Week 02 - Merged Slides.pdf

Introduction The use of healthcare analytics is a top priority for businesses 10% increase in data usability can lead to a $2 billion opportunity for the median Fortune 1000 company ROI for analytic investments can be as high as 1000% Analytics in healthcare have provided value in areas such as clin...

Introduction The use of healthcare analytics is a top priority for businesses 10% increase in data usability can lead to a $2 billion opportunity for the median Fortune 1000 company ROI for analytic investments can be as high as 1000% Analytics in healthcare have provided value in areas such as clinical improvement, productivity management, and revenue cycle management Integration of analytics across domains is still an area of opportunity for greater impact and contribution to the business Adopting a value management approach and institutionalizing best practices in Business Intelligence Competency Centers can help address culture and change management hurdles Enterprise-wide approach needed to understand value leverage and correlations between domains 1 Business Challenges in Healthcare Healthcare costs continue to rise Patient Protection and Affordability Care Act (Obamacare) causing turmoil in the market Organizations must take a value-driven approach to analytics Investments in analytics often overridden in favor of operational or transactional systems Analytics that span transactional systems get short shrift Critical for organizations to have a business-driven analytic strategy that shows value Demonstrating compelling value propositions is crucial for ongoing funding 2 Value Life Cycle 3 Value Life Cycle Source: SAP 4 Healthcare Analytics Value Framework 5 Key Drivers and business goals Key drivers to increase value in healthcare: Revenue growth Operating margin Asset efficiency Organizational effectiveness These levers impact three main business goals or areas: Clinical performance Operational performance Financial performance 6 Revenue Growth Key driver: volume and price metrics Volume metrics: new patient acquisition, existing patient retention and growth Price metrics: increased prices per service, improved profitability per service and per patient Objectives: improved patient acquisition, satisfaction, and retention, improved clinical quality of care, improved provider network management 7 Operating Margin KEY DRIVER OBJECTIVES Reducing general and administrative expenses Increased operational effectiveness and efficiency Improving patient interaction efficiency Reduced operational costs Improving administrative service efficiency Improved provider pay for performance accountability Improving care service development Overall delivery efficiency 8 Asset Efficiency Key driver: PP&E metrics, inventory metrics, receivables and payables management metrics PP&E metrics: improving PP&E efficiency, bed occupancy, and room utilization Inventory metrics: improving inventory efficiency, supplier management, and leakage Receivables and payables management metrics: improving efficiency by reducing bad debt, late charges, and A/R unbilled Objectives: reduced inventory leakage, improved revenue, improved utilization 9 Organizational Effectiveness KEY DRIVER OBJECTIVES Improving management and governance effectiveness Increased operational speed and agility Execution capabilities Improved ROI External factors such as macro- or microeconomic key performance indicators (KPIs) Optimized supply chain and HR costs Improved risk management Regulatory compliance Reduced fraud or abuse leakage 10 Organizational Effectiveness Clinical Performance Operational Performance Financial Performance Objectives Objectives Objectives Improved clinical quality of care Improved patient safety and reduced medical errors Improved wellness and disease management Improved patient acquisition, satisfaction, and retention Improved provider network management Reduced operational costs Increased operational effectiveness and efficiency, Reduced inventory leakage, Improved provider pay for performance accountability, Increased operational speed and agility Improved revenue Improved ROI Improved utilization Optimized supply chain and HR costs Improved risk management and regulatory compliance Reduced fraud or abuse leakage 11 Assignments 12 Readings Textbook: Analytics in Healthcare and the Life Sciences: Strategies, Implementation Methods, and Best Practices Dwight McNeill, Thomas H. Davenport Chapter: 8 Topics : Business Challenges Value Life Cycle Healthcare Analytics Value Framework: Key Drivers 13 Value-based management To secure funding for future initiatives, it is essential to demonstrate actual value achieved from the analytic project. Value-based management approach contains three phases: Value discovery: Develops a value-based business strategy and business case, enabled by technology and aligned with Value Discovery Value Realization Value Optimization corporate objectives. Value realization: Develops transformational strategies to mobilize, deliver, and measure business results based on insights into leading practices or benchmarks. Value optimization: Assesses how the implementation and program compares to best or leading practices and recommends areas where the business can drive more value from current investments. 