throughout the healthcare delivery system and bridges them through the establishment and sharing of knowledge and best practices. We help healthcare stakeholders achieve optimal results by creating and providing education, analysis, and practical tools and solutions. Our mission is to lead the financial management of health care.

About Strata Decision Technology

Strata Decision Technology provides a cloud-based planning, analytics and performance platform that is used by healthcare providers for financial planning, decision support and continuous improvement, helping hospitals and healthcare systems bend the cost curve and drive margin to fuel their clinical mission.  Founded in 1996, the Company’s customer base includes over 1,000 hospitals and many of the largest and most influential healthcare delivery systems in the U.S.  The Company’s headquarters are located in Chicago, IL. For more information, please visit www.stratadecision.com.

Feb. 15—Hospitals and health systems are increasingly pushing to better identify and reduce costs of care.

As part of that effort, the HFMA-Strata L7 Cost Accounting Adoption Model, known as the L7 Model, was introduced earlier this week.

HFMA interviewed senior executives with two industry-leading providers to get insight on why cost accounting is seen as increasingly important, what barriers can prevent progress, and steps they have found to improve results.

Proving insight on this subject were Chris Bruerton, FHFMA, assistant vice president, finance at Intermountain; and Chris Donovan, executive director of enterprise analytics at Cleveland Clinic.

HFMA: The model HFMA and Strata released this week aims to help organizations assess their current cost accounting methodology, understand the level of accuracy of their cost data, and benchmark capabilities against peers. Can you tell us why each of those areas are important to your organization?

Chris Donovan: Building a common model to have something to compare against and that we’re all measured against equally will be a huge value. This is especially true not just when you are trying to communicate externally—there’s a lot of discussion about how health care doesn’t understand its costs—but being able to communicate internally to our own organization about the need to invest in this capability and having an external benchmark that other peers and organizations are participating in, and that we can show our progress against, can really help move the needle internally as well.

There’s a ton of people doing really simplistic cost accounting, which is really simplistic ratios of cost to charges (RCC), and doesn’t drive a lot of value and may lead you to make bad decisions instead of better decisions. You might be better off not doing anything, rather than doing some of these really poorly thought-out methodologies.

Benchmarking is the hardest thing to do, but if we can achieve a common understanding of how we apply this and are able to get meaningful cost benchmarks—which is the internal costs to the healthcare system, not an external measure like charges or some RCC methodology, which is typically what I have seen people trying to do benchmarking of costs with—benchmarking can be immensely valuable because everybody is looking to understand how we can take costs out of the healthcare process. Being able to look at high-performers and payers across the industry and see what they are doing and where are we out of whack will be huge for us.

HFMA: Another aim of the new model is to create a roadmap for the actions required to ensure your cost accounting approach meets your strategic needs. Can you give us an example of a strategic need that requires a better cost accounting approach?

Chris Donovan: The clearest strategic example is around care affordability. So, how are we going to drive better value for our customers and patients through high-quality, low-cost healthcare? It’s really hard to do that if you don’t have a clear understanding of what your costs are.

It’s also going to have a pretty strong influence on a lot of strategies around population health management. Again, it comes down to understanding the true costs of delivering care and moving beyond delivering care in individual, acute-based episodes to delivering care to a population.

All of this builds on each other. Being able to understand each acute-care episode cost and how we drive improvement there, and the ability to understand the true costs of treating the population over time and on a longitudinal basis, is predicated on having good cost accounting and a solid understanding of the cost of delivering that care.

It also ties into quality. We have to understand the incremental value of quality and the costs of achieving that quality so we can make smart decisions about where to invest limited resources. We have to understand what the cost is of avoiding a sepsis infection. That’s really hard to do today. But if I can understand it and quantify it, I can derive the resources that are necessary to achieve those quality goals.

HFMA: How can this type of approach to improving costs accounting help your efforts to shift to value-based payment models?

Chris Donovan: The underlying issue of shifting to value-based payment is that as a provider, we’re going to be increasingly taking on risk. Historically in a fee-for-service model we were getting paid for what we were doing, so we didn’t have to be efficient necessarily. We could negotiate rates with the insurance company and do a good enough job of delivering care at those rates to be successful in that.

But in a value-based world, we’re going to be at risk for providing care. And in order to appropriately set the level of risk that we’re willing to take, in order to achieve value in taking that risk—and not lose our shirts—we have to understand the costs of delivering that care. Otherwise, you’re going to enter into agreements that you have no idea if you can manage the risk that you are taking on.

HFMA: In the world of value-based payment, what are the limitations of using time-driven activity-based costing to get cost information for all patients and procedures that can match detailed clinical data, which allows for examining quality on every procedure and for every physician?

Chris Bruerton: This is challenging sometimes. Getting costing data on all patients and procedures and aligning it with detailed clinical data to understand the quality provided is critical in a value-based payment environment. You need to have good data so you can make the right decisions.

At Intermountain, we don’t want to provide the cheapest care; we want to provide the best-value care—the highest-quality and safest care while driving down costs. We don’t ever want to do anything to harm the patient, jeopardize quality, or negatively impact the patient experience.

Identifying unnecessary variation and understanding the cause of it is key to driving out waste and avoidable costs in the organization. If a procedure can be performed at a lower cost, without jeopardizing quality, why wouldn’t you do it that way?

HFMA: What are challenges with traditional time-driven activity-based costing?

Chris Bruerton: I have discussed this with peers around the country that have attempted to do time-driven activity-based costing. What I hear is that philosophically it is a great idea, but it is not easily scalable, is generally focused on a certain procedure or case type, and is very time-consuming. You may not get value out of it when you try to expand that across multiple areas.

