How Clinical Analytics Will Improve the Cost and Quality of Healthcare Delivery

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How Clinical Analytics Will Improve the
Cost and Quality of Healthcare Delivery
By Dan Burton

Healthcare Clinical Analytics
Healthcare reform has led to countless
initiatives designed to improve both the
cost and quality of care delivery. And
now, for the first time in the history of
U.S. healthcare, health systems need
to measure and report on the care
they’re delivering.

Healthcare reform has led to
countless initiatives designed to
improve both the cost and quality
of care delivery.
For the first time in the history of
U.S. healthcare, health systems
must measure and report on the
care they’re delivering.
As a result of the Centers for
Medicare and Medicare (CMS)
EHR Incentive Program providers
have a rich source of data
captured in their mandatory
electronic health records (EHRs).

The next step is for health
systems and providers to use
clinical analytics to analyze
their data to help them achieve
success with the following
three healthcare initiatives:
Shift from fee-for-service reimbursements
to value-based purchasing
Accountable care organizations (ACOs)
Value-based insurance design (VBID)

INITIATIVES
CLINICAL
ANALYTICS
1
Before the Affordable Care Act
established the Hospital Value-
Based Purchasing Program in
2010, hospitals received
payment based on the volume
of care they provided.
This fee-for-service
reimbursement program in
some cases encouraged the
overuse of healthcare services
without necessarily improving
care outcomes.

Health systems are facing the
greatest financial challenge in
their history as they transition
to value-based purchasing.
With payments now hinging
upon quality, focusing solely
on old metrics won’t bring
financial success.
Instead, health systems must
concentrate on lowering
healthcare costs while also
providing greater value and
higher quality.
INITIATIVES
CLINICAL
ANALYTICS
1

In specific, clinical analytics make it possible
for health systems to do the following:
• Reduce waste
• Improve margins
• Improve performance
• Streamline operations
• Automatically track quality measures
• Succeed in shared savings arrangements
• Fully understand the cost structure
INITIATIVES
CLINICAL
ANALYTICS
1

Accountable Care Organizations (ACOs)
Accountable care organizations
(ACOs) are another healthcare
initiative that encourages groups
of providers to voluntarily give
high-quality, coordinated care to
populations of patients.
The concept of an ACO is still
evolving, but typically the groups
of providers include doctors,
hospitals, health plans, and
others.
INITIATIVES
CLINICAL
ANALYTICS
2

The coordinated care an ACO
offers is designed to give patients
the right kind of care without
adding extra expenses.
ACOs avoid extra expenses by
only ordering care with a proven
benefit and by not ordering
duplicating services, a significant
shift from fee-for-service.
In addition, ACOs are particularly
concerned about making sure the
chronically ill receive proper care.
INITIATIVES
CLINICAL
ANALYTICS
2

With an ACO, there is now a
greater financial reward to
prevent illness rather than
treating those who are already ill.
Preventative care along with a
new focus on using clinically-
proven and effective therapies as
opposed to choosing expensive,
newly developed treatment
options should dramatically
improve care delivery.
INITIATIVES
CLINICAL
ANALYTICS
2

To support ACO goals, health
systems need to have several
critical information systems: an
electronic Medical Record
(EMR), a health information
exchange (HIE), an activity
based costing system (ABC), a
patient reported outcomes
system (PRO), and an EDW.
Despite the considerable amount
invested in these systems,
providers have yet to realize a
decent return on investment
(ROI) because they are unable to
measure the quality of care and
financial risk.
INITIATIVES
CLINICAL
ANALYTICS
2

To unlock the data in their ACO
EMR investment, health systems
need an EDW.
The EDW makes it possible for
analysts to mine and analyze
data from a single repository
holding data from multiple source
systems (clinical, financial,
patient satisfaction, etc.).
Yet, less than 25 percent of
healthcare organizations have
any type of EDW.
INITIATIVES
CLINICAL
ANALYTICS
2

Value-based Insurance Design (VBID)
The sweeping changes occurring
in healthcare require innovative
models of care from providers
and payers. One these new
models is value-based insurance
design (VBID).
The basis of VBID is for
providers to pay increased costs
for specific patient populations
early on in their care to reduce
the costs of care later on.
INITIATIVES
CLINICAL
ANALYTICS
3

For example, one hospital’s goal
to target length of stay following
an appendectomy as a key
opportunity for quality and
financial improvement.
Using clinical data analytics they
discovered that one specific,
expensive antibiotic significantly
decreased length of stay, more
than making up for the difference
in cost to provide the more
expensive antibiotic.
INITIATIVES
CLINICAL
ANALYTICS
3

When working to cut costs,
prescribing a more expensive
treatment doesn’t seem logical
— unless evidence based data
supports the entire story.
By using clinical analytics and
easy-to-understand dashboards,
clinicians can use real-time data
to discover treatments based on
best practices and outcomes.
Using this data, both providers
and payers can achieve higher
quality at lower costs.
INITIATIVES
CLINICAL
ANALYTICS
3

Healthcare transformation made
possible with clinical analytics
Healthcare transformation
has a long way to go before
true cost reduction and
quality improvements are the
mainstay.
The journey won’t be easy —
but it’s critical to improve the
health of our nation and to
curb the rising costs of
healthcare

More about this topic
How to Evaluate a Clinical Analytics Vendor: A Checklist
Dale Sanders, Senior Vice President, Strategy
Why An EMR Can’t Solve Your Most Important Healthcare Transformation Challenges
Dan Burton, Chief Executive Officer
Healthcare Informatics: A New Wave of Advanced Clinical Analytics
Steve Barlow, Co-founder and Senior Vice President, Client Operations
Building a High-quality Cancer Care Delivery System
A Success Story from a Large Health System
Healthcare Analytics 2.0: The Age of Analytics (free, on-demand webinar, slides, and transcript)
Dale Sanders, Senior Vice President, Strategy

For more information:

Other Clinical Quality Improvement Resources
Click to read additional information at www.healthcatalyst.com
Dan Burton serves as CEO of Health Catalyst, a healthcare data
warehousing and analytics company. He became involved with Health
Catalyst when it was a three-person startup. Mr. Burton is also the co-
founder of HB Ventures, the first investor in Health Catalyst. Prior to Health
Catalyst and HB Ventures, Mr. Burton led the Corporate Strategy Group at
Micron Technology (NASDAQ: MU).
He also spent eight years with Hewlett-Packard (NYSE: HPQ) in strategy and
marketing management roles. Before joining HP he was an associate consultant with
the Boston Consulting Group, where he advised healthcare systems and technology
companies. Mr. Burton holds an MBA with high distinction from Harvard University,
where he was elected a George F. Baker Scholar, and a BS in economics, magna cum
laude, from BYU.

How Clinical Analytics Will Improve the Cost and Quality of Healthcare Delivery

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How Clinical Analytics Will Improve the Cost and Quality of Healthcare Delivery