Your SlideShare is downloading. ×
Healthcare Analytics Aberdeen Group Research
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Healthcare Analytics Aberdeen Group Research

128
views

Published on

Healthcare Analytics Aberdeen Group Research

Healthcare Analytics Aberdeen Group Research


0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
128
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
3
Comments
0
Likes
1
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Healthcare Analytics Has the Need Ever Been Greater? September 2012 David White
  • 2. This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc. September 2012 Healthcare Analytics: Has the Need Ever Been Greater? In the USA, healthcare reform threatens to starve an industry that swallows over $2 trillion of spend annually. Elsewhere, many developed nations with government funded healthcare services are imposing austerity measures that ultimately will result in cuts to services. This Analyst Insight is based on two research surveys; the first, conducted in January 2012, gathered data on the use of role-based business intelligence (BI), and the second, conducted in August 2012, focused on smart healthcare. This research examines the operational performance of healthcare organizations compared to other organizations. It also shows how healthcare providers may improve their operating performance by using business intelligence (BI) and analytics better. Healthcare Lags in Improving Performance Aberdeen assessed the operational performance or survey respondents based on four criteria (see sidebar). As Figure 1 shows, almost all organizations that achieved Best-in-Class performance levels had been able to improve their operational performance in the last year. Figure 1: The Best-in-Class Demonstrate Strong Improvements Source: Aberdeen Group, January 2012 56% 46% 54% 96% 98% 99% 0% 20% 40% 60% 80% 100% Improved cycle time of key business processes Improved employee productivity Improved response time to customer requests Percentage of respondents, n=422 Best-in-Class Healthcare organizations Analyst Insight Aberdeen’s Insights provide the analyst's perspective on the research as drawn from an aggregated view of research surveys, interviews, and data analysis Aberdeen Methodology The Aberdeen maturity class groups survey respondents into one of three segments. In Aberdeen's role-based business intelligence survey, the Best- in-Class organizations are the top performing 20% of survey respondents based on their aggregate performance in 4 criteria: √ Ability to improve their customer response time in the last year. 99% of Best-in- Class organizations were able to do so √ Ability to improve their employee productivity in the last year. 98% of Best-in- Class organizations were able to do so √ Ability to improve the cycle time of their key business processes in the last year. 96% of Best-in-Class organizations were able to do so √ Y-Y Revenue growth - The Best-in-Class achieved an average growth rate of 28% 24 organizations from this survey were from the healthcare industry
  • 3. Healthcare Analytics: Has the Need Ever Been Greater? Page 2 © 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897 In contrast, only 54% of healthcare organizations had been able to improve the time taken to respond to customer requests. While a similar number (56%) have been able to cut the time required to execute business processes, less than half (46%) report improvements in employee productivity. And yet, many healthcare providers - in the United States and elsewhere - are staring at a tsunami as they face significant cuts in their traditional fee-for-service revenue. As revenue dries up, internal cost cutting will become necessary. The profit and loss statement for almost any healthcare facility will show that staffing is the biggest component of operating costs. But, as Figure 1 shows, the majority of healthcare organizations were not able to improve their employee productivity in the last year. As a result, some providers will almost certainly cease to exist as they are engulfed by the wave of healthcare reform and revenue loss. Aberdeen's hypothesis is that healthcare providers' lack of insight into their business is one of the reasons they struggle to improve operational performance. Healthcare is a business, even for not-for-profit providers. Whatever the mission statement, there is a fundamental requirement to balance the books. In part, providers lack insight because business intelligence is used so sparingly in many healthcare settings (Table 1). Table 1: Analytics More Pervasive at the Best-in-Class Function Best-in-Class Healthcare Corporate Management 67% 42% Operations 58% 36% Quality management 53% 37% Procurement 44% 26% Human Resources 34% 24% Source: Aberdeen Group, January 2012 Table 1 shows the percentage of responding organizations that cite strong adoption of analytics in specific business functions. For example, 67% of Best-in-Class organizations have a strong use of analytics within their corporate management function. In contrast, this is true of only 42% of those healthcare organizations taking part in Aberdeen's survey. Other examples in Table 1 show the most widespread