If you have the capability within your electronic health record to capture time components of activities, and can then feed that data into an automated costing process, that is definitely the way to go.

HFMA: Is there a need to get more precise and timely cost information to physicians to collaborate more closely with them on the costs of care?

Chris Bruerton: Yes. In our old home-grown costing system, we would update the costing data quarterly. Having automated and more frequent costing information allows you to get it into the hands of physicians and caregivers so they can understand how much the services they provide cost, and if there are opportunities to provide better and more cost-effective care. The more accurate the data they receive and the quicker they get it, the faster that decisions can be made to go after those savings opportunities.

HFMA: Is this kind of cost accounting roadmap likely to benefit certain types of hospitals or health systems, or can even small and under-resourced hospitals benefit from it?

Chris Bruerton: If you have access to data that can improve your costing process and accuracy of costing information, then I think you should use it. If you have limitations with your electronic health record and don’t have access to this data, then you should do the best with what you have. Even progressing one or two levels on the [seven-level] L7 model can make a significant improvement.

If you are an integrated delivery system, then having costing data for different care settings, (such as hospitals, physician groups) will enable you to see the costs across the entire continuum of care. This can help the system drive patients to more cost-effective care settings.

HFMA: What other initiatives is your organization undertaking to improve your cost accounting?

Chris Bruerton: Another initiative that we are doing is called “beyond budgeting” or “dynamic planning.” It’s transforming our financial planning process by transitioning us away from the traditional budget process, which is very detailed and time-consuming, and replacing it with a more nimble and agile process to respond to the ever-changing healthcare environment.

You implement rolling forecasts, do benchmarking, and manage to metrics. A key component of “beyond budgeting” or “dynamic planning” is having good costing information so you can help leaders understand their business and empower them to continually improve their operations, drive out waste, and reduce costs. Reducing costs, without sacrificing the quality of care, is critical to being successful in a value-based, at-risk environment.

CHICAGO, February 11, 2019 —The Healthcare Financial Management Association (HFMA) and Strata Decision Technology (Strata) today launched the HFMA-Strata L7 Cost Accounting Adoption Model™ (L7 Model), healthcare’s first roadmap to help healthcare providers access accurate cost data via the use of advanced cost accounting. Originally designed for 200 leading healthcare delivery systems, the L7 Model is now being open-sourced, making it available at no charge to all healthcare providers.

Understanding the Cost Crisis in Healthcare and the Need for Advanced Cost Accounting

An estimated $3.6 trillion, or over $10,000 per person, is spent on healthcare in the United States every year, twice the average of comparable countries.  However, a recent survey found 90 percent of those responsible for the delivery of care don’t know the cost of it. Currently, less than 10 percent of hospitals and healthcare delivery systems have advanced cost accounting systems capable of providing accurate cost data across the continuum of care. While hospitals and health systems represent roughly $1.8 trillion of the annual spend on U.S. healthcare, their average net operating margins have dropped below 3 percent, with close to 30 percent operating at a loss. The challenge they are faced with is how to reduce variation, waste, and inefficiency to invest in and improve care—without any access to trusted data on the cost of care. A 2013 Harvard Business Review article by Michael Porter and Thomas H. Lee shared the perspective that, “Without understanding the true costs of care for patient conditions, much less how costs are related to outcomes, health care organizations are flying blind in deciding how to improve processes and redesign care.”

The need to understand cost is becoming even more mission critical as the business model of healthcare continues to shift from fee-for-service to more capitated and risk-based payment models. Traditional healthcare cost accounting methods were not designed for value-based payment. The lack of trusted cost information is driving the rapid adoption of more advanced cost accounting applications that make cost data more accurate, accessible, and actionable. The ability to drill down into the costs associated with bundled services, specific patient groups, or practice patterns can help decision makers better understand variation and costs related to variation—and make changes that will improve value.

Introducing the HFMA-Strata L7 Cost Accounting Adoption Model

In response to an unmet need for strategic cost accounting guidance as the healthcare industry transitions to value-based payment and to actively managing the total cost of care, HFMA and Strata are collaborating to release the L7 Cost Accounting Adoption Model. Analogous to the way the HIMSS Electronic Medical Record Adoption Model (EMRAM) served as a roadmap for accessing better clinical data, the HFMA-Strata Cost Accounting Adoption Model will help providers access accurate and more actionable data on the cost of care.

The L7 Model will help hospitals and healthcare delivery systems measure the adoption and utilization of advanced cost accounting methods, including time-driven and activity-based costing. The model provides an industry standard for helping hospitals and healthcare delivery systems:

  • Assess their current cost accounting methodology, understand the level of accuracy of their cost data, and benchmark capabilities against peers, and
  • Create a roadmap for the actions required to ensure their cost accounting approach meets their strategic needs

“As hospitals and healthcare delivery systems move toward value-based payment structures, they will need to leverage cost accounting in a much more strategic fashion,” said HFMA President and CEO Joseph J. Fifer, FHFMA, CPA. “To effectively improve their cost accounting capabilities in a rapidly changing and complex setting, health systems need a roadmap to ensure their approach meets their strategic needs.”

Each level of the cost accounting model builds upon the prior level, deploying more extensive data sets and dynamic methodologies to help an organization increase the extensibility and accuracy of their cost data. As an organization moves up to the next level, more sophisticated costing processes and workflows are deployed, generating more meaningful and accurate output. The model also assesses current gaps in source system data to help standardize and automate data capture. At the base of the model are healthcare organizations with a basic cost accounting tool that deploys ratio of cost-to-charge (RCC) methods. An organization that is at Level 7 has expanded the use of time-driven costing to all clinical areas and engages clinicians with the cost data to help drive performance improvements.

