BENEFITS ANALYSIS FOR HEALTH CARE: PART II
by Sid Adelman
Increase Provider Base:
The organization will be better able to recruit and retain providers by knowing more about:
providers (specialty, boards, credentials),
revenue generated,
referrals,
fees paid to providers
outcomes
By being able to measure results, the organization will be better able to recruit and retain providers.
By being more proactive in research, the organization will be able to improve its reputation and attract and retain more and better providers.
Benefit = Revenue/Provider X Additional Number of Providers
Facilities Utilization:
By knowing more about utilization of facilities (bed occupancy, type of bed, etc.), the organization will be better able to schedule and more fully utilize existing facilities.
Benefit = Additional revenue from greater facilities utilization
Outcomes Analysis:
By knowing more about outcomes, the organization will be better able to:
By running "what if" scenarios, the organization will be able to analyze the effectiveness of various protocols.
Benefit = Revenue/Provider X Additional number of Providers
Benefit = Profit/Hospital Admission X Number of additional hospital referrals
Benefit = Cost savings/episode X Number of episodes
Benefit = Cost savings/readmission X Number of readmissions
Benefit = Revenue/Provider X Additional Number of Providers
Benefit = Average laboratory costs X Number of inappropriate lab orders
Benefit = Medication cost savings X Number of less expensive prescriptions
Analyst and Programmer Productivity:
Analysts today spend between 50% and 90% of their time gathering data; the remaining time is spent actually performing the analysis. With the data warehouse, organizations have found the numbers to be reversed giving the analysts far more time on productive work.
It has been estimated that 50% of requests to IT are for new reports and changes to existing reports. A number of organizations that primarily buy application packages are using the data warehouse to generate needed reports not produced by the application packages.
By giving users the ability to create their own reports, the productivity of both IT and analysts should increase.
By having a data warehouse capability, the production of both internal reports and external reports for government agencies will require less development time.
Benefit = Cost reduction/report X Number of reports/year
Benefit = Reduction of number of hours/report X Fully burdened rate of IT or user analyst hour
Benefit = Improvement in programmer productivity X Number of programmers X Fully burdened rate
Risk:
By providing better information, the organization can be more proactive to identify potential for medical malpractice and to correct problems before they occur. In addition, better information and the more extensive development and use of protocols should result in less exposure to law suits or mandatory arbitration as protocols are accepted and followed.
Benefit(Fewer suits) = Cost of defending the suit X Reduced number of suits
Benefit(Suits successfully defended) = Number of suits X Average judgement
Benefit(Smaller judgement awards) = Reduction in awards X Number of awards
Intangible Benefits:
Not all benefits can be quantified. Even without hard dollar justification, the intangible benefits should be identified whenever possible.
Better decisions, both operational and strategic
Better quality of information, cleaner and better understood data, better reporting procedures
More timely information so that decisions are more timely; reducing reluctance to make decisions
Higher personnel morale as they are more comfortable with their decisions, take greater pride in their work, and feel good because the organization provides good tools and capabilities - workers should do a better job and the retention rate should be higher
Better information about the members should result in being more responsive to the members, providing better service, the right service from the member's perspective and a better community image
By understanding billings for Medicare, Medicaid and insurance companies, the organization will be better able to understand profitability in a variety of categories (home health care, urgent care, hospitals), diseases (diabetes, epilepsy, cardiovascular disease), etc.
By understanding costs for Medicare, Medicaid and insurance company patients, the organization will be better able to understand profitability in a variety of categories, diseases, etc.
By running "what if" scenarios, the organization will be able to analyze various business strategies.
The benefits in this section can be approximated by asking the users what they are willing to pay to:
Another approach is to evaluate the funding of projects. As an example, if users are willing to fund a project that will give them more timely information (and nothing else), the amount of the funding may be considered as the benefit the user places on the improved timeliness.
Post-project review and audit:
It would be unusual if the resulting benefits were as predicted. It's important to review the benefits to determine the accuracy of the predictions. Armed with the results of the review, more accurate predictions can be made in each category and the prediction process can be improved with more accurate benefits projected for future projects. More accurate benefits analysis can aid in prioritizing data warehouse projects.
References
The Foundations of Wisdom: A Study of the Financial Impact of Data
Warehousing, IDC, Toronto, 1996
Jay Marquez, Creating a Business Case in Data Warehouse: Practical Advice
from the Experts, Joyce Bischoff and Ted Alexander, Prentice Hall, 1997.
RUMOR: D.M. Witte and Associates, Charlotte, NC