Business Intelligence and Analytics for Healthcare Organizations
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1 Business Intelligence and Analytics for Healthcare Organizations Scott Wanless and Thomas Ludwig Published by In association with
2 Business Intelligence and Analytics for Healthcare Organizations is published by Ark Group UK/EUROPE OFFICE Ark Conferences Ltd Paulton House 8 Shepherdess Walk London N1 7LB United Kingdom Tel +44 (0) Fax +44 (0) publishing@ark-group.com NORTH AMERICA OFFICE Ark Group Inc 4408 N. Rockwood Drive Suite 150 Peoria IL United States Tel Fax publishingna@ark-group.com ASIA/PACIFIC OFFICE Ark Group Australia Pty Ltd Main Level 83 Walker Street North Sydney NSW 2060 Australia Tel Fax aga@arkgroupasia.com Editor Evie Serventi eserventi@arkgroup.com Head of content Anna Shaw ashaw@ark-group.com Managing director Jennifer Guy jguy@ark-group.com UK/Europe marketing enquiries Robyn Macé rmace@ark-group.com US marketing enquiries Daniel Smallwood dsmallwood@ark-group.com Asia/Pacific marketing enquiries Steve Oesterreich aga@arkgroupasia.com ISBN: (hard copy) (PDF) Copyright The copyright of all material appearing within this publication is reserved by the author and Ark Conferences It may not be reproduced, duplicated or copied by any means without the prior written consent of the publisher. ARK1641
3 Business Intelligence and Analytics for Healthcare Organizations Scott Wanless and Thomas Ludwig Published by In association with
4 Contents Executive summary...ix The healthcare industry's new world...ix About the authors...xiii Acknowledgements...XV Part One Bridging the gap between healthcare informatics and BI Chapter 1: Challenges facing the healthcare industry... 1 Increased demand for services... 2 Resource shortages... 3 Compliance requirements... 4 Financial pressures... 5 Vertical and horizontal integration... 6 Chapter 2: Key decisions in healthcare organizations... 9 Increased demand for services... 9 Resource shortages Compliance requirements Financial pressures Vertical and horizontal integration Chapter 3: Business intelligence and data warehousing Driving sector business with BI Insurance Investment Manufacturing Retail Utility organization Public sector Analytics Chapter 4: Healthcare informatics Specialization in healthcare informatics III
5 Contents Reducing administration to a utility role Emerging healthcare informatics topics Chapter 5: The common denominator Analytical questions Clinical analytical questions Operational analytical questions Financial analytical questions Chapter 6: Business intelligence architecture Industry-standard data warehouse architecture Component one Operational systems Component two Data repository Component three Analytical applications Chapter 7: Responsibilities of key decision-makers Chief medical officer Chief quality officer Chief research officer Chief financial officer Chief operations officer Chief marketing officer Chief information officer Marrying BI and informatics Part Two: Implementing BI for clinical, financial and operational success Chapter 8: Business intelligence applications for clinical success Business process efficiency Patient registries Outcomes analysis Quality program reporting Care team support Patient safety and risk management reporting and analysis Patient satisfaction Chapter 9: Business intelligence applications for financial success Demand data slicing Types of demand data Revenue cycle management Pay for performance The payoff of P4P Reusable compliance reporting The growing challenge of compliance demands IV
6 Business Intelligence and Analytics for Healthcare Organizations Chapter 10: Business intelligence applications for operational success Increasing speed and efficiency The value of lean initiative support Lean increases capacity Business intelligence improves lean Making healthcare convenient Improving service timing Predictive analytics Predictive analytics requirements Spending story analysis Chapter 11: Business intelligence applications for enterprise-wide success Emerging business structures Health provider cooperatives Emerging offerings Service line management Emerging practices Promoting EHR adoption using analytics Improving the ROIs of EHRs Emerging patient needs Chronic condition surveillance Levels of chronic condition surveillance Emerging competitors Medical tourism Medical tourism proponents Emerging business models Retail clinics Retail clinic analytics Part Three The journey Chapter 12: Selling the concept of BI in your organization The importance of executive sponsorship Timing is key Essential elements in selling the BI concept Essential roles in selling the BI concept The basic selling process Chapter 13: Business intelligence project roadmap Business intelligence assessment Planning stage Requirements gathering stage Design stage Development/construction/build stage Testing and data validation stage Implementation stage Training stage Warranty support stage Business intelligence application marketing V