“All healthcare providers recognize that understanding the cost of care is mission critical and that a clear set of standards related to cost accounting is a requirement,” stated Dan Michelson, CEO of Strata Decision Technology. “We feel privileged to be able to play a part in helping healthcare providers better understand the cost of care so they can use that data to reduce waste and invest in what matters most to the patients they serve and the care providers they support.”

Strata has earned top honors as the KLAS Category Leader for Business Decision Support and Cost Accounting for five consecutive years and recently authored the book, Margin + Mission: A Prescription for Curing Healthcare’s Cost Crisis.

 

Using the HFMA-Strata L7 Cost Accounting Adoption Model

Watch the webinar to review the structure of the L7 Cost Accounting Adoption Model and become familiar with the self-assessment tool. Hear the best practices for developing an L7 Roadmap.

To download a copy of the model and register for the webinar, please go here. You can also request a complimentary Cost Accounting Adoption Assessment to help your organization determine their current level and receive recommendations on building out a strategic roadmap.

 

About HFMA
The Healthcare Financial Management Association (HFMA) is the nation’s premier membership organization for healthcare finance leaders. HFMA builds and supports coalitions with other healthcare associations and industry groups to achieve consensus on solutions for the challenges the U.S. healthcare system faces today. Working with a broad cross-section of stakeholders, HFMA identifies gaps throughout the healthcare delivery system and bridges them through the establishment and sharing of knowledge and best practices. The Association helps healthcare stakeholders achieve optimal results by creating and providing education, analysis, and practical tools and solutions. Its mission is to lead the financial management of health care.

 

About Strata Decision Technology

Strata Decision Technology provides an innovative cloud-based planning, analytics and performance platform that is used by healthcare providers for financial planning, decision support and continuous improvement. Founded in 1996, the Company’s customer base includes 1,000 hospitals and many of the largest and most influential healthcare delivery systems in the U.S. The Company’s StrataJazz® application is a single integrated software platform that includes modules for strategic planning, capital planning, operational budgeting, management and productivity reporting, decision support and continuous improvement. The Company’s headquarters are in Chicago. For more information, please visit www.stratadecision.com.

 

Contacts:

HFMA: Karen Thomas, [email protected], 708.492.3377

Strata Decision Technology: Christie Markiewicz, [email protected], 217.531.2604

 

CHICAGO, IL, January 31, 2019 — Strata Decision Technology (Strata), a pioneer and leader in the development of cloud-based financial planning, analytics and performance tools for healthcare, announced today that StrataJazz® earned top honors as the 2019 KLAS Category Leader for Business Decision Support in the 2019 Best in KLAS: Software and Services report for the fifth consecutive year with a score of 93.3 out of 100.

The annual Best in KLAS report ranks healthcare IT software and services vendors across multiple market segments with ratings based on tens of thousands of healthcare provider interviews that KLAS conducted throughout the year.  “Category Leaders are committed to providing the very best technology, service, and guidance to providers and payers,” said Adam Gale, President of KLAS.  “The Category Leader award carries with it the voice of thousands of providers and payers, highlighting outstanding vendors who have raised the bar.”

According to a recent survey conducted by Strata and Becker’s Healthcare, 90% of healthcare leaders have little to no access to accurate and actionable information on the cost of care, making it extremely difficult to reduce variation, waste and inefficiency.  StrataJazz is currently used by over 1,000 hospitals and 200 healthcare delivery systems across the U.S. and has become the “gold standard” for understanding the cost of care via Advanced Cost Accounting.

“We are incredibly proud to be the #1 Business Decision Support solution in KLAS for the fifth consecutive year. It is extremely rare for any company to deliver at a world-class level for their customers this consistently,” stated Dan Michelson, Chief Executive Officer of Strata. “Advanced Cost Accounting has become a mission critical application for hospitals and healthcare delivery systems.  Accurate, accessible and actionable information on cost is now seen as a requirement to improve both financial and clinical outcomes, allowing providers to reduce variation and eliminate waste.”

In addition to receiving the #1 ranking for Business Decision Support as KLAS Category Leader for five consecutive years, Strata has also been named to the Becker’s Healthcare’s list of Great Places to Work five consecutive times.

KLAS collects both quantitative and qualitative feedback from healthcare providers. The following are selected commentaries; please visit www.klasresearch.com for a complete view:

