How Enterprise Performance Management (EPM) is Transforming Healthcare Technology
November 16, 2022
Today, a new category is emerging for healthcare: the Enterprise Performance Management (EPM) system. An EPM system is a healthcare software platform that integrates both financial and clinical views, using these data sources to spark insights with information. Leveraging the clinical data from electronic health records (EHR) and the accounting-based information from enterprise resource planning (ERP) systems, healthcare organizations can enable frontline and operational staff to make more informed decisions. These systems give healthcare leaders and their teams access to information that can help smart people make smart decisions, leveraging clinical and financial data.
By deploying cloud-based EPM systems, you can drive performance and transform your organization in many areas. Adopting a cloud-based EPM system can help you take advantage of your data to empower your teams and drive performance.
As healthcare organizations are adopting EPM systems to connect the dots between their clinical and financial data, it is necessary for these same healthcare providers to make the shift to a performance-driven culture. That means using actionable metrics, contextual analytics and a consistent process to drive performance.
In practice, this also means leveraging a system that can serve up metrics as diagnostic measures of financial performance, helping teams focus on the metrics within a manager’s or leader’s control. Using the EPM tool for contextual analytics enables system users to access information efficiently and effectively, through scorecards and purposeful drill-paths embedded within the tool. Finally, organizations must create a recurring cadence (monthly, quarterly, etc.) for variance reviews to establish and clearly define expectations their teams can continue to work toward meeting.
In this guide, we’ll outline the basic components of a healthcare EPM system, critical considerations for its deployment across your organization, how to optimize the platform to drive value, and how its use will empower your team for future scalability.
The Role of Data in Healthcare
Healthcare leaders are relying on technology and data to effectively manage resources and make critical decisions. Today, it’s expected that all provider organizations have invested in EHRs to automate documentation, orders, clinical communication, billing and more. Many healthcare organizations have deployed or are in the process of upgrading to cloud-based ERPs to manage business processes and transactions, including accounting, supply chain, HR and more. These investments have provided a foundation for teams and their clinical, supply chain and human resource processes.
Think of it like this: your EHR system offers a horizontal, clinical view of patients, while your ERP system provides a more vertical, financial view of accounting-based information.
With such a wealth of data, you could provide your frontline and operational staff with information and insights to improve clinical and financial outcomes. While these systems form the foundation to support your clinical and operational workflow, the lack of integration leaves behind a missing piece in the equation.
To make the connection between these two disparate views, you and your teams need access to a tool that can help smart people make smart decisions using clinical and financial data.
Using the EPM tool for contextual analytics enables system users to access information efficiently and effectively, through scorecards and purposeful drill-paths embedded within the tool.
Developing an EPM Strategy
As healthcare leaders like you continue to adopt and roll out EPM tools to your teams, it’s critical that you consider the use of this new tool as an opportunity to spark transformation across your organization. Many of the healthcare providers we work with have used the introduction of an EPM tool as a chance to “reset” or “restart” and build up their organization’s performance and effectiveness.
Across our network of over 2,000 hospitals and more than 400 health systems, we have identified 5 critical levers that your organization can pull using an EPM system for needed growth and performance. These levers require the integration and alignment of clinical (EHR) and financial (ERP) views that is central to enterprise performance management.
You can use these 5 levers to drive growth and performance as part of an EPM strategy. To enable growth and performance in these areas, integration between clinical and financial data will be critical.
Operate as a System to Create Scale
“We need to plan and manage performance consistently across their entire system (‘systemness’).”
Establish “Centers of Excellence” (Service Lines)
“We need to plan and measure performance by service line (horizontal) and function (vertical).”
Expand Reach via Provider Integration
“We need to plan and drive performance across the continuum and integrate all settings of care.”
Reduce Cost and Quality Variation to Drive Value
“We need to connect financial and clinical data to identify opportunities and drive performance.”
Thrive in Both FFS and Value-Based Arrangements
“We need to reduce the cost of care to better serve our communities and fuel our mission.”
Driving Value with an Optimized EPM Platform
To drive value with your new EPM platform, it’s important to consider how the new investment will impact your organization and teams. From conversations with healthcare leaders across our network, we’ve found that your peers are concerned with what we’re seeing as six consistent needs across all providers as they relate to FP&A:
- A “source of truth” on the cost of care, via advanced cost accounting applications that are more accurate, comprehensive and accessible.
- Analytics solutions to provide information and insight to improve clinical and financial outcomes.
- The ability to collaborate on best practices, benchmarks and research as part of a network with other healthcare providers.
- Cloud-based applications that are easier to deploy, scale and support.
- Platform solutions with different modules that can be deployed to solve different problems.
- The mindset and skillset to ensure you can fully leverage applications that are deployed.
Empowering Your Organization
Today, FP&A teams spend much of their time managing or reconciling data between different systems. They’re taking trial balance data from their ERP and using that to drive planning. They’re taking that same data along with clinical information from their EHR to drive cost accounting. They’re looking at external benchmark sources to integrate into performance reports or even to drive departmental budgets. They’re integrating time and attendance information to drive productivity.
All these connections consume the time and focus of these teams, keeping them from getting to interpret, analyze and make use of that data. Leveraging a more advanced EPM tool can help your FP&A team by giving them access to more accurate and integrated data from across disparate solutions. This can help your team leverage data to drive their decisions, allowing them to spend most of their time making sense of data rather than simply moving it around.
As more and more of your peer organizations are implementing cloud-based EPM systems to advance a larger cloud strategy, we recommend you take advantage of this transition as the chance to spark an overall transformation. Moving from an on-premise solution to an integrated, cloud-based EPM platform will help your organization accelerate in areas of planning and forecasting, leveraging service-line data and developing cost savings initiatives.