By Justin Valley, MBA
As we wrap up our series, The Journey to the Cost Per Unit of Care, it’s clear that understanding the true cost of care is extremely difficult. Throughout each article there has been a common theme – medical practices require more data to be able to affect the cost of healthcare – which reiterates what Porter & Lee wrote in The Strategy That Will Fix Health Care, “rapid improvement in any field requires measuring results… Teams improve and excel by tracking progress over time and comparing their performance to that of their peers inside and outside their organization.”
Practices are beginning to recognize that owning and understanding their data places them at a competitive advantage in the marketplace. Their ability to succeed under bundled payments and other value-based payment methodologies hinges on their capacity to track and measure costs and outcomes for specific medical conditions, not just by intervention or specialty. For practices to make the transition to a data-driven organization they need to embrace it from the top and build it into their strategic plan.
The level of analytical sophistication required to be able to develop the types of meaningful insights that are needed to accurately measure the cost of care has posed a major roadblock given the disparate data systems and heavy administrative costs involved in detailed expense tracking. Hospitals and Insurance companies have mostly narrowed the gap, investing heavily in IT resources and new technologies to reduce reporting burdens and decentralize access to data driven insights for the entire organization. For smaller independent medical practices, the hurdle remains high. Theses medical practices still largely lack the resources and expertise necessary to understand and define the key drivers of business success and operate using outdated and insufficient processes and tools. Unfortunately, smaller organizations simply lack the budgets, internal resources, and time necessary to build up their business intelligence capabilities, and thus they have been largely neglected by the vendor community.
The ability to track and measure costs is a huge milestone to achieve but, on its own, not enough. For practices to gain a deeper understanding of where they are, where they want to be, and how to get there, they need to measure their performance against that of others. The ability for practices to accurately and timely benchmark their performance against peers, both locally and nationally, is key to rapidly improving performance. Unfortunately, relevant benchmarks that independent medical practices can use to make timely apples-to-apples comparisons of their performance aren’t readily available. The few sources of benchmark data that do exist rely on voluntary submittal of hand keyed data, suffer from a lack of standard definitions, are often based on data that has not been through any cleaning process to ensure its validity, and are typically several years old by the time they are published.
By combining disparate data systems into one cohesive reporting architecture, DataDx is helping medical practices gain insights into the drivers of their cost per unit of care. Using real time analytics to provide actionable information, DataDx is enabling practices to see if implemented changes are having the desired effect and to make data-driven decisions to improve their business. Through benchmarking with other like practices on the DataDx platform, practices can measure their performance against peers and identify trends in the marketplace without the delay associated with traditional data sources. As data continues to be the driving force of change in healthcare, DataDx strives to be on the cutting edge of analytics; providing practices the unique insights needed for success.
Justin Valley, MBA
Justin has over sixteen years working with clinics, hospitals, and health systems and specializes in medical practice management, operational and financial improvement, and strategic planning. As a Lean Six Sigma Black Belt, Justin helps his clients increase efficiency, reduce waste, build capacity, and maximize productivity. Justin received a Bachelor of Science in Healthcare Administration from Oregon State University and a Master of Business Administration from OHSU and Portland State University. Contact Justin at: email@example.com