  • “Strata Decision Support has been amazing from the very beginning. The support people are great and have quick turnaround times with any issues. If we can’t get ahold of them, they always call us back even without knowing the details about the issue. Our partnership is valuable to Strata Decision Technology, and they prove that every time we reach out to them.” (Director, June 2018)
  • “Strata Decision Technology is very oriented toward customer service. They hire extremely smart people. I have been impressed by their knowledge of the product and by their problem solving. Strata Decision Technology strives to be innovative and stay ahead of the curve. They don’t wait around or become stale by basking in their success. They are really focused on innovating and advancing the product in ways that the customers want.” (Director, May 2018)
  • “We really like StrataJazz Decision Support and have been very satisfied with it. We have been live for several years, and it has revolutionized the way that we have been able to access information quickly. Processes that used to take us several days to complete now take us less than an hour to complete.” (Director, May 2018)
  • “StrataJazz Decision Support is basically everything that I was looking for. Once it is set up, the maintenance is easy. We don’t have a lot of staff members, so we need something really seamless. Strata Decision Technology maintains the tool, so we don’t have to have servers here and so forth. All of the upgrades are handled by the vendor. The tool doesn’t require a lot of IT or fiscal support once it is implemented.” (VP/Other Executive, May 2018)
  • “Strata Decision Technology is the epitome of good customer service and is always on top of things.” (Director, June 2018)
  • “Seeing our users get involved with decision support because of the product is exciting. In the past, the decision support was done by others. However, now we have trained our users to run the analytics themselves and get the reports they need. This has been very effective.” (Manager, Jan 2019)
  • “Strata Decision Technology provides excellent support. They are very flexible, and the system is user friendly. We can conveniently get to different fields, manipulate the data, and build dashboards to provide snapshots of information to our senior leadership.” (Analyst/Coordinator, June 2018)
  • “Strata Decision Technology has been exceptionally responsive to our needs.” (Executive)
  • “I think that Strata Decision Technology is very willing to work with a client to make something happen.” (Manager, Oct 2018)
  • “The system supports data integration well. Bringing in large amounts of data is much simpler now than it was with our previous budget and previous system. The system runs certain calculations extremely quickly, and we can run cost models much more efficiently now. We can use the system to model our complex contracts, and that helps us make better decisions.” (Analyst/Coordinator, Oct 2018)
  • “The system has amazing dashboards that we can set up, and we can save the dashboards as PDFs or give people access to look at them.” (Director, Oct 2018)
  • “StrataJazz Decision Support is really heavy on analytics and a lot of dashboards. It is very easy to use, and someone without a programming background can easily create a report.” (Manager, March 2018)
  • “The approach Strata Decision Technology has taken during the implementation is phenomenal. They came to our implementation with templates on how to use the product. That was really a nice touch. It wasn’t like they were winging the implementation.” (VP, May 2018)
  • “StrataJazz Decision Support is way ahead of our old system. When we were shopping around, a lot of the products were really slick, but the people and expertise at Strata Decision Technology really sold me on the product.” (Director, May 2018)
  • “I am very impressed with Strata Decision Technology’s new releases and their openness to user input. They work with other hospitals, and they partner with Epic because many of their clients use Epic’s systems. They are open to sharing information and creating user groups to gather input and learn from customers.” (Director, March 2018)
  • “We use StrataJazz Decision Support to meet our needs for accounting, budgeting, contract management, and financial planning. It is the best system we have used for cost accounting, and we love the reporting in the system. (Director, March 2018)
  • “We have had a very positive experience with Strata Decision Technology. Looking back, I am glad that we made the decision to move forward with them because the product has just been very good for us.” (Director, March 2018)
  • “With vendors I have used in the past, there has usually been one superstar willing to go the distance to help achieve a successful implementation and go away as soon as the product has gone live. That has not been the case with Strata Decision Technology. There has been an entire team of superstars willing to go the distance beyond the go-live no matter the time of day. Strata Decision Technology is a great partner and really teams up with us. Even high-level executives regularly interact and work with us. The whole team has been involved even before the signing of the deal, so it has been seamless to keep working with the team. We hired Strata Decision Technology for a specific need, and they have built a great product for us and gone above and beyond in helping us with other product needs as well.” (Manager, March 2018)
  • “The clients have a way to suggest ideas, and people from all of the vendor’s clients can vote on those ideas. The whole system is very open. People determine how helpful or successful ideas are, and then the most favorable ideas are actually added into the system. The vendor goes through this idea process on a very regular basis.”  (Director, Feb 2018)
  • “Strata Decision Technology’s customer service is incredible. The resources take ownership, and we don’t have to follow up on requests; the resources do what they say they will do and meet their deadlines. Other vendors can take months and lots of follow-up to do what we ask them to do. Strata Decision Technology doesn’t have to extend deadlines on their promises. They are very honest. They are always extremely professional and very responsive when I reach out.” (Manager, March 2018)
  • “Our experience with StrataJazz Decision Support is going very well. The feedback from the user end has been very positive. We are definitely excited about where the product will take us. I really appreciate this new tool because it has taken away some of the workload. We used to do a lot of things manually and enter data into the system because we could not upload files. So having the product has been a huge boost in technology for our team. The product enables us to turn things around much quicker.”  (Director, Feb 2018)

2014-2019 Best in KLAS: Software and Services report, January, © KLAS 2019.

About KLAS
KLAS is a data-driven company on a mission to improve the world’s healthcare by enabling provider and payer voices to be heard and counted.  Working with thousands of healthcare professionals, KLAS collects insights on software, services and medical equipment to deliver reports, trending data and statistical overviews. KLAS data is accurate, honest and impartial. The research directly reflects the voice of healthcare professionals and acts as a catalyst for improving vendor performance. To learn more about KLAS and the insights we provide, visit www.klasresearch.com.

About Strata Decision Technology
Strata Decision Technology provides an innovative cloud-based financial analytics and performance platform that is used by healthcare providers for financial planning, decision support and continuous improvement.  Founded in 1996, the Company’s customer base includes 1,000 hospitals and many of the largest and most influential healthcare delivery systems in the U.S.

The Company’s StrataJazz® application is a single integrated software as a service platform that includes modules for capital planning, continuous improvement, contract modeling, cost accounting, cost management, decision support, financial forecasting, management reporting, operational budgeting and performance improvement and strategic planning.  The Company’s headquarters are in Chicago, IL. For more information, please visit www.stratadecision.com.

CHICAGO, IL, October 25, 2018 —Top U.S. healthcare delivery systems came together this week for Lift18—The Strata Decision Summit, the three-day Strata Decision Technology (Strata) user’s conference focused on helping healthcare organizations leverage financial planning, analytics and performance applications in support of their clinical mission.  The Summit included 650 attendees from 115 healthcare delivery systems across the country and comes at a time when hospitals are under severe financial pressure.

