Data Surgery: Precision Tools for Hospital and Health System Wellbeing
Data Surgery: Precision Tools for Hospital and Health System Wellbeing
April 21, 2024
When the body is ill or injured, sometimes surgery is required to make the person well again. The necessity for surgery – whether it's a routine procedure like tonsil removal or a complex operation such as a triple bypass – depends on the severity of the medical issue at hand.
The art of analyzing hospital costing data and developing strategies to minimize unnecessary expenses and enhance efficiency is akin to the surgical process in many ways. Just as some illnesses or conditions require minor interventions like stitches or casts, others need more extensive or complex procedures such as orthopedic surgeries or chemotherapy.
To determine the appropriate level of intervention required for your health system’s costing data and underlying processes, Scanlon Enterprises adopts a meticulous approach, much like a skilled surgeon, using expertise and intuition from the many cases that have come before. But even with years of expertise, the first step involves conducting thorough tests and analyses to comprehensively evaluate the extent of the challenges, followed by a tailored plan of action, offering transparent communication regarding available treatment options. The final step is the implementation and operationalization of the chosen strategy for healing, with precise execution and diligent follow through.
Following is breakdown of the steps involved in a typical cost accounting process with Scanlon Enterprises:
1. Assessment – We partner with you closely to gain a deep understanding of your people, data technology, processes, goals, and pain points.
During the assessment phase, what sets Scanlon Enterprises apart is our unique approach to partnering with both clinical and financial hospital leaders, as well as our ability to evaluate any situation both at the fine-detail and the big-picture level.
This step can be likened to performing an initial exam on a patient, where a physician aims to understand the patient’s symptoms or concerns and how those challenges may be impacting function or quality of life. We also help health system leaders get a clearer picture of which areas may be of higher concern and deserving of prioritization versus those that are less impactful and are therefore lower priority.
Our approach begins with a deep evaluation of the client’s current position. We conduct in-depth interviews to gain insights into aspects of the hospital’s business, including team composition and expertise, clinical and financial software used, data accuracy verification methods, and use of automation in the cost accounting process.
This personalized approach coupled with our team of highly experienced consultants enables us to craft strategies tailored to the unique needs of each hospital or health system, leading to significant and enduring enhancements in cost accounting practices.
In early assessments, we often discover that existing data and reporting dashboards might not be showing hospital leaders the depth of information they need to make the best decisions. For example, while a health system’s current dashboard may provide some understanding of physician costs in comparison to peers, we find that they usually need additional detailed reports, such as average cost-per-procedure or in-depth comparisons of length-of-stay costs across service lines.
This continuous process of inquiry propels us to delve further into the data, customizing reports and offering a deeper understanding of the financial and operational landscape.
2. Design & Implementation – We dive into the data, begin to understand your expenses, and build and run cost models.
In the realm of healthcare diagnostics, we delve far beyond initial consultations, taking a deeper look that can be compared to a thorough patient exam that includes lab work and X-rays.
This is where the intricate data modeling begins; peering into the underlying numbers to uncover insights not visible on the surface. Through meticulous cost studies, including interviews with department heads, we gain a comprehensive understanding of operational intricacies, exploring departmental expenses and their direct impact on patient care. By dissecting elements such as RN salaries, implant costs, and other operational expenditures, Scanlon Enterprises reveals the factors behind the costs, facilitating informed decision-making at every level.
Internal buy-in to the solution or approach is essential for the success of any project, especially initiatives that include complex problems and a moderate to high level of behavioral modification. We approach every engagement with a “blank canvas” mindset, steering clear of assumptions and biases, choosing instead to let the data guide the way – this is our “bedside manner.”
Our methodical approach places a premium on presenting facts with clarity and precision, fostering transparent discussions grounded in empirical evidence rather than conjecture – much like a physician who refrains from judging a patient for their diet or lifestyle choices, focusing instead on finding the best solution. Our aim is not to have all the right answers at a project’s outset, but to ask the right questions and listen to what the department leaders and the data tell us.
