Health IT Summit Miami 2015 - Keynote Presentation "Creating Competitive Advantage Through Analytics"

Creating Competitive Advantage Using Analytics
Jon Scholl, Chief Strategy Officer at Texas Health Resources
February 11, 2015

Texas Health Resources – Who we are
• Our Mission: “To improve the health of the people in the communities we serve”
• THR is one of the largest faith-based, nonprofit health systems in the US
− 21K employees
− 25 acute care, transitional, rehab and short-stay hospitals that are owned,
joint-ventured or affiliated
• 17 acute-care hospitals
• 6 short-stay hospitals
− 3,800 licensed hospital beds
− 59 outpatient facilities, surgery centers,
fitness centers, and imaging centers
− More 250 other community access points
− $3.7 billion in operating revenue (FY 2012)
2/17/2015 2
Confidential And Proprietary – All Rights Reserved – For Internal Use Only
Texas Health Resources
** Physicians on the medical staff practice independently and are not employees or agents of the hospital or Texas Health Resources.
• Texas Health Physicians Group with
560 physicians and more than 240
advanced practitioners

Target Video
2/11/2015 3

Guest ID predictive analytics
− Useful patterns in buying
behavior emerge
− Pregnancy prediction score
− Target sends timed
coupons relevant to each
stage of pregnancy
• Target determines
customer’s potential to
spend, markets to identified
customers
Are you pregnant? If so, Target knows!
4
Texas Health Resources2/11/2015
Source: Andrew Pole, Target Analytics

Caesars Entertainment “Total Gold” loyalty program
5
“We know if you like golf ... chardonnay, down pillows, if
you like your room close to the elevator, which properties
you visit, what games you play and which offers you
redeemed….We not only use these things on the front end
of marketing but for the service experience”
24% increase in spending from loyal customers,
82% of revenue base

Marriott International : micro-segmenting the
demand curve
“One Yield” revenue management
system
− Frequent pricing adjustments to
account for changing conditions
− Predictive models to maximize yield
− Extended to catering, restaurants and
meeting space
• Marriott Rewards micro-segments
most profitable customers and targets
offers
2/11/2015 6
Source: Competing on Analytics,
HBR, 2006
$86M in increased profits

Basis for Competitive Advantage
• Since the 1950s, volatility in operating margins (historically stable), has more
than doubled
• More than 40% of GDP comes from companies where the industry market share
is considered volatile and highly unpredictable
• 1960s Portfolio Theory (growth/share) is evaporating as share position and
market power are becoming less linked
− BCG calculated that the probability that market share leader = profit leader is
less than 7 percent, down from 34 percent in the 1950s
• The historical frameworks for strategic advantage are under fire
− Scale and position can be fleeting
− Industry borders are becoming less defined, more fluid
− Forecasting is unreliable
− Data rich, information starved
− Rapid change = planning tools are less accurate and less important
2/11/2015 7

Analytics competitors (i)
8
Supply Chain
Customer selection,
loyalty, and service
Source: Competing on Analytics,
HBR, 2006

Analytics competitors (ii)
9
Texas Health Resources2/11/20152/11/2015 Source: Competing on Analytics,
HBR, 2006
Human capitalPricing
Research and
development

Data analytics as a competitive advantage
• Data analytics has become increasingly important to organizations
looking for a competitive edge
• Rapid advances the use of real-time data has been enabled by
technology
− Additional access points created through online interactions
− Increasing adoption of large customer-centric data warehouses
− Healthcare: transition to Electronic Health Records has enabled
searchable real-time clinical data
2/11/2015 10
Source: Accenture survey of 600 Executive Leaders 2013
Aggressively using
analytics
33%
Senior management
engaged with analytics
68%
Have senior figure such
as a “Chief Data Officer”
2/3

Industry interest in data analytics was
jumpstarted in 2007
2/11/2015 11
"Make analytics part of your
overarching competitive
strategy, and push it down to
decision makers at every
level. You'll arm your
employees...for making the
best decisions - big and small,
every day“
- Thomas Davenport, 2007

Health Care: Investments in predictive funding
increased 5X in 3 years
2/11/2015 12
$902M
$520M
$300M
$201M
2011 2012 2013
5X
2014
Predicting Funding
Venture funding for companies using predictive analytics (2011-Q3 2014)
Source: RockHealth

