Lack of trustworthy data slows move to operational efficiency

Boston Medical Center's Yi-An Huang had the raw data to improve the provider's operations but lacked the tools to take action efficiently.

The safety-net hospital, like many other providers, underutilized its scheduled surgery blocks that had fixed labor costs with staff ready to assist operations even if there were gaps between procedures.

Huang, senior director of procedural operations at Boston Medical, took on the tedious task of analyzing the months-old data in Excel to try to maximize surgery output and best use surgeons' time.

He would copy hundreds of pages of the hospital's surgery block scheduling data from PDFs into Excel to try to make sense of it. The 50-page monthly reports, generated by Epic's EHR, included surgeon schedules, daily blocks of reserved operating room time and how much of the blocks were being used.

It was a reactive approach to a fluid situation that required real-time data analytics, he said.

"The reality is that hospitals are places swimming in data but have very little insight and it is difficult to turn the data into something they can take action on," he said.

Boston Medical turned to software provider Hospital IQ to update surgery block schedules in real time as surgeons' schedules change and demand shifts. Hospital IQ analyzed the data that maximized scheduling as verifiable patterns surfaced.

It helped the hospital streamline operations, attract top physicians and maximize revenue while delivering care quicker. Boston Medical increased its operating room volume 3% to 5% each of the last two years, translating to more than $3 million in unrealized annual revenue and happier doctors and patients, Huang said.

"Being able to take the data and use it as a tool to visualize what our performance looks like and highlight opportunities to improve is pretty invaluable," he said.

Providers like Boston Medical aim to revamp outdated processes by leveraging data analytics technology to try to boost revenue, improve operations and satisfy value-based metrics. But research shows that once providers have implemented surface-level cost reductions, a lack of trustworthy data and other issues slow further progress.

A recent study from consulting firm Kaufman Hall found that a quarter of hospital and health system executives surveyed had no cost reduction goals for the next five years. Twenty-six percent have a goal to reduce costs by 1% to 5%—a range that won't make a dent in transforming cost structures and unlikely even to keep pace with inflation, researchers said.

"This is not business as usual, involving incremental change," said Dr. Walter Morrissey, Kaufman Hall managing director. "To meet community needs under healthcare's new business imperatives and to participate as a provider of choice in narrow networks developing nationwide, organizations must have a strong value proposition and a cost position that is significantly lower than competitors."

Nearly 80% of respondents said they need to revise their cost structure proactively to align with value-based care and nearly 70% acknowledge that they must close the gap between their financial plan and current operating performance.

But only a quarter said they trust their data or insight into cost trends and savings opportunities needed to drive change. Similar studies have shown that smaller providers lack the resources and cash flow to build out new infrastructure and train staff to drive cost reductions.

"Everyone has data, but most people don't know how to process it or what to do with it," said Rich Krueger, CEO of Hospital IQ. "We can provide better data to forecast and optimize staff and improve access but we can't make them change. Once you trust the data, it can change the game of care and access."

Part of the problem is that providers are stuck between the two worlds of fee-for-service and value-based medicine, which makes it hard to implement broad cost-cutting strategies, said Rita Numerof, president and co-founder of consultancy Numerof & Associates.

"When you have a system that has made money by driving patients to the hospital, you wind up having an inherent conflict between the goal of keeping the lights on in an expensive facility and delivering affordable and accessible care," she said.

Researchers recommended reshaping providers' portfolio of services and businesses, redesigning the care model for improved effectiveness and efficiency, and reconfiguring the workforce.

"Many smaller hospitals and health systems lack the strategic management processes, corporate resources and capabilities to remain competitive in the short term or relevant in the long term," said Dr. Yele Aluko, an executive director in the advisory health practice at global consulting firm EY.

It's an exciting time to be in healthcare, but many providers are still stuck in the dark ages, Huang said.

"We are still using stone tools to conduct sophisticated analysis," he said. "It makes sense to enlist companies that can code and build analytic platforms that support hospital operations."