Through meticulous data collection and in-depth dialogues, we help health systems seamlessly transition to implementation, deftly configuring systems to maximize data visualization and insights. With a software-agnostic stance, our approach guarantees bespoke solutions that empower clients to unlock the full potential of their financial data.
3. Service Line Development – We collaborate with leadership to develop service line assignments to help hospitals better manage their patient populations, iterating and refining along the way.
In cases where hospitals lack predefined service lines, Scanlon Enterprises leverages our repository of service line templates to provide guidance. By matching patient Diagnosis Related Groups (DRGs) to appropriate service line categories, we initiate the process of refining and iterating, in partnership with leadership, to establish the most suitable service line framework. This involves criteria-based assignment and data organization, tailoring the approach to fit each hospital's unique needs via an iterative process. While there's no one-size-fits-all solution, this service line refinement can be particularly beneficial for smaller healthcare facilities seeking to enhance their data organization and management.
By providing guidance on refining service line frameworks and organizing data, we enable hospitals to streamline their operations and improve efficiency through enhanced clarity. This leads to better resource allocation, cost management, and overall financial performance for hospitals. Additionally, the optimized organization of costing data facilitates clearer insights into patient care and outcomes, ultimately resulting in improved quality of care and patient satisfaction.
4. Reporting – We design and build reports of our findings, refine where necessary, automate where possible, and review findings with financial and clinical leaders.
In our analysis, we delve into various facets of hospital operations, including physician cost profiles, financial class margin reports (such as Medicare and commercial payers), and variations in care. Through our comprehensive approach, we offer both standardized best practice reports and customized solutions tailored to the specific needs of each hospital or health system. Our aim is to facilitate communication between financial and clinical executives by providing accurate, timely, and relevant data. And we emphasize the importance of reliable reporting that reflects current realities to better inform future processes and actions.
However, merely presenting data is not enough; it must be accompanied by meaningful comparisons and insights. Cost analysis, for instance, gains significance when contextualized against previous years, industry standards, or peer institutions. It’s also important to compare cost against non-cost values such as reimbursement, quality indicators, and patient satisfaction. We advocate for deeper dives into data, moving beyond superficial representations like pie charts to explore nuanced metrics such as cost per case based on DRGs and physician performance. By ensuring reporting spaces are filled with actionable information, we empower healthcare leaders to optimize their business strategies and drive meaningful improvements in patient care.
5. Training & Adoption – We obtain final approval and showcase profitability reporting to financial and clinical leaders, educate staff, and develop a roadmap forward.
As part of our approach to healthcare cost accounting, we have developed a comprehensive training process aimed at equipping leaders with the necessary skills and insights. While formal workshops serve as structured platforms for learning, our commitment to training begins on day one. It's not merely about asking questions; it's about articulating the significance behind the numbers.
Much like a physician explaining a medical procedure, we guide hospital stakeholders through the intricacies of cost studies, outlining the rationale and methodology at every step. This proactive approach serves as the bedrock for successful implementation and operationalization, fosters clarity and understanding to help increase the likelihood of buy-in and adoption, and yields a more tailored and functional solution.
6. Operationalizing – We help leadership turn our insights into action, iterating to enact change and enable continuous improvement. Then we measure results and iterate some more.
Adoption of cost accounting practices isn't just about securing buy-in; it's about ensuring that every stakeholder comprehends and embraces the process.
Operationalizing these insights involves translating plans into action, leveraging the data-driven strategies we provided throughout the process to drive long-term improvements in business operations. It's about being readily available as a resource, addressing any lingering questions, and facilitating access to detailed reports or additional information as needed.
For physicians, the pivotal moment of discharging patients back into their home environments feels like releasing them back into the world; doctors must trust that the patients will continue to care for themselves and follow the recommended treatment regimen. It's ultimately a collaborative effort and a willingness to follow through on recommendations that will lead to tangible results and better health.
Similarly, at Scanlon Enterprises, we invest heavily in efforts to set our hospital and health system clients on the path to “recovery.” Our work in optimizing cost accounting processes aims to empower organizations to navigate their financial landscapes independently, trusting that the “data surgeons” have laid a foundation for sustainable improvement and good financial health.