The Issue

Meetings between hospital finance executives and physicians should be important steps in building collaborative business models around issues, such as supply cost, utilization, productivity, and compensation. But these meetings often result in frustrating debates about numbers and do not produce meaningful discussions about change.

Even when finance executives employ data-driven presentation styles, results are often the same-hospital leadership and physicians differing on an issue. Finance executives can change this unproductive dynamic by presenting more than data and metrics at the meetings. In clearly stating assumptions and rationale behind data and metrics, executives can advance a data-driven approach built on transparency. This transparency helps build trust between finance executives and physicians so they can work together productively to make necessary improvements in healthcare delivery. Understanding the fundamental difference in how physicians and executives make decisions is the key to turning ineffective meetings into rewarding dialogues.


To speak the language of physicians, hospital executives must understand how physicians make decisions and gain trust in the data that inform those decisions. Typically, an executive uses experience-driven decision making supported by data. By contrast, physicians often avoid basing decisions initially on experience or judgment, opting first to view the data in an effort to understand the assumptions and logical reasoning process behind the data. Understanding this approach can help finance executives engage physicians in fruitful conversations about business concepts, such as productivity or compensation.

Finance executives typically employ any number of assumptions in building a presentation. These assumptions might be based on previous experience with similar practices or tables they have seen in the past, but they are likely to prompt a "you don't even know how I practice" response from the physician. Excluding first-year data because the practice was just starting out might be a reasonable assumption based on experience. However, to build trust with physicians, a finance executive should first be transparent about the assumptions being used.

The next step in transparent data-driven discussions is to show the logical reasoning that connects one assumption to the next and leads to the final number. This logical reasoning process, or rationale, should demonstrate that the executive understands how physicians think about their management practices and daily workloads.

The central concept in a data-driven decision approach is that transparency-not data alone-builds trust. When data are used, logical reasoning should also be applied to the numbers to sustain them as a defensible argument to support the business concept being presented. Rather than first arguing the business concept, transparent data are used to set the stage for a collaborative discussion.

Action Steps for Providers

Developing a data-driven decision approach with physicians is not only about which data element or metric to use. Most important, a successful data-driven decision approach should show how those data were developed. To be transparent, an executive should consider the following steps:

  • Show the assumptions behind the data.
  • Explain the rationale or methodology behind the assumptions and be sure there are no flaws in how conclusions are drawn from the data sets.
  • Explain why the metrics used are representative of the physician's practice.
  • Account for all data gaps in metrics or benchmarks, but explain how the data represent the best option for going forward.

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