While hospitals represent roughly 33% or $1.2 trillion of the total $3.6 trillion spent annually on U.S. healthcare, their average net operating margins have dropped below 3% with close to 30% operating at a loss.  At the same time, less than 10% of healthcare providers have access to accurate cost data via an advanced cost accounting solution, making it very difficult for them to identify variation and waste in order to reduce the cost of care.

During the Summit, Strata announced the availability of Time-Driven Costing (TDC™) to help healthcare systems better understand their cost and margins in support of their clinical imperatives.  TDC is a feature within StrataJazz®, the market’s top-rated application for advanced cost accounting and financial decision support. Over 100 U.S. based healthcare delivery systems have or are in the process of deploying StrataJazz for advanced cost accounting, which includes the TDC capability.

“Our customers are working together to implement best practices in order to drive more value for their providers, their organization and the community that they serve.  During the Summit we discussed the playbook that top organizations are using to become a Center of Excellence for financial planning, analytics, and performance to address their most significant challenges and most important priorities,” said Dan Michelson, Chief Executive Officer of Strata Decision Technology.  “There has never been a time when physicians could do more to help patients or when administrators could do more to help physicians.  The resources are there, we just need to make sure we use them wisely.  Understanding how to leverage those finite resources as effectively as possible is why capabilities like Time-Driven Costing are so mission critical.”

The TDC capability within StrataJazz allows providers to extract time-based data from existing systems in an automated fashion, allowing for more accurate and detailed costing.  The application has included time-driven features in the past but has now expanded the coverage to include TDC for surgery, anesthesia, physician time, clinical time, emergency department, nursing, imaging as well as more traditional time-driven activity-based costing.  TDC enables organizations to understand operational costs beyond traditional cost accounting.  Issues related to capacity utilization, resource analysis in physician use of support staff time, and the associated impact on clinical outcomes can automatically be tracked.

Strata has earned top honors as the KLAS Category Leader for Business Decision Support for four consecutive years.  KLAS is viewed as the Consumer Reports for digital health and their research is based on thousands of healthcare provider surveys and interviews conducted throughout the year.

Additional highlights from the three-day event include the following:

CHRISTUS Health Wins 2018 LEAP Award

CHRISTUS Health, a not-for-profit health system based in Dallas, Texas, was named the winner of the 2018 LEAP Award.  CHRISTUS Health is comprised of more than 600 services and facilities, including more than 60 hospitals and long-term care facilities as well as 350 clinics and outpatient centers.  A Strata customer for 20 years, CHRISTUS was recognized for their work in analytics to gain a comprehensive view of the true cost and margins across episodes of care, service lines and patient populations and for their collaboration with their clinical and administrative staff in using this data to improve clinical and financial outcomes.  The LEAP Award recognizes healthcare organizations for outstanding performance in the areas of finance and strategy to benefit both their organization and the community that they serve.

Children’s Hospital of Philadelphia Receives the 2018 Development Partner Award

Children’s Hospital of Philadelphia (CHOP) is the nation’s first hospital devoted exclusively to the care of children.   As transparent pricing continues to be a priority for states and for the Centers for Medicare and Medicaid, the ongoing collaboration between CHOP and Strata will help providers understand their cost, as well as develop and communicate their pricing to patient families in a more succinct and effective way.

Keynote Highlights Bringing Moneyball to Medicine

The Keynote for the conference was Paul DePodesta the subject of best-selling book MoneyballHis story of helping turn the Oakland A’s, the worst team in baseball with lowest payroll, into baseball’s best team revealed the stunning and hidden power of data and analytics to make a difference.  Healthcare providers have learned that data by itself doesn’t add much value.  Other industries including professional sports are decades ahead of healthcare in applied analytics, using data in a practical way to solve problems and overhaul stagnant systems.

Strata provides the healthcare industry’s leading cloud-based, modular platform for planning, analytics and performance.  With a client base of over 1,000 hospitals, Strata provides attendees the opportunity to meet with peers and discuss best practices across a spectrum of topics related to driving change in healthcare. Notable organizations presenting included Advocate Aurora Health, Akron Children’s Hospital, Anderson Regional Medical Center, Augusta Health, Baptist Health, Children’s Health in Dallas, Children’s Hospital of Philadelphia, CHRISTUS Health, John Muir Health, Maine Health, Mercy Health, OSF Healthcare and The Ohio State University Wexner Medical Center amongst others. 

About Strata Decision Technology

Strata Decision Technology provides an innovative cloud-based planning, analytics and performance platform that is used by healthcare providers for financial planning, decision support and continuous improvement.  Founded in 1996, the Company’s customer base includes 1,000 hospitals and many of the largest and most influential healthcare delivery systems in the U.S.

The Company’s StrataJazz® application is a single integrated software platform that includes modules for strategic planning, capital planning, operational budgeting, management and productivity reporting, decision support and continuous improvement.  The Company’s headquarters are in Chicago, IL. For more information, please visit www.stratadecision.com.

Contact:  Rachael Britnell, [email protected], 312.827.7711

As healthcare organizations seek to tap into data for actionable insights, they are looking outside of healthcare for best practices. One of the world’s most well-respected minds on the use of data analytics to drive change is someone you may know, but likely have never heard of — Paul DePodesta.

Mr. DePodesta was famously profiled in the book and hit movie Moneyball. This true story of turning the worst team in baseball — with lowest payroll — into baseball’s best team revealed the stunning and hidden power of how data and analytics can make a difference.