14 Validating Actionability and Measuring Performance Improvement with KPIs Using KPIs to develop a business case and validate analytic actionability and measurement Analyzing and diagramming goals and objectives to answer business questions and act Key questions to ask: What data is needed? Which KPIs and leading indicators should be monitored? 15 Objective actionability matrix framework applied to nursing productivity Source: SAP 16 Defining and Validating Core Objectives Staff scheduling system had limited analytics and integration capabilities Defined and validated five core objectives for nursing productivity: 1. Compliance with staffing guidelines 2. Patient safety 3. Human resource life cycle improvement 4. Patient safety compliance guidelines 5. Revenue goals 17 Benefits of Dashboards and Reports for Nursing Unit Managers Dashboards and reports helped nursing unit managers anticipate and manage staffing needs and costs "What-if" component allowed them to see the impact of changes on other areas Healthcare organization adopted a primary strategy of increased use of agency staff to reduce permanent staff overtime and burnout, resulting in reduced vacancy rates and related recruiting costs Improved patient satisfaction as permanent staff was less stressed Expanded analytic capabilities helped avoid myopic approaches and improve patient satisfaction, reduce staff injuries and burnout, and decrease budget overruns. 18 Business Intelligence (BI) Performance Benchmarks for IT Healthcare organizations' need to measure and improve BI IT capabilities IT may focus solely on reducing Total Cost of Ownership (TCO), but this is only one part of the value picture. The business case for investment should include business revenue and expense components, as well as TCO. 19 Benchmarking for Effective BI Performance Analytics Once analytic investments are made, benchmarking is an effective way to measure performance Benchmarking can be done internally against best performance and externally against best in class in healthcare and all industries 20 Benchmarking for Effective BI Performance Analytics Effectiveness: Efficiency: Organization: Usage of BI by employees, executives, and external stakeholders (BI Adoption) BI project mix (e.g., reports, dashboards, semantic views) BI organization model Cycle times, reliability, and uptime Size of support organization Level of insights generated through BI usage by business process (BI maturity) BI costs BI technology BI technology leveraged for analytics, data warehousing, and data management Level of centralization Best practices adoption Importance of best practices Current coverage of best practices Importance and coverage gap 21 Example of BI Metrics from ASUG-SAP Benchmark Survey Sample ASUG benchmark report (Source: ASUG, SAP) 22 Using BI Competency Centers to Institutionalize Value BI Competency Centers (BICCs) can institutionalize value management in an organization’s overall BI program Organizations have been forming BICCs to improve operational effectiveness and efficiency, ensure business user satisfaction, and demonstrate BI value BICCs can report to IT or business areas, with responsibility for several key areas of the strategy 23 BICCs Key Responsibilities Development, documentation, and communication of the organization’s overall BI strategy Development of business requirements for a project and prioritizing all projects Defining the business case for each project and identifying supporting capabilities Defining an information taxonomy, architecture, and managing technology tools Managing governance, program management, roadmap, measurement, training, and support 24 BI Strategy Framework Source: SAP 25 Emerging Roles in Value Management KPI ANALYST Helps define key performance indicators, leading indicators, and correlation metrics in the design phase VALUE ANALYST Helps define the anticipated ROI for the business case and validates attained ROI in the post-implementation value assessment COMMUNICATIONS ANALYST Helps broadcast analytic successes including quantitative value 26 Business Performance-Based Approach to Value Shift from simple “on time and on budget” philosophy to value-based one Many companies focus on reducing IT and administrative costs Analytics-driven companies adopt broader performance management approach Develop strategies and accountabilities for business outcomes and value 27 Strategies and Accountabilities Demand Demand that IT investments deliver competitive advantage Focus Focus change on high-impact results Set Set ambitious business goals enabled by ambitious talent Drive Drive accountability through measurement Embrace Embrace a culture of performance obsession 28 Best Practices for Value Management Performance improvement: consistently and proactively measure and compare Justification: formal process involving stakeholders across the business Value realization: design solution to realize value identified in business case Business strategy-IT alignment: collaborate on strategic planning and execution Governance and portfolio management: engage executive leadership for project success 29