The document discusses assessing the value of analytic tools used in hospitals. It notes that hospitals spend a lot annually maintaining tools for cost accounting, decision support, and contract management. The document provides steps for hospitals to take in assessing their tools, including making an inventory of current tools, assessing costs and benefits, and identifying strengths, weaknesses, opportunities, and threats. It also describes techniques like brainstorming, SCAMPER, and the futures wheel that can be used to evaluate tools and identify potential alternatives or areas of improvement. The overall goal is to ensure the tools provide good return on investment and meet the changing needs of healthcare.

1. ARE YOUR ANALYTIC
TOOLS REALLY
ADDING VALUE?
HFMA Financial Accounting & Reporting Committee
Thursday, August 14th
8:30 am - 10:30 am

2. ANALYTIC TOOLS are one of the most
efficient ways that can be used for ensuring
good profit from the hospital’s investments.
These tools are highly helpful in evaluating
the market, and investing in a way so as to
maximize the profit from the investments
made. They should be useful for
deciphering both internal and external
information related to a specific business
organization.

3. Hospitals spend a lot each year
on buying and maintaining
analytic tools such as cost
accounting, decision support,
and contract management
systems.

4. BUT IS IT BEING
SPENT WISELY?

5. IS CHANGING
Health Care
as we knew it

6. AND WITH IT . . . .
Our NEEDS for analytical tools
SHOULD BE changing too

7. Is there a TOOL or METHOD
that is
 Better ROI?
 Just as Accurate?
 Fits our needs going
forward?

8. ASSESSING YOUR TOOLS

9. 1. INVENTORY OF TOOLS
CATEGORY TOOL SOURCE SYSTEM
Financial Ratio Analysis
Software
1. Tool 1
2. Tool 2
System 1
System 2
System 3
Financial & Management
reporting
1. Tool 1
2. Tool 2
• System 1
• System 2
• System 3
• System 4
Planning, budgeting, and
forecasting
1. Tool 1
2. Tool 2
• System 1
• System 2
• System 3
Strategy management &
scorecards
1. Tool 1
2. Tool 2
• System 1
• System 2
• System 3
• System 4
Cost and profitability
management
1. Tool 1
2. Tool 2
• System 1
• System 2
• System 3
Working capital & cash
flow management
1. Tool 1
2. Tool 2
• System 1
• System 2
• System 3

10. 2. FINANCIAL ASSESSMENT:
Cost & Profitability Management
TOOL
AGE
(years)
INITIAL
COST
ANNUAL
COST
RESOURCES
AGE
(years)
Special
COSTS
Cost
Accounting
7 $148,500 $103,800 EHR 2 $2,500
Data
warehouse
6 $4,000
Billing 8 $3,800
Misc 1 3 $1,500
Misc 2 5 $1,500

11. WHAT IS IT REALLY COSTING?
DIRECT COSTS
• Software & license fees
• Implementation cost
• Ongoing Training costs
• Maintenance fees
• Manuals
• Dedicated IT FTEs
OTHER COSTS
• Error rate for improper
usage
• System interface errors
due to changes/ updates
• Age of tools
• Changes to how we do /
look at business

12. Cost Accounting Expenses
First Year Annual
Software license $ 35,000
Implementation 95,000
Training 15,000
General Maintenance $ 15,000
System Interface 13,300
Manuals 3,500 500
Dedicated IT 25,000
Dedicated User 50,000
TOTAL $ 148,500 $ 103,800

13. 3. ASSESSING YOUR TOOLS
S – Strength
W – Weaknesses
O – Opportunities
T – Threats

14. Define BEST PRACTICE
Identify the fundamentals that
provides the necessary tools and
concepts required for providers to
successfully compete in today’s
marketplace.

15. Cost Accounting SWOT
BEST PRACTICE:
A system that will be critical in
supporting tactical business decisions
and enhancing profitability; in addition
to supporting the organization’s
concepts, techniques, and practices.

16. Cost Accounting SWOT
Strengths Weakness Opportunity Threats
1. Inventory valuation
2. Product pricing
3. Cost analysis
4. Resource
consumption cost
concepts
5. Cost planning

17. Cost Accounting SWOT
Strengths Weakness Opportunity Threats
6. COST MGT TOOLS
a. Direct costing
b. Cost-volume-profit
analysis
c. Target costing
d. Cost object analysis
e. Constraint analysis
f. Process analysis
g. Zero base budgeting

18. Cost Accounting SWOT
Strengths Weakness Opportunity Threats
7. Cost Mgt by Function
a. Overall reduction
strategy
b. Compensation cost
reduction
c. Benefits cost reduction
d. Marketing effectiveness
e. Production &
maintenance reduction
f. Procurement cost
g. Administration cost
h. Facilities cost
i. Finance cost

19. 4. SUMMARY OF INTERNAL TOOLS
CATEGORY TOOL ASSESSMENT
Financial Ratio Analysis
Software
1. Tool 1
2. Tool 2
1. Revisit in 2016
2. Research new vendors / alternatives
Financial & Management
reporting
1. Tool 1
2. Tool 2
1. Revisit in 2015
2. Research new vendors / alternatives
Planning, budgeting, and
forecasting
1. Tool 1
2. Tool 2
1. Revisit in 2016
2. Research new vendors / alternatives
Strategy management &
scorecards
1. Tool 1
2. Tool 2
1. Research new vendors / alternatives
2. Research new vendors / alternatives
Cost and profitability
management
1. Cost Accounting
2. Tool 2
1. Research new vendors / alternatives
2. Research new vendors / alternatives
Working capital & cash
flow management
1. Tool 1
2. Tool 2
1. Revisit in 2016
2. Research new vendors / alternatives

20. MAKING CHANGE

21. 5. Cost and profitability management:
Cost Accounting
CHOICE
Tool B
Tool A
Alternative
1

22. 5. Cost and profitability management:
Cost Accounting
Brainstorm
Assign
monetary value
to costs
Assign
monetary value
to benefits
CompareChoose

23. BRAINSTORMING
Brainstorming provides
opportunity to create new ideas
through group thinking.
The problem is the internal group is
often “stuck in a rut”.

