How Clinical Analytics Will Improve the Cost and Quality of Healthcare Delivery
There’s never been a more critical time in the history of U.S. healthcare for providers to turn to clinical analytics to help them survive — and thrive amidst — the trials of healthcare reform. Overcoming the challenges of reform will ultimately result in improved quality of care delivery and decreased costs. But reaching that point will require significant changes to the way healthcare has historically operated.
Healthcare reform has led to countless initiatives designed to improve both the cost and quality of care delivery. And now, for the first time in the history of U.S. healthcare, health systems need to measure and report on the care they’re delivering. They must also understand the financial ramifications of individual care decisions. This approach is quite a change in the traditional fee-for-service business model. But by using clinical analytics to dig into their wealth of captured data, both providers and health systems will be able to gain the critical knowledge they need to answer their many questions about care delivery.
Fortunately, the groundwork to be able to use clinical analytics is now in place as a result of the Centers for Medicare and Medicare (CMS) EHR Incentive Program. Because of this program, eligible providers now have a rich source of data they’ve captured in their mandatory electronic health records (EHRs). The next step is for health systems and providers to use clinical analytics to analyze their data to help them achieve success with the following three healthcare initiatives.
3 Healthcare Initiatives That Need Clinical Analytics
1. Shift from fee-for-service reimbursements to value-based purchasing
Up until 2010, when the Affordable Care Act established the Hospital Value-Based Purchasing Program, hospitals received payment based on the volume of care they provided. This fee-for-service reimbursement program in some cases encouraged the overuse of healthcare services without necessarily improving care outcomes.
Now, health systems are facing the greatest financial challenge in their history as they transition to value-based purchasing — a model that rewards decreased costs and improved quality. It’s a challenge health systems can overcome. But to be successful, they need clinical analytics to access to their data to understand how they compare to the many clinical quality measures and the costs related to delivering care. With payments now hinging upon quality, focusing solely on old metrics won’t bring financial success, particularly not in a world of accountable care organizations (ACOs), bundled payments, quality measures, and shared savings. Instead, health systems must concentrate on lowering the costs of healthcare while also providing higher value and quality.
The challenges of shifting to value-based purchasing may seem overwhelming. But by using clinical analytics to pull from the wealth of data an enterprise data warehouse (EDW) collects, it will be possible for health systems to meet these challenges. In specific, clinical analytics make it possible for health systems to do the following:
- Reduce waste
- Improve margins
- Improve performance
- Streamline operations
- Automatically track quality measures
- Succeed in shared savings arrangements
- Understand the complete picture of the cost structure
2. Accountable care organizations (ACOs)
Accountable care organizations (ACOs) are another healthcare initiative that encourages groups of providers to voluntarily give high-quality, coordinated care to populations of patients. The concept of an ACO is still evolving, but typically the groups of providers include doctors, hospitals, health plans, and others.
The coordinated care an ACO offers is designed to give patients the right kind of care without adding extra expenses. ACOs are able to avoid the extra expenses by only ordering care with a proven benefit and by not ordering duplicating services — a significant shift from fee-for-service. In addition, ACOs are particularly concerned about making sure the chronically ill receive proper care.
For the providers who work in ACOs, it’s critical to focus on preventative healthcare options as well as giving care to the ill or injured because of the new incentive model. With an ACO, there is now a greater financial reward to prevent illness rather than treating those who are already ill. Preventative care along with a new focus on using clinically-proven and effective therapies as opposed to choosing expensive, newly developed treatment options should dramatically improve care delivery.
To support ACO goals, health systems need to have several critical information systems: an electronic Medical Record (EMR), a health information exchange (HIE), an activity based costing system (ABC), a patient reported outcomes system (PRO), and an EDW. Over the past seven years, the U.S. healthcare industry has experienced an unprecedented $100 billion investment in the first two IT components, EMR and HIE systems. Yet, despite the considerable amount invested in these systems, health systems have yet to realize a decent return on investment (ROI) because they aren’t able to measure the quality of care and financial risk for managing their patients.
To unlock the data in their ACO EMR investment, health systems need an EDW. The EDW provides the clinical analytics abilities so desperately needed because the EDW makes it possible for analysts to dig into the data in a single repository that pulls in all of the data from the various source systems (clinical, financial, patient satisfaction, etc.). Yet, less than 25 percent of healthcare organizations have any type of EDW.
3. Value-based insurance design (VBID)
The sweeping changes occurring in healthcare require innovative models of care from providers and payers. One these new models is value-based insurance design (VBID).
The basis of VBID is for providers to pay increased costs for specific patient populations early on in their care to reduce the costs of care later on. Take, for example, one hospital’s goal to target length of stay following an appendectomy as a key opportunity for quality and financial improvement. Their frontline team used clinical data analytics to discover their clinicians were prescribing many types of antibiotics for an appendectomy. When they drilled down into the outcomes data, however, they discovered that one specific, expensive antibiotic significantly decreased length of stay, more than making up for the difference in cost to provide the more expensive antibiotic.
When hospitals are trying to cut costs, prescribing a more expensive treatment doesn’t seem logical — unless there’s evidence-based data that can tell the entire story. By using clinical analytics and easy-to-understand dashboards, clinicians can use real-time data to discover treatments based on best practices and best outcomes. Then, when they have this data, both providers and payers can work together to provide cheaper, more effective, data-driven quality improvements and treatments.
Healthcare transformation made possible with clinical analytics
Healthcare transformation has a long way to go before true cost reduction and quality improvements are the mainstay. The journey won’t be easy — but it’s critical to improve the health of our nation and to curb the rising costs of healthcare. By using clinical analytics, both providers and payers stand the greatest chance to not just survive healthcare reform, but to also thrive.
Are you struggling to realize a return on your investment from your EHR or EMR? What crucial insights have you discovered by using clinical analytics?
Would you like to use or share these concepts? Download this quality improvement presentation highlighting the key main points.