and relevant differences in use between Best-in-Class organizations and healthcare organizations. Overall, only one function at the majority of healthcare organizations uses “This is a group that had only financial metrics for 30 years and never used operational metrics in every work area. Now with dashboards showing operational metrics, people are more aligned - everyone knows what they do to move every number.” ~ Practice Administrator, US Healthcare Provider Survey Demographics 32 healthcare providers took part in Aberdeen's August 2012 smart healthcare survey. Of these 32 survey respondents: √ 59% were inpatient facilities √ 9% were outpatient facilities √ 3% were Integrated Healthcare Delivery Systems headquarters offices √ 16% were long-term care facilities √ 13% were some other types of healthcare provider
  • 4. Healthcare Analytics: Has the Need Ever Been Greater? Page 3 © 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897 analytics extensively - finance and administration. On the other hand, over 50% of top-performing companies use BI widely in eight business functions. Today, many enterprises are drowning in data. As Aberdeen's 2012 research into data management (Data Management for BI) noted, on average companies are managing 2.5 times as much data as they were 3 years ago. Often, this data is simply accumulated as a normal part of doing business. In commercial companies, sales are recorded, shipments are made, phone calls are placed, and cash is withdrawn. Likewise, in a healthcare setting, physicians orders are noted, tests performed, medications administered and supplies procured. However, all too often when healthcare providers record those activities, they record them on paper, not electronically. That unfortunately makes the use of analytics in healthcare difficult. Fortunately though, the HITECH act (see sidebar) aims to remedy this shortcoming - at least partly - in the USA through the introduction of electronic medical records. As increasing amounts of data are captured electronically, the potential for analytics to eliminate waste and improve the quality of care is enormous. The next section highlights how healthcare providers can follow the path beaten by Best-in-Class organizations to make the use of BI truly pervasive. Pervasive BI - How the Best-in-Class Achieve It Figure 2 shows just some of the areas in which Best-in-Class organizations - those with the greatest improvement in operating performance - significantly outperform healthcare enterprises that already use BI. Organizational and cultural factors play a significant role in the successful use of analytics. Unfortunately, many healthcare organizations appear to lack both the organizational culture and the organizational structure to excel with BI. First of all, Best-in-Class firms are twice as likely as healthcare providers (59% vs. 30%) to have defined key performance indicators (KPIs) to measure performance across all parts of the company. Not only are those KPIs defined, but the data required to measure performance is regularly collected. That data in turn is used to refresh and populate BI reports and dashboards so that operational performance can be assessed and corrective action taken where necessary. Top performing enterprises are also more than twice as likely (55% vs. 26%) to have solid analytical knowledge and experience in roles beyond the information technology department. This too is important for achieving widespread use of BI. In the past, skilled IT practitioners had to create and refresh business intelligence reports and charts for a select group of business executives. No longer. Aberdeen's July 2012 research into agile business intelligence (Agile or Fragile? Your Analytics, Your Choice) highlighted the growing trend toward self-service analytics. This approach allows business managers to take a greater role in finding, shaping and analyzing the information they need, hands-on. Most Best-in-Class organizations put in place formal education programs to teach non-technical The HITECH Act The American Recovery and Reinvestment Act, signed into law in February 2009, included $19bn to promote information technology in healthcare (the HITECH act). The Office of the National Coordinator for Health Information Technology (ONC), within the department of health and human services, has taken on the goal of ensuring that information on every American is included in some form of Electronic Health Record (EHR) by 2014. To achieve this ambitious goal, that $19bn from the stimulus act is set aside for incentive payments to induce healthcare providers to adopt, and make "meaningful use" of, EHR technology. PPACA The Patient Protection & Affordable Care Act (PPACA) is commonly known as healthcare reform. Passed in March of 2010, the immediate focus is as much about healthcare insurance reform as it is about healthcare delivery reform. Much of the long term focus on healthcare delivery reform is embodied in the Center for Medicare & Medicaid Innovation (CMI). The CMI will be charged with testing new payment and service-delivery models to reduce Medicare and Medicaid costs without adversely affecting the quality of care – and hopefully improving it.