In the movie, the unsung hero is an analyst played by actor Jonah Hill — a character based on Mr. DePodesta’s time with the Oakland Athletics. In the early 2000s, Mr. DePodesta was assistant to the general manager for the Oakland A’s, where he helped to pioneer the use of analytics to build a better baseball team. But Mr. DePodesta’s affinity for data started much earlier, when he began working as an advance scout with the Cleveland Indians in the 1990s.

“The advance scout is the one who goes out and watches all of opponents before you play them,” Mr. DePodesta told Becker’s Hospital Review. “At end of the first game I walked back to my office quarters and thought I was wholly unprepared to do this job … I thought, ‘Who is going to listen to a 23-year-old who hasn’t played professional baseball, and doesn’t have the benefit of all this experience and insight?’ I was rattled.”

As Mr. DePodesta continued scouting for the Cleveland Indians, he realized he didn’t have to provide the players with insights — he could gather data from the opponents’ games, and report back to his team. “Rather than being a columnist, I was going to be court stenographer and just record the action and report on the action,” he said.

“For instance, rather than saying you should throw sliders to this hitter with two strikes, I could say this hitter is one for 24 on sliders with two strikes, and then allow you to do with that information whatever you like,” Mr. DePodesta continued. “I started digging deeper and deeper into the data, and I realized there was a treasure trove of information. It really astounded me.”

Today, he is bringing the Moneyball concepts to football in his role as the chief strategy officer for the Cleveland Browns — a team that recently made headlines for winning their first game in almost two years.

Mr. DePodesta, who is slated to keynote the Strata Decision Summit Oct. 24 in Chicago, is now nationally known and sought after expert on applying data to drive changes. At the Strata Decision Summit, he will discuss how he’s used analytics throughout his career with the MLB, and how that journey led him to bring his experience to the NFL.

“For me, Paul’s work is a great example of how the thoughtful, collaborative use of data can fundamentally change the game,” Dan Michelson, CEO of Strata Decision Technology, told Becker’s Hospital Review.

“At this point, no one would question that folks in the front office as well as managers and players are more effective when they have data in their hands,” he added. “They now draft players, as well as coach and play the game, completely differently. Given what’s at stake in healthcare, both clinically and financially, we all have a responsibility to bring the concepts of Moneyball to medicine.”

Becker’s Hospital Review caught up with Mr. DePodesta to discuss his time with the Oakland A’s, how he addresses industry leaders who are skeptical of shaking up traditional processes, and his tips for applying data insights in any industry.

Editor’s note: This interview has been edited for length and clarity.

Question: What were some struggles you encountered in the early days, when you were first taking steps into analytics?

Paul DePodesta: It really is a sea change in how you think about decision-making. You get a lot of pushback from different areas — people who have been doing it a certain way for a long time, or an industry doing it a certain way for a long time. You get push back from people who are hugely successful in their field, who have a framework for how they’ve done things. Then, there is also human psychology. There are all sorts of biases built into human decision-making — some of them are valuable, which is why they are so deeply ingrained, but the reality is a lot of this work in analytics ends up both exposing and coming into conflict with those mental shortcuts that we almost all employ daily. Those are obstacles we faced then, still face today and will continue to face going forward.

Q: Can you give an example of a time when analytics contradicted a cognitive bias?

PD: Recency bias really plays prominently in sports. We expect whatever happened recently is more likely to affect what happens going forward, or more likely to be status quo going forward. When you are playing 162 baseball games, what someone has done in the last three to five days features prominently in your mind, even if that person may have a 10-year career behind them that — taken as a collective — is much more predictive of future performance. Has this guy “lost it” because he’s two for 20 over the last five days, even though he’s been good enough to maintain a 10-year career in the major leagues? We’re human, so it happens to all of us.

Q: What is your response to people who say, “But this is the way we’ve always done things”?

PD: When Thomas Paine wrote Common Sense to advocate for democracy in the late 1700s, it was not widely accepted — it was a pretty controversial piece of literature at the time. In second edition he wrote a forward, where he said that a long habit of not thinking that something is wrong gives it the superficial appearance of being right. That continues to be true today. When I’m confronted with someone saying that, I try to preempt those conversations by proactively putting that out there. But what I don’t want to do is indict what they’ve been doing for a long time. There is probably a reason they have been doing it, and that reason might have been a really, really good reason once upon a time. As times and circumstances change, it’s important to change our processes along with it.

Q: To keep coaches with you as you introduce new ways of thinking and strategizing, you need to not completely indict what they’ve done in the past. Can you talk more about that?

PD: Absolutely. Going further, you really need to gain insight into why those things were done in the past and what made them successful, rather than dismissing them as being outdated now. There could be some valuable insights in there that help whatever new model or process you’re trying to create. These people’s experiences and expertise are invaluable as you continue to try to build something that is new and better. We had a lot of conversations with our experienced baseball personnel — people who had deep knowledge of a particular piece of the puzzle, say our pitching coach, which ended up back in our algorithms or models. It’s a process we’ve gone through in the NFL, trying to pull as much knowledge as we can from all these people who have a tremendous amount of expertise.

Q: Across other industries, how would you recommend people reexamine tasks or functions that could be better leveraged with data-driven insights and decision-making?

PD: Anything that involves a good dose of uncertainty can benefit from analytics or some type of data and analysis. For us in sports, it is the fundamental principle that we are trying to predict the future performances of human beings. It’s true for a lot of different industries too; everyone is dealing with uncertainty and trying to get their arms around what the future is going to look like or what they ought to do in a particular situation. In all those circumstances, if you have the right data and insights, it can help you consistently make better decisions. Not that it will help you be perfect by any stretch, hopefully just consistently better.