Go Big…..or Go Little?
DATA DATA
13
Collecting unique data
about the customer, the
vendor, the location, and
interactions
Collecting giant stream of
digital metadata to mine
common behavior
patterns
BIG Little

Electronic Health Predictive (e-HPA) Analysis can
be used to predict future clinical events
Through analysis we can…
2/11/2015
Texas Health Resources 14
Stratify patients according to risk level
Allocate scarce clinical resources
Prevent adverse or harmful events
1
2
3

From admission to 90 days post discharge; six
activities reduce readmissions
2/11/2015 15
Post 90 Days
Identify HF
Patients
Risk Stratify
& Rank
Notify Team
Discharge
Plan
Monitoring
& IP/OP
interventions
Ongoing
Analysis
Admission
1 3 5
2 4 6
Discharge

How the patient is identified as a risk:
Natural Language Processing
“68 yo WF presents with acute on chronic non
ischemic systolic and diastolic chf, severely
depressed ef and grade ii diastolic dysfunction.”
2/11/2015
Notes from EMR:

Natural Language Processing Interpretation
2/11/2015 17
Disease/ Symptom Time Attribute
Acute Heart Failure current and
primary
• Systolic, significant depression in
ejection fraction;
• Diastolic dysfunction, grade 2
• Non-ischemic
Chronic Heart
Failure
historic
Software
Interpretation:

Outcomes
2/11/2015
8.5%
Readmissions Spend $1
$4.59

Pieces™ gives THR a measureable benefit
Feedback from clinicians and case management
• “Pieces real-time risk scoring allows us to be notified of cases
earlier.”
• “Task management is simplified with integration in Epic system
list and order sets.”
• “Appreciate ability to enroll medium risk patients.”
• “No need for separate manual process.”
• “Pieces identification of heart failure patients was accurate.”
2/11/2015 19

Cost goes down when well-being goes up
2/11/201521
1%Well-Being
2.2%
likelihood of
hospital
admission
1.7%
likelihood of
ER visit
1.0%
likelihood of
incurring
healthcare costs
Source: “Evaluation of the Relationship Between Individual Well-Being and Future Health Care Utilization and Cost”
Population Health Management, Volume 15, Number 00 2012. Patricia L. Harrison, MPH, James E. Pope, MD, Carter R.
Coberley, PhD, and Elizabeth Y. Rula, PhD

Fortune 50 case study: Results
3/26/201322
Individual Well-Being Score
%ofEmployees
2011: Average 71.0
2012: Average 73.9
(std dev = 13.4)
(std dev = 13.6)
Δ= 2.9*
Well-Being Improved Significantly
in Matched Respondents
T1-T2 Matched Cohort, N = 780
*Paired sample t-test, p < 0.05

Translating odds to probability of business
impact
3/26/201323
ER Visit Next 12 Months
Turnover Intention
1+ Absence / Month
Being Rated a
“High Performer”
Based on the odds,
the chance of…
Well-being Segment
Fortune 50 Case Study
Probability of occurrence

The dark green shows where WB5 scores are
high; light green represents low scores
2/11/2015 24
We will target assets and
physicians to populations
and geographies
Incorporate data into
predictive risk analysis Incorporate data in employer
wellness offerings

Analytics has proved to be a powerful tool in the
commercial industry; now applies to healthcare
2/11/2015 25
Advances in technology have made
it possible for us to utilize analytics
in Healthcare
Well-Being
Inpatient
events

What’s next for healthcare….
26
We have invested in EMR systems …so we have
data…what should we do with it?
IT
Infrastructure
& Integration
Interpreters of
data
Organizational
Commitment
1 2 3
EMR Systems
1
Investment NeededDone

Healthcare is ripe for analytics competitors;
current organizations will have to invest
• Strategic guidance (“what do
we want to know?”)
− pmpm population health
reports
− Network quality and
utilization
• Walk, then run
27
Organize for success… …and keep an eye on the future

Summary
• The pace and change of Healthcare is unprecedented
• What will be the new source of competitive advantage in this industry?
− Power and influence or deep understanding of the analytics of the industry?
• Of all industries, Healthcare is ripe for analytic-competitors
• Requires key elements to succeed
− Organizing for success
− Strategic guidance (“what do we want to know?”)
• pmpm population health reports
• Network quality and utilization
• Etc
− Walk, then run
2/11/2015 28

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