  • 5. Healthcare Analytics: Has the Need Ever Been Greater? Page 4 © 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897 staff about analytics. The scope of such training may include the overall concepts of analytics, as well as the specific BI tools available. Ideally, hands- on tuition with data from the manager's specific job role should also be included. Figure 2: Laying the Foundation for Best-in-Class Analytics Source: Aberdeen Group, January 2012 Best-in-Class organizations are also 4 times as likely as healthcare organizations to have tools in place to assess and improve the quality of their data. Often, when Aberdeen interviews IT executives at companies that use analytics, we hear that one aspect of the project was much more difficult than anticipated: data quality. Typically, business intelligence tools provide the first real insight into the quality of data as a whole—or the lack of data quality. While managers of individual business units may know that records are not always entered fully or accurately, the overall impact of poor data quality is not seen until BI collates and summarizes data from different parts of the organization. A single supplier of medical supplies may appear to be many different suppliers simply because that supplier's name has been misspelt, or entered in an abbreviated form. A supplier formally called "Acme Medical Supplies Incorporated" may be recorded in a procurement application as: • Acme Medical Supplies Incorporated • Acme Medical Supplies • Acme Medical Suplies • Acme Medical 0% 26% 14% 30% 50% 55% 58% 59% 0% 20% 40% 60% Ability to measure 'time-to-information' for end users Strong analytical knowledge within non-technical roles Measurement tools to capture data quality issues All line-of-business KPIs measured and reported Percentage of respondents, n=422 Best-in-Class Healthcare organizations More Best-in-Class Capabilities Other notable capabilities that Best-in-Class companies are more likely to possess than healthcare organizations Regular line-of-business operational performance reviews - 74% vs. 39% √ Formal training on the importance of data quality - 50% vs. 14% √ Single, central repository of financial performance information - 71% vs. 43% Automated Analytics The 32 healthcare providers that took part in Aberdeen's August 2012 smarter healthcare survey compile and distribute care quality and patient safety metrics in the following ways: √ Compiled from paper records and distributed as a paper report - 10% √ Compiled from paper records and distributed via a spreadsheet - 6% √ Manually aggregated from computerized records and distributed via a spreadsheet - 23% √ Automatically aggregated from computerized records and distributed via BI static reports - 32% √ Automatically aggregated from computerized records and distributed via interactive BI tools - 26% √ Automatically aggregated from computerized records and wirelessly distributed to mobile devices - 3%
  • 6. Healthcare Analytics: Has the Need Ever Been Greater? Page 5 © 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897 • Acme Medical Inc. • Acme While we humans intuitively recognize these different database entries as a single company, simplistic computer systems do not. While this inaccuracy may be acceptable for ordering supplies, for business intelligence applications it is not. For example, imagine that hospital executives wish to understand their annual expenditure on physician-preferred items to consolidate spending and maximize volume discounts. It is impossible to do this accurately when errors (such as those described above) exist in the underlying procurement data. In the case above, the true spend with Acme appears to be spread across multiple smaller suppliers. As if this situation wasn't difficult enough, it is compounded in organizations such as Integrated Health Delivery Systems (IHDS). An IHDS typically includes multiple healthcare facilities. If each facility has its own purchasing process (and supporting procurement or financial management software) then understanding spending on medical supplies across the entire IHDS can be much harder to achieve. Addressing data quality, then, is an essential pre-requisite for powerful analytics. The best place to fix data quality issues is at the point of introduction. Otherwise, a snowball effect can ensue, where an error introduced during data entry is replicated in many downstream applications. Not only are Best-in-Class companies four times as likely to have tools to check data quality, but they also work harder to instill data discipline at the point of capture. Half (50%) these organizations have formal training programs in place to educate staff on the importance of accurate record keeping and steps that can be taken to improve data quality. Conversely, only 14% of healthcare providers provide similar training. Finally, as Figure 2 shows, when analytics is used in healthcare, there is no feedback cycle to ensure that information is being delivered in a timely way. Understanding whether the IT plumbing is delivering the right information to the right people at the right time is fundamental to the success of any business intelligence implementation. For example, a clinical care director may need to review updated care quality metrics every month to improve patient safety and clinical outcomes. However, if the IT organization is only able to refresh that data quarterly, then the care director's "time-to- information" needs are not being met. Although the business needs fresh data every month, it is only delivered every three months. Other situations may warrant much more frequent updates to data. For example, a nursing manager may want to see the patient census updated several times a day, to optimize staffing levels. Without a current patient census, a staffing manager can only guess at the number of nurses they need to schedule for an upcoming shift. The result: either patient safety is jeopardized, or the healthcare facility incurs excessive staffing costs. While half of Best-in-Class organizations measure "time-to-information", no healthcare providers do so. Without this fundamental measure of BI performance, the team responsible for delivering analytics to managers has no way of knowing if they are even close to hitting the target. Definition of Terms √ Dashboard: Dashboards are a form of BI tool that are typically highly graphical and can show many KPIs or metrics on a single screen. As such, they can provide a powerful way for executives and managers to rapidly comprehend the state of activities that are most important for their role. √ Drill-down: Enables a business user to rapidly navigate from highly summarized data to see the underlying detailed data. In can be a powerful way for users to start to understand cause-and-effect relationships. For example, if the clinical care director notices a jump in the 30 day re-admission rate, he or she could drill-down to see if the increase was related to a particular surgery, physician, facility, or even day of the week. Fast Facts √ 19% of the survey respondents to Aberdeen's August 2012 smarter healthcare survey are working for providers that are already part of an Accountable Care Organization (ACO) √ A further 41% work for providers that are actively considering forming or joining an ACO
