As a die hard Chicago White Sox fan, what I am about to share with you is painful. But as a lifelong (over the top) baseball fan and CEO of an analytics company, this is simply too amazing not to share.
A few months ago, Jed Hoyer, the General Manager of the Chicago Cubs, gave a brilliant presentation on the unique strategy the Cubs have deployed over the past five years to create a world-class organization and a World Series level team.
Implementing an Effective Cost Accounting Solution
During a recent HFMA-sponsored webinar, a Decision Support leader at Lafayette General Health (Marysa Kimbodeaux, Director of Decision Support) spoke on how their organization implemented an effective cost accounting system and the ways in which that process impacted their margin improvement, data governance and accountability moving forward.
Read on to learn how Lafayette General Health partnered with Strata Decision Technology to provide their team access to accurate, actionable data and how they used this information to boost accountability and strategic growth moving forward.
One of the greatest challenges to organizations looking to truly understand and identify the costs of providing patient care getting accurate cost data into the hands of leaders and clinicians who could use it. Cost accounting in healthcare requires the merging of cost data with clinical data, to help hospital leaders and physicians leverage that information and accomplish a number of goals: to reduce the cost of care, focus on quality, align to overall strategy, understand cost within the continuum, and help expand value-based care.
When Lafayette General Health (LGH) began to consider a new cost accounting system, they were planning for growth. LGH is the largest nonprofit, community-owned regional health system in Acadiana, with six hospitals (four acute care, two critical access), clinics for 60+ physicians, ambulatory clinics, joint ventures, and clinical affiliations. But when they started, LGH had only their hospitals, and costing maintenance took about two days for their Finance Team to complete when requested Ad Hoc.
Today, the organization’s cost accounting operates differently. Instead of 2 days for maintenance, it can be completed in 2 hours. Reports are created not by the Finance team, but by a user base that can rely on self-service reporting and their cost and decision support acumen.
Over the course of two years, LGH has implemented and sequenced capabilities in data integration, budgeting, decision support, capital planning, management and productivity reporting, and continuous improvement.
LGH relied upon new principals of cost accounting and the HFMA-Strata L7 Cost Accounting Adoption Model™ to implement a new cost accounting system. To build their new cost model, LGH needed to focus on the 3 guiding principals to cost accounting: accuracy, accessibility, and action. Leveraging insights from Strata’s Centers of Excellence playbook, LGH was able to expand their cost accounting functionality to all facilities, implement better data governance, build dashboards for their executives and service-line/operational leaders, and drive more accurate, actionable data.
Leveraging a new cost accounting system, LGH automated system-generated statistics where they previously input data manually, accounted for variable expenses, defined and analyzed patient cohorts, layered topside adjustments and patient-specific costs into profitability reporting, and adjusted reporting and rollout across their operational managers, department directors, service-line leaders and executives.
Looking forward, LGH will be using the HFMA-Strata L7 Cost Accounting Adoption Model™ to help them move toward even more accurate, comprehensive cost accounting, leveraging their data to boost accessibility, automation, and accountability within the organization.