RESEARCH & RESOURCES

LESSON - Implementing Analytics in Today’s Era of Healthcare Reform

In the U.S., the healthcare provider industry is at a crossroads, faced with the upcoming challenges of responding to newly proposed delivery and payment models under the Patient Protection and Affordable Care Act (PPACA) of 2010 as well as the requirements for meaningful use established by the American Recovery and Reinvestment Act (ARRA) of 2009.

By Judy Hanover, Analyst, IDC Health Insights

The Challenges and Opportunities for Healthcare

In the U.S., the healthcare provider industry is at a crossroads, faced with the upcoming challenges of responding to newly proposed delivery and payment models under the Patient Protection and Affordable Care Act (PPACA) of 2010 as well as the requirements for meaningful use established by the American Recovery and Reinvestment Act (ARRA) of 2009.

Globally, governments and providers are struggling to implement and use electronic health records and health information exchanges. Responding to all these initiatives will require the automation of healthcare processes via the implementation of new applications. To do so effectively and remain competitive, healthcare providers will also need to implement applications to provide timely and accurate performance information from the underlying clinical data. This data will deepen their understanding of the underlying clinical quality, operational, and financial issues surrounding care delivery.

There is a significant opportunity to improve clinical outcomes, patient satisfaction, and business performance across the continuum of care through the effective use of analytics tools and solutions. Building on well-established experience from other industries, analytics promises to improve clinical outcomes, reduce costs, increase operational efficiencies, enable better decision making, and create new opportunities for growth in healthcare.

The Critical Component: Strategic Implementation

The effective implementation of analytics in the healthcare industry is a complex process that goes significantly beyond the acquisition of commercial software solutions. A simple definition for analytics in the healthcare industry is “systems and solutions that improve organizational decision making through regular access to detailed quantitative organizational data.” These decisions can be strategic, tactical, or operational in nature. In order to make use of analytics in decision making at all three levels, organizations need enterprisewide analytics in place that crosses departments; links clinical, operational, and performance data; and provides the insights needed by administrators and governmental and regulatory bodies.

The adoption level of analytics in healthcare is reported by IDC to be 70 percent. However, this figure is misleading. Although many healthcare organizations have isolated instances of analytics in place within their organization, few make use of it at all three levels of decision making, or enterprisewide.

The major benefits of analytics in healthcare can only be achieved through broad organizational assessment, understanding, and acceptance of analytics needs and expectations, along with the associated process changes that analytics can help identify. This will likely require dedicated resources and direct end-user metrics, benefits, and/or incentives. As a potential core strategic tool for organizational growth, analytics offers many things to many people. Achieving success requires a deep understanding of healthcare provider organizations and their analytics requirements, limitations, needs, and expectations.

The drivers for analytics in the healthcare industry have been in place for some time, but recent regulatory requirements have accelerated and increased their urgency. Healthcare industry segments vary in their experience with analytics, and providers are among the last to adopt (the payer segment is the most mature, followed by life sciences). However, this allows providers to garner the “lessons learned” from more mature systems and model analytics from other industries (especially retail, manufacturing, and financial) to measure and optimize patient outcomes, care quality, and organizational efficiency and effectiveness. Effective analytic solutions institutionalize the capture and consolidation of data and subsequently enable analysis and reporting to support management decision making.

This article is an excerpt from a comprehensive study by IDC Health Insights and SAP. Download the full white paper, “Business Analytics and the Path to Better Decisions in Healthcare” (link below) to read more on the lessons learned and where and how to begin a strategic analytics implementation.

This article originally appeared in the issue of .

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