7 Contents Chapter 14: Growing the organization's BI capabilities from a business perspective Marketing the BI application Developing a sustainable strategic plan A vision for the BI capability as a whole and the impact on the organization Vision Ears Relentless service experimentation Comprehensive event-response planning Many levels of BI Conclusions Part Four: Case studies Case study 1: Advocate Health Care, Oakbrook, Illinois Enterprise-wide balanced scorecard Marrying organizational objectives and goals with technology Case study 2: Denver Health, Denver, Colorado Integration boosts continuity of care Data warehouse evolution Electronic quality scorecard project Overcoming challenges More efficient and customized patient care Case study 3: Good Hope Hospital, Birmingham, United Kingdom Using BI and analytics to improve service delivery Financial challenges Computer simulations are key Case study 4: Scott & White Healthcare, Department of Surgery, Temple, Texas Developing a customized dashboard tool Successful problem-solving during the piloting stage Case study 5: Upstate Neurology Consultants, Albany, New York Centralizing data with BI to boost efficiency Case study 6: United States Air Force The advantages of a single electronic health record A fresh approach to data analysis Case study 7: Wisconsin Collaborative for Healthcare Quality, Wisconsin United approach improves performance measures Improving data collection Overcoming challenges VI
8 Business Intelligence and Analytics for Healthcare Organizations Case study 8: Advocate Health Care, Oakbrook, Illinios A physician report card supports clinical integration Steps to develop a customized report card Further reading Index VII
9 Executive summary The healthcare industry s new world Every year hundreds of people find themselves lost in the wilderness while working, playing, hiking, hunting, camping or travelling. These people suffer greatly from cold, thirst, hunger, exhaustion and fear. They find that the rules are different in the wild than in civilization, the challenges are greater, everyday tasks are harder and the threats are scarier. Some perish. Despite this, the resources they need exist in abundance and are actually readily available. The problem is that most people simply do not recognize these resources as the shelter, water, food, medicines, tools and weapons they need. Furthermore, they do not recognize their own internal strengths the skills, knowledge and resourcefulness they could use to protect themselves, to survive and even to rescue themselves. Healthcare provider organizations today find they are entering a new wilderness of their own with new rules, pressures, threats and new opportunities. Patients, payers and purchasers of healthcare services have become more demanding and more critical. Volume that was thought to be impervious to recession has plunged. Former partners and allies have now become competitors and foes. Care delivery models that have always been rock solid are now obsolete and the new models replacing them are confusing and counter to the ways hospitals, doctors, medical groups and ancillary service providers are compensated. Accountability and transparency are king and government regulations are crushing. Budgets are slashed, reimbursement is deteriorating and revenue or public funding is depressed. Meanwhile, capital for growth, change and expansion has all but dried up and what is available requires much higher levels of justification and risk mitigation planning. Many of these providers worldwide will suffer greatly. Some will merge to protect themselves and others will contract; some will sell out altogether and some will perish. And yet, these organizations universally have a tremendous supply of the very resources they need to adapt, survive, thrive, rescue themselves and even lead the changes they are experiencing. But many simply do not recognize their existing resources including people, processes and technologies, as well as the analytical mindset, knowledge and resourcefulness needed to succeed. One key difference between the winners and losers is their propensity for analysis and for using their analytical capabilities to improve clinical quality, operational efficiency and financial strength. The differentiator is how they use the data they already own to become smarter, stronger and faster, being business intelligence (BI), analytics and informatics. This Ark Group report is intended to help healthcare organizations understand BI and its benefits from a strategic and business perspective particular to the healthcare industry, by providing examples of BI IX
