Fragmented Data Can Be Barrier to Population Health, Healthy Margins

Healthcare financial leaders often lack a true understanding of the cost of care across service lines or populations. Focusing too much on clinical data from the medical record can lead to overlooking critical claims and demographic data.

Managing costs across populations and networks depends on constant and thorough data analysis, but CFOs and other hospital leaders often are working with incomplete data as they make critical decisions about resources and revenue.

Fifty-eight percent of healthcare leader respondents in the June 2017 HealthLeaders Media survey, Cost and Revenue Strategies, cited that the lack of data on the true cost of care was the biggest barrier to achieving sustainable cost reductions.

Data fragmentation will make it difficult for many healthcare organizations to move to value-based care, says SCIO Health Analytics President Rose Higgins. Headquartered in West Hartford, Connecticut, SCIO provides analytics to support healthcare organizations.

"This becomes critical in the path to profitability. Most hospitals and healthcare systems, physician groups as well, are living with a tremendous amount of margin compression," she says. "When you couple that with the uncertainty of payment changes, revisions of the Affordable Care Act, and other developments, it becomes difficult to ensure operational effectiveness without understanding what's occurring in the populations you treat—particularly the populations with which you have risk-based contracts."

Taking on a commercial or CMS-based risk for certain patient populations makes it critical to know the costs of care across all settings of care, she says.

In the HealthLeaders Media survey, 36% of respondents said that they could determine the true cost of care for all (6%) or most (30%) of the care provided, while 51% said they could do it for some care provided, and 13% said that they were unable to determine the true cost for any care that they provided.

"When part of that care takes [you] outside your own borders, you can have leakage of revenue into other organizations," she says. "Making sure you have visibility to available data from those locations in which care delivered is important, or a proxy for that data such as claims data that can give you a more fulsome view into what's transpiring and the financial impact."

Twenty-six percent of survey respondents said they expected that by using information technology to target inappropriate claim denials, this could yield a positive financial impact for their most recent fiscal year.

Partnering

Fragmented data also can be problematic when the organizations looks at profitability and wants to consider partnerships with service lines, because it is important to understand the population and radius of care before aligning with them, she says. Contracting at the network level also requires understanding the potential volume gained in return for offering a lower price, for example.

"Fragmentation of data makes that a tough task for most organizations to accomplish," Higgins says.

Healthcare leaders are addressing data fragmentation by creating more partnerships that allow the sharing of data across organizational boundaries, as well as embracing price transparency that affords a more a level playing field with employers who can share data about their patient populations.

Forty percent of the survey respondents said that their organizations provided price transparency to patients for all (12%) or most (28%) care. Forty-one said that their organizations did this for some care provided, and 18% said that they were unable to do this for any of the care that they provided.

Healthcare organizations also are looking at data in more of a strategic marketing context, Higgins says, getting a better idea of the demographics they serve and the companies that might offer a good market for expansion.

"Organizations that are interested in taking risks and being part of narrow networks or tiered network strategies have to get to this level of data to successfully protect their margins and create revenue upticks," she says. "For those organizations that placed a bet on clinically integrated networks and looked at that as a means of creating a referral feeder into their organizations for certain types of services, it is crucial to do a thorough analysis on the productivity and efficiency of that, integrating these various sets of data. You need those different data sets so that you can look at them strategically."

A common mistake is to think only in terms of clinical and transaction-based data, Higgins says. A claims view, at a minimum, also is necessary to get a true view on costs.

"Organizations that spend all their time and resources on clinical and transaction-based data derived from the EHR are going to fall short of that longer-term impact you're hoping for," she says. "You'll be able to manage the clinical care that's delivered in that setting and manage the key quality metrics you're required to report but, ultimately, you cannot truly understand the picture of what's happening with populations and service lines. Claims are absolutely required to do that."

CFOs should think of data as an asset with both strategic and operational value, Higgin says. Invest in data science both within the organization but also with partnerships that enable access to the most needed data.

"Those resources are often in short supply, so making decisions about how you invest and who you partner with is key," Higgins says. "You have to be willing to make those investments and commit your organization to not just acquiring this data but also integrating it and deriving value from the data. You then have a rich set of insights that can help inform your operations as well as your strategic intentions, and you can build competency that will help you be successful in some very uncertain circumstances."