  • 7. Healthcare Analytics: Has the Need Ever Been Greater? Page 6 © 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897 Compared to Best-in-Class enterprises, many healthcare providers also lack key analytics technologies (Figure 3 and sidebar). Figure 3: Healthcare Providers Trail in Analytics Technologies Source: Aberdeen Group, January 2012 The lack of pervasive analytics noted earlier is apparent in the relative lack of dashboard usage, for example. Best-in-Class organizations are 55% more likely to use executive (or strategic) dashboards than healthcare providers. When it comes to operational (or tactical) dashboards - used to provide insights into daily operations - the gap between healthcare providers and top performing organizations is even greater. While only one quarter (25%) of the healthcare organizations using BI use operational dashboards, 57% of Best-in-Class enterprises do so. Dashboards can provide a rapid update on key metrics for executives and managers - and for those truly on the run, can even be displayed on smartphones or tablet computers. Dashboards can also provide some measure of interactivity, such as "drill-down" capabilities (see sidebar definitions). The ability for managers to manipulate data directly, hands-on, can significantly impact the time required for them to understand an emerging situation and react accordingly. Key Takeaways Like it or not, healthcare delivery in the western hemisphere is embarking on radical change. Healthcare is going to be value-oriented and data-driven. Healthcare providers should consider the following courses of action: • Drive the pervasive use of analytics. Without reliable, consistent measurement of operating performance across the organization, continuous incremental improvement in performance is immensely hard to attain. One of the reasons that Best-in-Class companies have been able to drive operational improvements in so many parts of the business is because the use of analytics is so 25% 38% 57% 59% 0% 20% 40% 60% Operational Dashboards Executive Dashboards Percentage of respondents, n=422 Best-in-Class Healthcare organizations Best-in-Class Technologies Other notable technologies that Best-in-Class companies are more likely to possess than healthcare organizations include: √ Drill-down capabilities - 45% vs. 30% √ Data management and data quality tools - 64% vs. 38% "PPACA will force hospitals, including mine, to monitor and improve patient outcomes. Initially, the legislation will result in decreased profitability." ~ Melissa Knudsen, Manager, Performance Analytics and Business Intelligence, Truman Medical Centers
  • 8. Healthcare Analytics: Has the Need Ever Been Greater? Page 7 © 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897 pervasive. Over 50% of Best-in-Class enterprises use business intelligence widely in eight business functions. Conversely, the sole business function where analytics is commonplace in healthcare organizations is in finance and administration. • Organizational culture is king. Many healthcare organizations have operated in a fee-for-service world where improving operational efficiencies was a low priority. Healthcare reform will change that - and organizational culture must change along with it. Healthcare providers must put a strong cultural emphasis on being data-driven. Choosing a technology for analytics is the easy part - changing individual and corporate mindsets can be much more challenging. For example, Best-in-Class organizations are over 3 times more likely to have instilled the need for data quality, and twice as likely to have KPIs defined for all aspects of the enterprise, compared to healthcare organizations. Changing attitudes to data quality and measurement needs to be initiated at the executive level. • Don't just invest in analytics, invest in complementary technologies too. Top-performing organizations are more than twice as likely as healthcare organizations to invest in analytics technologies, such as operational dashboards (57% vs. 25%). But, other technologies should not be overlooked. For example, 64% of Best-in-Class firms invest in data quality tools, while 53% invest in corporate-wide portal that can help to disseminate key performance indicators throughout the organization. For more information on this or other research topics, please visit www.aberdeen.com. "Making things more visual and interactive for managers means then that when they have that ‘a-ha’ moment they can actually do something about it instead of just setting up a meeting with IT. There’s been a noticeable change in meetings because the data isn’t static and it’s something that people can interact with and get answers in close to real-time while the key decision makers and thought leaders are in the room." ~ IT Manager, Large Consumer Packaged Goods Manufacturer
  • 9. Healthcare Analytics: Has the Need Ever Been Greater? Page 8 © 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897 Related Research Agile or Fragile? Your Analytics, Your Choice; July 2012 Beyond Agile Analytics: Is Agile Data Integration Next; June 2012 Managing the TCO of BI: The Path to ROI is Paved with Adoption; May 2012 High Performance Organizations Empower Employees with Real-Time Mobile Analytics; April 2012 Picture this: Self-Service BI through Data Discovery &Visualization; March 2012 SaaS BI: The Compelling Economics of Cloud-based Analytics; February 2012 Operational Intelligence - Part 1: Driving Performance with Tactical Visibility; February 2012 Migrating from Reports to Dashboards: Upgrading your Business Intelligence; August 2011 Surviving Healthcare Reform with Data- Driven Decisions; May 2010 BI in Healthcare – A Prescription for Good Financial Health; December 2009 Author: David White, Senior Research Analyst, Business Intelligence, (david.white@aberdeen.com) For more than two decades, Aberdeen's research has been helping corporations worldwide become Best-in-Class. Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provide organizations with the facts that matter — the facts that enable companies to get ahead and drive results. That's why our research is relied on by more than 2.5 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of the Technology 500. As a Harte-Hanks Company, Aberdeen’s research provides insight and analysis to the Harte-Hanks community of local, regional, national and international marketing executives. Combined, we help our customers leverage the power of insight to deliver innovative multichannel marketing programs that drive business-changing results. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 854-5200, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com. This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc. (2012a)