10 Executive summary applications for improving clinical, financial and operational success. And it provides a roadmap for organizations to follow to implement and maximise BI. Crucial aspects covered include: Part Two Implementing BI and analytics for clinical, financial and operational success; Part Three The journey; and Part Four Case studies. Achieving executive sponsorship; Nurturing vital conversations between business leaders and IT managers; and Ensuring the project remains business-driven. This report is directed at c-level executives in healthcare provider organizations including hospitals, medical groups, clinic organizations, specialty physician companies, as well as public health and government-based healthcare enterprises. Health information exchanges, quality standards organizations, payers, public health organizations, healthcare purchasing groups and patient advocacy groups will also find insight and practical advice for guiding their analytical efforts. This report is based on over 260 interviews with doctors, nurses, executives, informaticists, project managers, analysts and policy-makers across a wide spectrum of healthcare providers of varying sizes, shapes and stages of analytical development. Also, the authors each bring over 30 years experience and have combined backgrounds in nursing, clinical operations and practice management, front-line clinical experience, public health, primary care management, financial management, technology development, process improvement facilitation; and of course, BI, data warehouse, informatics and analytics development. This report is presented in four sections: Part One Bridging the gap between healthcare informatics and BI; In-depth and informative case studies include: Upstate Neurology Consultants, Albany, New York Specialty physician practice; Wisconsin Collaborative for Healthcare Quality, Madison, Wisconsin A voluntary consortium of 27 healthcare organizations; Advocate Health Care, Oakbrook, Illinois Integrated health care system; Good Hope Hospital, Birmingham, UK Member of the National Health Service (NHS); Scott & White Healthcare, Temple, Texas Integrated health system; Denver Health, Denver, Colorado A safety net institution that integrates acute hospital and emergency care with public and community health services; and United States Air Force Medical Operations Agency, San Antonio, Texas Supports healthcare operations for 75 medical treatment facilities. Part One bridges the gap between healthcare informatics and BI. Informatics is familiar to most healthcare providers, but is seen as a specialized discipline practiced by only a few in the organization. Business intelligence is unfamiliar to most of these same providers. This section describes both and is intended to show decisionmakers that their organization already has analytical resources and methods at its disposal and explains how to supercharge them using BI, data warehousing and analytics methodologies. Concept and topics addressed in Part One include: X
11 Business Intelligence and Analytics for Healthcare Organizations Chapter 1 Challenges facing the healthcare industry describes major trends such as increased demand, resource shortages, compliance requirements, financial pressures and vertical and horizontal integration; Chapter 2 Key decisions in healthcare organizations cover initiatives to increase revenue and reimbursement, improve care, streamline operations, reduce waste and cost, ensure quality and safety and integrate systems, processes and information; Chapter 3 Business intelligence and data warehousing steps outside healthcare to look at how other industries are using BI and data warehousing for business success, including insurance, retail, manufacturing, utilities and the public sector; Chapter 4 Healthcare informatics brings us back to the roots of analytical information usage in healthcare and shows how the field has grown and matured; Chapter 5 The common denominator analytical questions emphasizes the most important component of either BI or informatics capabilities, which is the analytical question and how healthcare organizations can use informatics to adopt BI; Chapter 6 Business intelligence architecture describes the industrystandard architecture for developing BI and data warehousing, in order to set the stage for subsequent chapters on specific applications; and Chapter 7 Decision-makers in healthcare organizations walk down the executive halls to see what types of analytical questions are important to chief medical officers, chief financial officers, chief operating officers and many more. Part Two offers 20 key types of BI applications that are being implemented and used by healthcare provider organizations to achieve clinical, operational, financial and enterprisewide success: Chapter 8 Business intelligence applications for clinical success demonstrates how healthcare organizations can become smarter clinically and describes seven applications such as patient registries, outcomes analysis, quality program reporting, patient safety and risk management analytics, etc; Chapter 9 Business intelligence applications for financial success describes applications used to become stronger financially, including demand data slicing, revenue cycle management, pay for performance (P4P) analytics and reusable compliance reporting; Chapter 10 Business intelligence applications for operational success offers applications used to become faster operationally, such as lean initiative support, service innovation, predictive analytics and spending story analysis; and Chapter 11 Business intelligence applications for enterprise-wide success describes applications used to move from old business models to new, emerging models such as cooperatives, medical tourism and retail clinics; and describes how to improve the organization through promoting electronic health records (EHRs), chronic conditions surveillance and advanced service line management. Part Three describes the journey from introduction of the concept of BI into XI