Q: Right now, in healthcare, data isn’t shared. Looking across an organization with a couple thousand physicians, what are the first steps you would take to make data actionable?

PD: There are two things I’d initially focus on, and they are awfully broad. The first is, what is it you would like to know that you don’t currently know? What piece of information would be valuable to you in making a decision you have to make that you don’t currently have? We asked ourselves that in Oakland and we continue to ask this all the time. The second question is, what is it you are sure you know? Whatever those things are, make sure you go back and study them to verify whether they are actually true.

There was an exercise we went through in Oakland, where there were all these clichés in our industry that we had grown up to believe as true, and at one point we decided to study everything. In my experience, 80 percent to 90 percent of things believed to be true are in fact true and continue to be true. But there is this small percentage where maybe it isn’t true anymore, and if you come up with a new process or better insight in that small percentage, that can lead to significant advantages. It gives you a tremendous advantage over your competition, because the rest of the industry continues to believe something is true, when in reality it is not, or it’s not true anymore

In this special Speaker Series, Becker’s Healthcare caught up with Frank Stevens, vice president of consulting services at Strata Decision Technology.

Mr. Stevens will moderate a panel at Becker’s Hospital Review 7th Annual CEO + CFO Roundtable, titled “Budgeting for Operations and Capital in a Changing World,” at 1:30 p.m. on Monday, Nov. 12. Learn more about the event and register to attend in Chicago.

Question: What keeps you excited and motivated to come to work each day?

Frank Stevens: I am a nerd. I love puzzles, trivia and problem solving.  I also love working with others to solve a problem, especially when each member of the team brings a unique strength to the table. I am fortunate to work in healthcare which is full of complex, messy and ever-evolving problems. I get to solve those problems working with a great team and in an industry that values a collaborative, collegial environment.

Q: What initially piqued your interest in healthcare?

FS: In my late teens, I underwent a major surgical procedure — I was actually one of the first patients to undergo a new approach. My surgery was successful, but the individual scheduled right after me ran into serious, life-threatening complications. In that moment and at an early age, I experienced the tremendous impact healthcare has or will have on our lives. Later, I found a passion for technology and innovation. Quite honestly, I stumbled upon Strata Decision Technology, where healthcare, technology and innovation intersected. It was a perfect match.

Q: What is one piece of professional advice you would give to your younger self?

FS: Do not get too “up in your head” about what you do not yet know. To some extent, we are all just trying to figure it out. Instead, pick a problem that really interests you and be prepared to go deep. You will be surprised by how far curiosity and drive will take you. Run toward those things that scare you.

CHICAGO, April 16, 2018 — Becker’s Healthcare, one of the leading sources of information for the healthcare industry, has named Strata Decision Technology (Strata) to its list of the “Top Places to Work in Healthcare” for the fifth consecutive year.  Strata Decision Technology provides an innovative cloud-based financial planning, analytics and performance platform that is used by healthcare providers to help drive margin to fuel their clinical mission.  Strata adds this latest honor to a growing list of awards that includes being ranked #1 in KLAS as the Category Leader for Business Decision Support for the last four years.

“Being recognized by Becker’s Healthcare for the fifth year in a row is incredibly exciting and great recognition of the unique culture we are building at Strata,” said Dan Michelson, Chief Executive Officer at Strata.  “Our mission is to ‘help heal healthcare’.  With the cost of healthcare in the U.S. now averaging over $10,000 per year for every person, delivering on that goal is more important than ever.  I am incredibly proud of our team and we will continue to do everything to ensure every person on our team is given the opportunity to grow and help make a difference for our customers and our company.”

The prestigious list highlights hospitals, health systems and healthcare companies that promote diversity, employee engagement and professional growth and have gone above and beyond to be an exceptional place to work.  The organizations featured on this list offer benefits and opportunities for employees to build successful careers above and beyond the average healthcare provider or company; they encourage professional development and promote leadership from within.  Many members of the list offer unique wellness and personal benefits to ensure employees strike a positive work/life balance as well as employee recognition programs to highlight their accomplishments.

“Our focus is to create a culture that allows our team to grow, serve, celebrate in support of our customers and our mission,” added Heidi Farrell, Vice President of Team Development at Strata.  “Our folks are passionate about our company and our team – they speak openly about how much they respect and enjoy the people they work with every day.   We strive to create an environment that truly allows our team to do their most inspired work.  We are truly honored that effort is being recognized.”

Strata has a long client list that also received recognition from Becker’s including: Advocate Healthcare (IL), BayCare Health System (FL), Bon Secours Health System (MD), Boston Medical Center (MA), Carilion Clinic (VA), Children’s Health (TX), Children’s Healthcare of Atlanta (GA), Children’s Hospital of Philadelphia (PA), Cleveland Clinic (OH), Covenant Health (TN), Gunderson Health System (WI), Hospital for Special Surgery (NY), Intermountain Healthcare (UT), MemorialCare (CA), New York-Presbyterian Hospital (NY), Methodist Health System (TX), Nemours Childrens Health System (FL), Northshore University Health System (IL), Northwell Health (NY), Northwestern Medicine (IL), Orlando Health (FL), ProMedica (OH), RWJBarnabas Health (NJ), Sharp HealthCare (CA), Saint Luke’s Health System (MO), UnityPoint (IA), University of Missouri Health Care (MO), University of Texas Medical Branch (TX), UPMC Pinnacle (PA), UW Health (WI), and Virginia Hospital Center Health System (VA).

View the entire Becker’s list here.

