Decision Support: Why the Executive Dashboard Is a Healthcare CEO’s Best Advisor
As she arrives at her office in the morning, Monica Lemieux, CEO of Pennington Health, is worried. The health system she leads is facing unprecedented challenges, which threaten its 118-year legacy. While the system has evolved through many important challenges over the decades, the need for change now feels overwhelming. Mounting costs, increasing competition, advancing healthcare reform, value-based reimbursement, population health, rapidly expanding regulations, workforce shortages, consumerism, and ever-present information technology needs are all demanding her time and attention. She is determined to maintain the organization’s proud legacy and position it to face a demanding future. To do this, she must lead wisely and constantly make quality decisions.
An Industrywide Transformation: More Health Systems Are Turning to Decision Support
Pennington Health got its start in 1896 when a group of community leaders sought to establish a hospital for farmers in the surrounding community. By 2016, the system had grown to comprise nine acute care hospitals and a multispecialty medical group, consisting of over 1,000 physicians. Pennington Health serves two million patients in various mid-size communities, making it one of the largest health systems in the Midwest. The health system is supported by more than 14,000 employees offering acute care, emergency care, ambulatory clinics, diagnostic services, rehabilitative care, health and wellness education programs, community outreach, and advocacy services to residents in nine Midwest communities. Pennington Health has become a large, complex organization dedicated to driving meaningful change.
Just as it has in other industries, Monica knew that using lean and other continuous improvement methodologies could drive systemwide standardization to accelerate improvements and efficiencies, resulting in improved outcomes and lower total cost of operations. The Pennington Health lean project was initially launched in 2008, but had a rocky start—leaders failed to get the program off the ground. As a result of these problems and missteps, a mindset opposed to change—especially change that involved lean principles—developed among the staff. It got to the point that many detested the thought of lean and they had to be convinced to support the cause.
Monica finally found a physician leader who could explain lean in a way that resonated with the clinical and non-clinical leaders in the organization by aligning the effort with their innate desires to improve care for patients. Once the Pennington leadership team and key clinical leaders were on board, they served as change agents to extend support for lean improvement throughout the organization.
The Pennington leadership team educated people and helped them see how lean principles aligned with traditional healthcare goals and values, and how those principles could empower them. To make significant change, employees had to commit to transforming both themselves and the organization and, with time, this concept was internalized by Pennington Health employees. In addition, an enterprise data warehouse (EDW) was implemented to provide the data and analytical capabilities necessary to further catalyze improvement efforts.
Over this time period, Monica learned the importance of good data, speed, flexibility, adaptability, and collaboration in quality decision making. To support this need, the system recently implemented an executive decision support system—healthcare decision support that enables leaders to easily monitor key metrics, quickly identify emerging issues, and collaborate with others to resolve problems.
One Healthcare CEO’s Challenge and How an Executive Dashboard Saved the Day
Each day, Monica starts her day by logging into the executive decision support system and scanning it for any evidence of things requiring her immediate attention. Today was no different.
As Monica scanned her executive dashboard, with a personally tailored view of key metrics, she noticed an alert (Figure 1) that days cash on hand (DCOH) was undergoing a worrisome decline. She knows that DCOH is an important measure of hospital and health system liquidity. An organization needs a certain amount to meet the requirement of lenders, rating agencies, and others. But if DCOH is too high, then the impact on hospital finances can be detrimental, as cash is not deployed to areas of the business generating the highest returns. The present drop in DCOH (Figure 2) was particularly worrisome because Monica knew that the system was due for a review by bond rating agencies in a few months. This needed attention or it could add additional millions to the cost of acquiring capital for growth.
Figure 2: Alert Triggered by DCOH Dropping Below 230
Drilling into the data, Monica sees that the drop in DCOH appears to be related to an increase in operating expenses, AR days, and payroll expenses (due to the excessive use of temporary nurses) at some of the system’s largest operating units. Monica knows she must take quick action to remedy the situation.
The executive dashboard makes it easy to not only identify issues, but also communicate and collaborate with her direct reports. She quickly communicates with the system CFO, the SVP of Human Resources, and the leaders of the operating units driving the drop in DCOH. After reviewing the data and discussing remedies, each member of the executive team at the meeting is assigned accountabilities and launches solutions with their individual direct reports. Within three months, the downward trend in DCOH is reversed and returning to more acceptable levels. By the time the bond rating agencies are on site, the problem should be largely resolved.
Leading Wisely: Why Today’s Healthcare Leaders Need Executive Dashboards
Like Monica, CEOs of modern complex health systems must learn how to thrive in the rapidly changing healthcare environment and keep their health system’s finances healthy as healthcare moves toward a value-based payment model:
- They must know how to analyze and digest large amounts of data relating to care quality, operations, contracting, and major purchasing decisions.
- They must have a clear understanding of the financial aspects of their system such as revenue streams, cost drivers, costs of capital, bundled payments, and payment reforms.
- They must also be skilled at conflict resolution and understand how to work collaboratively—using a matrix management approach—with peers, direct reports, and system experts.
Executive decision support systems help leaders make sound operational and financial decisions, develop and communicate changes in strategy, and help others get on board when dealing with unanticipated issues. Today’s healthcare leaders must be data-driven, skilled problem solvers, strategic and analytical thinkers, and collaborative leaders who understand both the clinical and financial sides of healthcare. In healthcare today, an executive dashboard is critical to quality decision making.
Would you like to learn more about this topic? Here are some articles we suggest:
- Leading Wisely: Better Executive Decision Support
- Healthcare Decision Support: An Industrywide Imperative (goes live 4/13)
- Data Collection Tools in Healthcare: What You Need
- Automating the Executive Healthcare Dashboard: Spend Less Time Collecting and Validating KPI Data
- Healthcare Dashboards: 3 Keys for Creating Effective and Insightful Executive Dashboards
Would you like to use or share these concepts? Download this presentation highlighting the key main points.