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WHILE HEALTHCARE ORGANIZATIONS are flooded with data, many organizations struggle with how to use that data to their advantage. The healthcare industry generates as much as 30 percent of the world's stored data.1 Data analytics must be employed for any organization to make full use of their data for decision-making and strategic planning. Researchers have found that companies that adopt data-driven strategies often have six percent higher profits and five percent higher productivity than their competition.2 Healthcare companies can directly benefit from using data analytics in strategic planning in terms of cost reduction, improved quality and outcomes, and improved coordination of care.
Using Analytics to Reduce Cost
Don't be afraid of data. The first step in making a financial decision should be all individuals involved in strategic planning, such as health information management (HIM)/information technology (IT) managers and senior administrators, accessing and reading financial reports created via data analytics. The detailed reports are meant to provide evidence for managers and leaders in organizations to make transformative changes. Connecting the dots between cost centers and translating data to address cost drivers-such as over utilization, unnecessary emergency room visits, hospital admissions, and duplicate ancillary services-is fundamental.
Take, for example, a surgical practice that analyzes their cholecystectomy episode of care (EOC) report and finds that the total cost of care (also known as TCOC) is above the acceptable limits. If the practice were to continue like this, they could potentially incur financial losses. The healthcare organization must decide whether to discontinue providing operations, take a loss, or make a change.
Financial analysis of the surgical practice's cost centers illustrates a significant difference between hospital and outpatient surgical center costs. Based on data analysis and clinical knowledge, a strategic plan could be developed. For example, the surgical organization could decide to relocate a portion of future patients (who met clinical criteria) from the hospital to the outpatient surgical center. This new change would allow patients to continue to receive surgical services, reduce episode (bundled)...