July 28, 2014
Recently, we’ve made the case that the current focus in health care information technology needs to be value. More specifically, we’re suggesting a focus on serving health care business objectives, optimizing return on IT investment, and remaining in front of key regulatory requirements. We’ve addressed the importance of focusing on IT activities that have measurable business impact, and how these concepts apply to optimizing IT spend.
To achieve a value-driven strategy, there are four areas to consider and questions within those areas that you must ask yourself:
This post explores the area of Portfolio Optimization and addresses how your organization is maximizing the ROI of your IT spending by examining the software products you have implemented and how those products have been deployed.
The starting point in a portfolio optimization (or any optimization) is to establish the metrics and goals that will be used to evaluate ROI. The best place to start is the organizational strategic plan.
It’s important to determine which clinical goals the organization is focused on, such as lower readmission rates or higher performance on core quality measures. Ask yourself, “What broad organizational measures are we focused on?” These could be more community referrals, or better staff satisfaction. Lastly, what financial measures is your organization prioritizing? Examples are reduction in days in AR and visits discharged not final billed (DNFB), improvements in clean claim and denial rates, or increased charge capture.
Once these goals are understood, you can begin to ask the three core questions of a portfolio optimization:
The question of what software does the organization have is not intended as just an inventory of products (although you certainly should have that). This is an assessment of capabilities. A careful review of capabilities may show, for example, that an insurance verification tool that is deployed throughout the hospital has not been deployed into physician practices, leaving a gap in that capability.
Similarly, it’s not uncommon, particularly with the high volume of acquisitions occurring, for hospitals to have two products that perform the same function, e.g. physician offices and hospitals using two (or more) different billing platforms. Consolidating to one platform would allow the organization to achieve higher volume discounts, lower maintenance costs, achieve better integration, and gain expanded functionality.
When comparing software capabilities against your business goals, you might find holes, where there isn’t a software product (or project effort) that addresses an important goal.
One example I observed recently is a hospital with a stated goal of improving physician engagement and referrals, but the leadership has consistently resisted the idea of implementing a clinical portal to allow physicians access to patient test results remotely.
Another recent visit took me to a facility with a goal of improving patient safety. However, the clinical leadership repeatedly resisted an IT project to create clinical decision support capability in the EMR and its associated CPOE modules.
In another case, Phoenix worked with a hospital where the stated goal for the IT department was to reduce operating costs and improve integration between clinical and financial systems. Unfortunately, the hospital was proceeding with a revenue cycle project that would have directly opposed both goals.
It’s imperative that you assess your organization’s goals and ensure that you have the systems and products in place to support them.
As a final question to measure (and ultimately improve) the value derived from IT spending, it is critical to look at the practical deployment of the software identified. There are many ways that implementation (systems or policies and procedures) can impact value delivered. Here are three of the most important:
Equally important when assessing utilization is to include the operational side of the process. The most capable IT tool in the world is of little value if end-users don’t know how to use it, or if their policies and practices are not aligned with the platform. This portion of the analysis requires personnel that are well-versed in the IT systems, end-user operations, and the best practices that support those activities.
Portfolio optimization is not just an academic exercise. Through focused portfolio optimization efforts, your hospital can reap quick and measurable benefits, such as:
We will continue to explore portfolio optimization efforts in future posts, in addition to providing guidance on clinical and revenue cycle systems.
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