A Conversation With Douglas G. Smith: The Business-intelligence Imperative
Today, more than ever, imaging providers must harness the power of actionable business intelligence in all aspects of their operations, including the communication of quantifiable outcomes to payors, client hospitals, referrers, and patients. Such is the strategy to be explored in each issue of RadAnalytics, under the MedAnalytix.com umbrella. Exactly what is actionable business intelligence, how far have imaging providers come in obtaining it, and why is it important for the short and long term? RadAnalytics sat down with veteran practice consultant Douglas G. Smith, managing partner of Barrington Lakes Group, LLC, Barrington, Illinois, to discuss the fundamentals. RadAnalytics: How successful are imaging providers at extracting actionable information from their IT systems? Smith: Imaging centers, hospital-owned physician groups, physician-group leaders of all stripes, and especially radiology group-practice leaders are inundated with—and paralyzed by—data from their revenue-cycle–management systems, financial reporting systems, PACS, RIS, and quality-management reporting systems. They capture mountains of data in the course of delivering services to patient populations throughout the continuum of care, but few know how to mine those data and convert them to actionable business intelligence. What leaders have at their disposal today are books full of data pertaining to volume, charges, receipts, and adjustments by site of service, modality, and payor; aged–accounts-receivable reports; denied-services reports, by payor and reason code (sometimes); and the ability to drill down into the data to capture comparative information that illustrates year-to-year, month-to-month, and site-to-site comparisons. If the practice is fortunate, certain of these reports are translated into Excel® spreadsheets from which come bar, pie, and, line charts with trend lines that present the data in a more understandable graphic format. Some would call this informatics; I say: not quite. RadAnalytics: Why do providers have so much difficulty extracting the information that they need? Smith: With rare exceptions, output from the various data-capture systems currently in use is tabular in format and retrospective in content. This makes it difficult for even the most rabid accountants, engineers, or data-freak physicians to identify, within that output, the trends, outliers, root causes, or discriminators that would enable meaningful information to spring off the page at them for a particular use. In addition, several of the systems relied on by providers’ leaders—namely, revenue-cycle–management, financial, and quality-assurance reporting solutions—do not typically talk to each other. As a result, what most leaders have today is what I call all data and little to no actionable information. While many technology vendors use the word analytics to describe their systems’ ability to translate certain practice-data elements into pie, line, or bar charts, few solutions possess the functionality to mine data and turn them into actionable information that leaders may apply in formulating strategies for practice improvement, demonstrating differentiation among competitors, and communicating their unique core competencies and differentiation points to their customers. RadAnalytics: What do providers require, in terms of actionable information? Smith: Practices’ physician leaders and executives need both internal analytics (upon which they can make informed decisions regarding a vast array of operational matters) and information they can use externally to demonstrate and communicate value effectively. They require the aha moment—the clarity divined within the so-what data. This clarity—rather than the data in the usual bar, pie, and line charts—is informatics, also known as business intelligence. It is what leaders must know to enable them to engage and influence their universe, and it spans actionable information, information that can be leveraged, and a combination thereof. Actionable information includes variances between practice performance and expectations; staffing’s influence on performance, by subspecialty and site of service; variances between payor performance and expectations; and gross margin contribution, by site of service and modality. Information that can be leveraged encompasses patient populations’ imaging utilization, by site of service; referring physicians’ utilization of imaging, by ordering physician (appropriateness/inappropriateness of orders and unnecessary utilization of services, by physician and physician group); and downstream revenue generation. Information that is simultaneously actionable and able to be leveraged includes profit/loss per service line, by site of service; turnaround time, by site of service and provider; and quality-assurance results, by site of service and provider—and the list goes on from there. RadAnalytics: Why is this important? Smith: For starters, several rules apply. You cannot manage what you cannot measure, nor can you fix what you don’t know is broken or ailing. You cannot leverage strengths if you cannot identify and communicate them effectively, nor can you make forecasts for a business without business intelligence—because data are not enough. You cannot influence your customers using data because they only understand business intelligence, effectively communicated in comprehensible form. Leaders must know where their business is coming from and where it is going; what is occurring with the business, and why; and what all these performance data mean to the group, hospital customers, referring physicians, payors, and patients. More important, what does all this mean prospectively? What will a certain potential piece of new business mean to staffing, profitability, and infrastructure asset allocations? To what degree will the new business affect the strategic imperatives of the group and its operational goals and objectives? What will the implications be for current customers and desired customers? What does all this mean to practice positioning for an evolving health-care delivery system? The answers can be derived only from business intelligence. Leaders must also be able to create business intelligence and use it for internal operational and clinical continuous improvement, as well as to promote competitive differentiators to their customers and to demonstrate value consistently. Then, and only then, will they transform themselves from a perceived commodity to a value-added component of the health-care delivery system, however it unfolds—and it is unfolding, on a daily basis. The old assumption that the one with the data wins no longer holds universally true; rather, the one with the business intelligence available to demonstrate value absolutely will win. The move from data to information to business intelligence—upon which great decisions can be made and with which great accomplishments can be demonstrated—is a critical one that must be made now. Julie Ritzer Ross is editor of RadAnalytics.com.