12 Executive summary your organization, through design, construction and implementation of the capabilities and finally, how to grow and evolve those capabilities: Chapter 12 Selling the concept of BI in your organization provides a roadmap of the process for championing BI in the healthcare enterprise by discussing essential concepts, roles and processes in this selling effort; Chapter 13 Business intelligence project roadmap briefly describes the industry-standard methodology for developing and implementing a healthcare BI application; and Chapter 14 Growing the organization s BI capabilities from a business perspective concludes the report by showing the reader how to market the application to the business, how to develop a strategy for long-term success and a vision for the BI capability as a whole; and analyzes its impact on the organization. This report will give readers a good understanding of how to use BI, informatics and analytics capabilities so their organizations can survive and thrive in the new healthcare industry wilderness that is emerging. Readers will have a firm grasp of the concepts, examples, roadmaps as well as a vision needed to put BI into play to make their respective organization smarter, stronger and faster. XII
13 About the authors Scott Wanless Scott Wanless is the healthcare business intelligence practice lead for Resource Management Professionals ( and an industry researcher, consultant and business analyst in the healthcare business intelligence field. He has more than 30 years experience in business intelligence strategic planning, informatics and analytics development, financial management, economic development and process improvement. His vast industry experience spans healthcare providers, hospitals, long-term care, primary care and specialty physician practices, healthcare payers, laboratory research, retail pharmacy and optical, insurance, financial services, banking, manufacturing; and state and local governments. Scott can be reached at Thomas A. Ludwig, RN, MBA, FACMPE Tom Ludwig is president and CEO of Forward Healthcare Solutions, LLC, a consulting firm that specializes in working with physician practices ( Having worked in the medical environment for 35 years, Tom started his career as a Navy Corpsman and also worked as a medical assistant and as a staff nurse. His 20-plus years experience as an administrator have been in roles from front-line manager to program director to chief operations officer. He is a member of the Medical Group Management Association and the American College of Medical Practice Executives (ACMPE) and currently serves on the ACMPE Board of Directors. Tom is a Board certified medical practice executive and a fellow in the American College of Medical Practice Executives. Tom can be reached at tludwig.rn@gmail.com. XIII
14 Acknowledgements Scott Wanless Many thanks to the hundreds of people who provided expertise and thought on the future of a better healthcare world through business intelligence and analytics; and for demonstrating the courage to act today to bring this future about. Specific thanks to the many people who have helped to get this message out over the years, including Evie Serventi of the Ark Group, Ron Powell, Jean Schauer and Mary Jo Nott of the BeyeNetwork; and Satish Kavirajan of The Center for Business Innovation. Additional thanks to my parents for teaching me at a young age to think analytically and apply this thinking to real-world situations. And of course, special thanks to my wife Laura and my sons Erik, Andy and Ethan for their help to turn this project into a mission. Tom Ludwig I would like to thank my friends at the Wisconsin Primary Health Care Association, as well as my FQHC colleagues for pushing me to learn more about this topic. I would also like to thank the individuals who contributed to the case studies, for you and your organizations are leading the way. Last of all, special thanks go to my wife Lisa and my sons Frederic and Evan for their encouragement and support. XV
15 Business Intelligence and Analytics for Healthcare Organisations Business Intelligence and Analytics for Healthcare Organisations Scott Wanless and Thomas LudWig Pages: 161 Pre-publication Offer Hard Copy I would like to order the new report: Business Intelligence and Analytics for Healthcare Organisations AUD $395 including gst. Offer ends 31 May 201(sorry no extensions) * Please allow 4-6 weeks for delivery ** $15 postage and handling Title First Name Last Name Position Title Organisation Name Website Address Postcode Phone Fax Mastercard Visa American Express Card number Expiry date Cardholder s name Cardholder s signature Payment enclosed (Cheques should be made payable to Ark Group Australia Pty Ltd) Please invoice me Fax back this form on Tel: aga@arkgroupasia.com Ark Group Australia Pty Ltd, Main Level, 83 Walker Street, North Sydney, NSW 2060 We occasionally allow reputable companies to mail details of products we feel may be of interest. If you do not wish to receive this service, please tick this box
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