24. TECHNIQUES
Conventional group problem solving
can often be undermined by unhelpful
group behavior . And while it's
important to start with a structured,
analytical process when solving
problems, this can lead a group to
develop limited and unimaginative
ideas.

25. TECHNIQUES
By contrast, brainstorming provides a free and
open environment that encourages everyone to
participate. Quirky ideas are welcomed and
developed. All participants are encouraged to
contribute fully, helping them develop a rich array
of creative solutions and buy-in.
• brings team members' diverse experience into
play
• increases the richness of ideas explored
• often find better solutions to the problems that
faced

26. TECHNIQUES
•Individual Brainstorming
•Group Brainstorming
• Reverse
• Round-robin
•SCAMPER
•Futures Wheel

27. BRAINSTORMING Steps
1. Explain the problem or imitative.
2. Give each person index cards to record their ideas individually
3. Have each team member, in silence, think of one idea and
write it down on an index card. The goal is to allow individual
people to think creatively without any influence form others.
4. Once everyone has written down an idea, you can pass their
idea to person next to them or share ideas.
5. Each person should use their neighbor's idea as inspiration to
create another idea.
6. Continue this circular idea for as long as is necessary to gather
a good amount of ideas. When the time is up, gather up all
the ideas. You can now collate them, eliminate any duplicates
and discuss them further as required.

28. SCAMPER
Acronym for
• Substitute
• Combine
• Adapt
• Modify
• Put to another use
• Eliminate
• Reverse

29. SCAMPER Steps
You use the tool by asking questions
about existing products, processes,
services, or people using each of the
seven prompts in previous slide.
These questions help you come up
with creative ideas for developing new
products, and for improving current
ones.

30. SCAMPER Steps
1. Take an existing product or service. This could be one
that you want to improve, one that you're currently
having problems with, or one that you think could be a
good starting point for future development.
2. Ask questions about the product you identified, using the
SCAMPER mnemonic to guide you. Brainstorm as many
questions and answers as you can. (Examples follow)
3. Look at the answers that you came up with. Do any stand
out as viable solutions? Could you use any of them to
create a new product, or develop an existing one? If any
of your ideas seem viable, then you can explore them
further.

31. SCAMPER Steps
Substitute
• What materials or resources can you substitute or swap to improve the product?
• What other product or process could you use?
• What rules could you substitute?
• Can you use this product somewhere else, or as a substitute for something else?
• What will happen if you change your feelings or attitude toward this product?
Combine
• What would happen if you combined this product with another, to create something new?
• What if you combined purposes or objectives?
• What could you combine to maximize the uses of this product?
• How could you combine talent and resources to create a new approach to this product?
Adapt
• How could you adapt or readjust this product to serve another purpose or use?
• What else is the product like?
• Who or what could you emulate to adapt this product?
• What else is like your product?
• What other context could you put your product into?
• What other products or ideas could you use for inspiration?

32. SCAMPER Steps
Modify
• How could you change the shape, look, or feel of your product?
• What could you add to modify this product?
• What could you emphasize or highlight to create more value?
• What element of this product could you strengthen to create something new?
Put to Another Use
• Can you use this product somewhere else, perhaps in another industry?
• Who else could use this product?
• How would this product behave differently in another setting?
• Could you recycle the waste from this product to make something new?
Eliminate
• How could you streamline or simplify this product?
• What features, parts, or rules could you eliminate?
• What could you understate or tone down?
• How could you make it smaller, faster, lighter, or more fun?
• What would happen if you took away part of this product? What would you have in its place?
Reverse
• What would happen if you reversed this process or sequenced things differently?
• What if you try to do the exact opposite of what you're trying to do now?
• What components could you substitute to change the order of this product?
• What roles could you reverse or swap?
• How could you reorganize this product?

33. THE FUTURES WHEEL
Visual tool that gives a structured way
of brainstorming the direct and indirect
consequences of a decision, event, or
trend

34. The Futures
Wheel

35. How to Use Tool
Identify
Change
• Write down event,
trend, problem, or
possible solution
Identify Direct
1st Order
Consequences
• Inner circles
surrounding
change
Identify Indirect
2nd Order
Consequences
• Outer circles
surrounding
1st Order
Consequenc
es
Analyze
Implications
•Does this
make
sense?
Identify Actions
• Manage
negative;
take
advantage
of positive

36. 6. OUTCOMES
•Chosen new tool
•Weighed pro’s and con’s
•Reviewed alternative
•Evaluated risks and opportunities
•Created best value for the buck

37. ADVANTAGES
Skill
Development
Self Worth
Lower
Turnover
Increase
knowledge
Productivity
Efficiencies

38. Deborah Sieradzki, PhD (586) 292-6446
Debby.Sieradzki@lubawaymasten.com
510 Highland Avenue #311 ◊ Milford, Michigan 48381
(248) 347-1416 (main)
www.lubawaymasten.com