10 Tips for Hospital Analysts: How to Turn Your Costing Data into a Story Hospital Leaders Can Use
10 Tips for Hospital Analysts: How to Turn Your Costing Data into a Story Hospital Leaders Can Use
May 16, 2024
Here’s a question for the hospital financial analysts and decision support analysts out there: Are you surprised yet again that no action was taken based on your Service Line Profitability or Net Revenue forecast report?
You’ve spent weeks, months, or even longer on your analysis, and you know the numbers and the story behind them cold. The next move your hospital needs to make seems obvious to you. Your report clearly exposes issues in operations that need to be addressed. So why are your hospital leaders or other internal stakeholders confused or disinterested in your report, or worse, offering no reaction or feedback at all?
The trick lies in telling the story behind the numbers in a way that others can understand, so they can become a part of the conversation. The following 10 tips can help you get there:
1. Give Me the Baby, Not the Labor Pains: Be careful not to provide too much detailed information in your report. Focus on the summary information. More detailed inquiries can be addressed as they arise. If the request is to provide a detailed report, make sure to include a summary section as well.
2. Hug a Tree – Then Go to Print Preview: Make sure your report is printer-ready for your hospital leadership or other end-users. Many people still prefer hard copies, especially for reviewing complex information, and this is a courtesy to them. As an extra bonus, having a physical copy in front of leaders may also increase the likelihood that they will more promptly review the valuable information you’ve shared with them.
3. Bring the Story to the Forefront: This seems obvious, but everyone needs a reminder about this occasionally: It’s more important that the material in your reports be clear and accurate than fancy. Pick a readable font for your report, and limit the use of emphasizing features like bold, highlights, and underline to areas where emphasis is truly needed; these elements use all meaning and impact if they’re overused.
4. Omit It... I’m Right: Where possible, omit the last few digits (decimal points) of your numbers. There is often no added benefit for you or your readers in showing all the digits or decimal points of large numbers. Simply note clearly in your report that the information is presented in the thousands, millions, or billions. During the analysis process, hospital leaders are looking for patterns – they want the shortest route to the answers they seek.
5. Never Underestimate the Strength of a Well-Constructed Column: All charts in your reports should include no more than 13 columns to ensure ease of viewing, digitally and in print. This will prevent your report from being too wide. Also, generally dates are better off as column headers than rows headers. It is natural for people to think of dates sequentially from left to right. Don’t fight it!
6. Wrap it Up: Use the Wrap Text functionality, especially for columns. The focus should not be on the columns being wide enough to hold the header, but instead being the right size for the numeric content they contain.
7. Be Your Own Editor: Establish high-quality standards and stick to them to brand yourself as a trustworthy source of valuable information. Chances are you don’t have a professional editor at your disposal, so you will likely have to be your own editor or ask a trusted colleague to review your report before final submission. Here are four steps for being a great self-editor and delivering high-quality work:
1) Gather and compile your numbers and put together your report
2) Check your numbers
3) Let the report sit overnight, get some coffee, or work on another project for a while
4) Check your report again, including your numbers, spelling, grammar, and print settings.
Once you’ve completed these steps, go back though steps three and four above at least twice!
8. Stop Relying on Pie Charts: This topic is my well-worn soapbox: Pie charts might as well be white space as far as I’m concerned. There are some notable exceptions (e.g., a pie chart breakout of Denials by Reason), but in most cases, pie charts offer little true insight. Let’s be real: How often will a healthcare executive or analyst look at a pie chart and say, “No kidding? I didn’t realize the majority of our charges are billed to Medicare. This changes everything!”?
9. Focus on Trending & Benchmarking: Both techniques give a baseline for comparison purposes, which adds important context to numbers. Look at these two statements:
“Our Contract Labor Expenses are $4.5 million for 2024.”
“Our Contract Labor Expenses have increased by $1 million over the past year, from $3.5 million last year to $4.5 this year.”
Which one offers more meaningful insight about current operations? As you can see, the second statement requires further analysis, discussion, and perhaps action.
The same concept can be applied when it comes to benchmarking: It can be very helpful to benchmark against your own numbers from a year ago, a month ago, or against a peer hospital’s publicly available figures. What’s important is the ability to compare to a baseline so that the numbers mean something.
10. Have Fun with Ratios: Call me crazy, but I really enjoy playing with ratios. They have the power to enable you and your reader to look at numbers in an entirely new and compelling way, opening doors to real insight and creativity. Some especially helpful ratios in my line of work, when helping hospitals sift through varied data types with the goal of reducing costs and increasing revenues, include:
Direct Costs / Reimbursement
Contribution Margin / Casemix Index
Productivity % / Turnover Rate
These numbers may or may not be particularly helpful in isolation, but like all numbers, ratios become more relevant when paired with trending or benchmarking.
A Simple Story can Make Your Numbers Sing
The final measure of the success of your report is the answer to these questions: Did you tell a story? Would you feel comfortable explaining this information in simple terms to your intended audience? Did you make discoveries after looking at your final report that you didn’t notice when you were creating the report? If the answer to one or all these questions is no, I’d recommend you review your report with the above tips in mind and revise as necessary.
To learn more about how to better manage and analyze your hospital’s costs, contact Christie Scanlon, CEO of Scanlon Enterprises, at christie@scanlonent.net.