HFMA project points to power of BI

New initiative aims to help hospitals adapt to value-based model
By Kelsey Brimmer
11:11 AM
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Driven by skyrocketing healthcare spending, the Healthcare Financial Management Association has launched Value Journey, a new initiative with 35 hospital systems across the country to identify common challenges, as well as common capabilities, strategies and tactics. For at least one hospital – so far – business intelligence has become a focal point.

During the recent Maine Chapter HFMA Accounting Update conference in Freeport, Maine, Wayne Bennett, CFO at Franklin Community Health Network, FCHN,  in Farmington, Maine, explained how his organization -- one of the hospitals participating in the project -- has been focusing on one facet of the project, the use of business intelligence, to improve clinical and financial performance.

[See also: Rocky road ahead for BI.]

Bennett explained that within the Value Project, HFMA has suggested four common capabilities for hospitals to cultivate in order to adapt to a value-based business model, which includes: people and culture; performance improvement; contract and risk management; and business intelligence.

FCHN began its journey by focusing on a combination of two issues: data warehousing and data integration technologies; and desktop query, reporting and analysis tools for self-service access to information, said Bennett.

“Putting the two together -- data warehousing and desktop query -- allows us to really understand this,” said Bennett.  “Relationships of data drive the business intelligence, and you can stop working off of anecdotal information and focus on straight facts. Really, data intelligence is an evolution.”

[See also: 6 ways to use business intelligence software.]

The evolution of business intelligence maturity, explained Bennett, begins with production reporting, moves to spreadmarks, and then eventually moves towards data marts and data warehouses, where data is pooled and reports are run off of a common database, rather than separated databases from each department of the hospital.

“We are at the data warehousing period of the evolution, where we are not only working off of one database, but we are also delivering business intelligence dashboards of information and putting more energy on analyzing information, rather than gathering information,” said Bennett.

He explained that FCHN partnered with PowerHealth Solutions, which specializes in hospital data systems for patient costing and billing, to work on getting their hospital data out of specific systems in the organization and into one data warehouse.

The evolution does not stop at data warehousing though, explained Bennett. From data warehousing, organizations can then make the leap to enterprise data warehousing, where “people begin studying the data and working on improving costs and solving problems,” he said.

From here, organizations then move towards the “ultimate evolution” period of analytic services where every smaller system is driven by an analytic database, he said,

“Wherever your organization is along this evolution spectrum, the good news is you can always try to move to the next level,” he said. “The key is to keep going rather than try to perfect everything at once.”

Carole Barker, from Mercy Hospital in Portland, Maine, and David Kennedy, a manager from BerryDunn, an accounting and consulting firm in Portland, Maine, explained during the conference that there are a number of issues to keep in mind when a healthcare organization is first starting out with their cost accounting system.

“It’s important to understand that a cost accounting system provides directional guidance regarding the contributions of a program, service line or group of providers,” said Kennedy. “However, it may not provide reliable information at the level of a single transaction, and is only as good as the assumptions applied.”

Barker added that some of the most important issues for a hospital system to consider first with their cost accounting system are who their customers are, who needs to be involved in the set up process, what the available resources are, the timeliness of the information, the transparency of the data, maintenance requirement, and any unique factors that need to be considered.