About Becker’s Hospital Review
Becker’s Hospital Review is a monthly publication offering up-to-date business and legal news and analysis relating to hospitals and health systems. Articles are geared toward high-level hospital leaders, and we work to provide valuable information, including hospital and health system news, best practices and legal guidance specifically for these decision-makers. Each issue of Becker’s Hospital Review reaches more than 18,000 people, primarily acute care hospital CEOs, CFOs and CIOs.

About Strata Decision Technology

Strata Decision Technology provides an innovative cloud-based financial planning, analytics and performance platform that is used by healthcare providers to help drive margin to fuel their clinical mission.  Founded in 1996, the Company’s customer base includes 1,000 hospitals and 200 of the most prestigious healthcare delivery systems in the U.S.

The Company’s StrataJazz® application is a single software as a service platform that includes modules for capital planning, continuous improvement, contract modeling, cost accounting, cost management, decision support, financial forecasting, management reporting, operational budgeting, performance improvement and strategic planning.

The Company’s headquarters are in Chicago, IL. For more information, please visit www.stratadecision.com.

Over 40,000 stakeholders from every corner of healthcare descended on Las Vegas this week for the 2018 Healthcare Information Management Systems Society Conference.  A convention of this size and scale can be a “lions and tigers and bears, oh my!” type of scary.

Products from 1,300-plus companies are coming at you from every angle with promises of artificial intelligence, machine learning and, of course, seamless integration and interoperability. Presentations from care providers are showing you how they cracked the code on quality or cost while glossing over the steps to help you and your organization actually get there. In other words, it’s easy to not just lose your money but your mind in Vegas during HIMSS.

So, I set out to ignore the hype of the flavor of the day and instead do some detective work to better understand the real problems that need to be solved and the technologies that hold the promise to help.

Having attended HIMSS for the last 18 years (gulp), I decided to completely avoid the sessions and the vendor booths and instead have hallway and sit-down conversations with 50 different healthcare providers to get their perspective. Mission accomplished —  I spoke to CIOs, CMIOs, and CTOs, as well as leaders of population health, data analytics and decision support for many of the top healthcare delivery systems, academic medical centers and medical groups in the country.

The big takeaway from these 50 conversations was the collective, “Amazon and Apple and Uber, OH MY!” buzz in the halls of HIMSS. The recent announcements that Amazon, Apple and Uber are getting into healthcare captured everyone’s attention with the hope of a new casino game that is a guaranteed winner.

While the idea of a wizard with a magical potion to fix healthcare is pretty intoxicating, healthcare providers are understandably and justifiably skeptical. All insiders recognize that the actual ideas these three innovative tech companies just announced aren’t exactly new. Each represents an area — group purchasing via Amazon, employee clinics by Apple and transportation via Uber — that is currently covered in some form or fashion.

So, then why such a big buzz?

In full candor, I was planning on writing an article about the fact that while each of these announcements is intriguing and has the potential to drive an improvement to the current condition, all stakeholders would agree that it will take much more to truly heal healthcare. While I still think that this basic premise is true, after the 50 conversations I had, I came to understand something else. While individually these companies may not turn healthcare on its head, the collective announcements are waking people up to the fact there is a better way of doing things and that if they don’t innovate, someone else will.

In other words, whether or not these three companies will deliver true transformation in the future is still TBD, but they are absolutely providing motivation right now. And this is huge.

Why is this outside influence so critical in this industry? The simple truth is that healthcare delivery systems are incredibly complex multibillion dollar operations with tens of thousands of employees. All businesses of this size and scale, both inside and outside of healthcare, have an extremely hard time being nimble and are always at risk for innovation happening on the edge of their business model. So, while group purchasing, employer clinics and transportation are not burning platforms for any executive team in a hospital today, when they see the names Amazon, Apple and Uber playing in those spaces, these areas immediately become board level agenda items and initiatives.

Of course, there were many other topics that came up in these 50 conversations that are also intriguing and actionable for healthcare providers right now. Some that came up consistently, in order of how actionable they are right now for most organizations, are the following:

  • The cloud is now the destination for seemingly every provider, for everything.
  • Advanced cost accounting is now an absolute requirement to support value-based contracts.
  • Telehealth is now mainstream, with every health system at various stages of deployment.
  • Cybersecurity is now a board level imperative with providers looking to collaborate.
  • Predictive analytics is now driving both operational improvements and clinical decisions.
  • Artificial intelligence is now possible because the data set is now accessible.
  • Voice-driven hospital rooms are actively being tested.
  • Blockchain is being tested for contracts, sharing patient information and managing supply chain.
  • Virtual reality is finding practical use cases for everything from improving clinical training to patient rehabilitation.

The list goes on and on with many more buzzwords that I left out (machine learning, precision medicine, genomics, etc.), but the encouraging message is that healthcare providers are actually getting pretty practical about using technology to really make a difference in how they deliver care.

There is a great line from a Tracy Chapman song All That You Have is Your Soul that goes “don’t get tempted by the shiny apple.” While it is easy to be attracted to simple ideas, healthcare is an incredibly complex industry with an overwhelming number of problems that need to be solved. And truly solving these problems is incredibly challenging work.

With that said, for too long it is has been too easy to accept healthcare’s shortcomings. And that is exactly why Amazon, Apple and Uber can be incredibly helpful — not just in producing ideas, but in providing the inspiration for us to truly take action to help heal healthcare, not in the future but right now.

And if they can do that it would truly be an, “OH MY!”

Dan Michelson is the CEO of Chicago-Based Strata Decision Technology. Dan also recently wrote “Top 12 takeaways from the 2018 JP Morgan Healthcare Conference.”