Business Intelligence and Analytics for Healthcare Organizations Scott Wanless and Thomas Ludwig Published by In association with
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)207 549 2500 Fax +44 (0)20 7324 2373 publishing@ark-group.com NORTH AMERICA OFFICE Ark Group Inc 4408 N. Rockwood Drive Suite 150 Peoria IL 61614 United States Tel +1 309 495 2853 Fax +1 309 495 2858 publishingna@ark-group.com ASIA/PACIFIC OFFICE Ark Group Australia Pty Ltd Main Level 83 Walker Street North Sydney NSW 2060 Australia Tel +61 1300 550 662 Fax +61 1300 550 663 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: 978-1-907787-57-7 (hard copy) 978-1-907787-58-4 (PDF) Copyright The copyright of all material appearing within this publication is reserved by the author and Ark Conferences 2011. It may not be reproduced, duplicated or copied by any means without the prior written consent of the publisher. ARK1641
Business Intelligence and Analytics for Healthcare Organizations Scott Wanless and Thomas Ludwig Published by In association with
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... 13 Compliance requirements... 13 Financial pressures... 13 Vertical and horizontal integration... 16 Chapter 3: Business intelligence and data warehousing... 23 Driving sector business with BI... 23 Insurance... 23 Investment... 24 Manufacturing... 24 Retail... 25 Utility organization... 26 Public sector... 26 Analytics... 27 Chapter 4: Healthcare informatics... 31 Specialization in healthcare informatics... 32 III
Contents Reducing administration to a utility role... 33 Emerging healthcare informatics topics... 34 Chapter 5: The common denominator Analytical questions... 35 Clinical analytical questions... 35 Operational analytical questions... 38 Financial analytical questions... 41 Chapter 6: Business intelligence architecture... 47 Industry-standard data warehouse architecture... 47 Component one Operational systems... 47 Component two Data repository... 48 Component three Analytical applications... 49 Chapter 7: Responsibilities of key decision-makers... 51 Chief medical officer... 51 Chief quality officer... 52 Chief research officer... 52 Chief financial officer... 53 Chief operations officer... 53 Chief marketing officer... 53 Chief information officer... 54 Marrying BI and informatics... 54 Part Two: Implementing BI for clinical, financial and operational success Chapter 8: Business intelligence applications for clinical success... 59 Business process efficiency... 59 Patient registries... 60 Outcomes analysis... 64 Quality program reporting... 64 Care team support... 68 Patient safety and risk management reporting and analysis... 71 Patient satisfaction... 75 Chapter 9: Business intelligence applications for financial success... 79 Demand data slicing... 79 Types of demand data... 80 Revenue cycle management... 81 Pay for performance... 84 The payoff of P4P... 87 Reusable compliance reporting... 88 The growing challenge of compliance demands... 88 IV
Business Intelligence and Analytics for Healthcare Organizations Chapter 10: Business intelligence applications for operational success... 91 Increasing speed and efficiency... 91 The value of lean initiative support... 92 Lean increases capacity... 93 Business intelligence improves lean... 94 Making healthcare convenient... 95 Improving service timing... 98 Predictive analytics... 99 Predictive analytics requirements... 101 Spending story analysis... 102 Chapter 11: Business intelligence applications for enterprise-wide success... 105 Emerging business structures Health provider cooperatives... 105 Emerging offerings Service line management... 107 Emerging practices Promoting EHR adoption using analytics... 109 Improving the ROIs of EHRs... 110 Emerging patient needs Chronic condition surveillance... 112 Levels of chronic condition surveillance... 112 Emerging competitors Medical tourism... 115 Medical tourism proponents... 117 Emerging business models Retail clinics... 120 Retail clinic analytics... 121 Part Three The journey Chapter 12: Selling the concept of BI in your organization... 127 The importance of executive sponsorship... 127 Timing is key... 127 Essential elements in selling the BI concept... 128 Essential roles in selling the BI concept... 130 The basic selling process... 132 Chapter 13: Business intelligence project roadmap... 133 Business intelligence assessment... 133 Planning stage... 135 Requirements gathering stage... 135 Design stage... 137 Development/construction/build stage... 137 Testing and data validation stage... 138 Implementation stage... 138 Training stage... 139 Warranty support stage... 139 Business intelligence application marketing... 139 V
Contents Chapter 14: Growing the organization's BI capabilities from a business perspective... 141 Marketing the BI application... 141 Developing a sustainable strategic plan... 144 A vision for the BI capability as a whole and the impact on the organization... 146 Vision... 147 Ears... 148 Relentless service experimentation... 148 Comprehensive event-response planning... 148 Many levels of BI... 148 Conclusions... 149 Part Four: Case studies Case study 1: Advocate Health Care, Oakbrook, Illinois... 153 Enterprise-wide balanced scorecard... 153 Marrying organizational objectives and goals with technology... 153 Case study 2: Denver Health, Denver, Colorado... 155 Integration boosts continuity of care... 155 Data warehouse evolution... 155 Electronic quality scorecard project... 155 Overcoming challenges... 156 More efficient and customized patient care... 157 Case study 3: Good Hope Hospital, Birmingham, United Kingdom... 159 Using BI and analytics to improve service delivery... 159 Financial challenges... 160 Computer simulations are key... 160 Case study 4: Scott & White Healthcare, Department of Surgery, Temple, Texas... 161 Developing a customized dashboard tool... 161 Successful problem-solving during the piloting stage... 161 Case study 5: Upstate Neurology Consultants, Albany, New York... 163 Centralizing data with BI to boost efficiency... 163 Case study 6: United States Air Force... 165 The advantages of a single electronic health record... 165 A fresh approach to data analysis... 166 Case study 7: Wisconsin Collaborative for Healthcare Quality, Wisconsin... 167 United approach improves performance measures... 167 Improving data collection... 167 Overcoming challenges... 168 VI
Business Intelligence and Analytics for Healthcare Organizations Case study 8: Advocate Health Care, Oakbrook, Illinios... 169 A physician report card supports clinical integration... 169 Steps to develop a customized report card... 170 Further reading... 171 Index... 173 VII
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
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
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
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
About the authors Scott Wanless Scott Wanless is the healthcare business intelligence practice lead for Resource Management Professionals (www.yourrmp.com) 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 scott.wanless@gmail.com. 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 (www.forwardhealthcaresolutions.com). 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
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
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