HFMA VIEWS

Dan DeLay
Senior Vice President, VHA, Inc.

When I tell people at cocktail parties, "I’m into analytics," they frequently either ask me if I know Tom Cruise, can help them with their taxes, or if I wanted to do something else, but it didn't work out. However, I can now hold my head up high. The Wall Street Journal recently published a review of a book titled, Competing on Analytics (Harvard Business School Press) that shows why analytics is the new science of winning. 

Written by two individuals who are respected in both academia and the consulting world, the book points out that one of the key obstacles to becoming an analytical organization is cost--mainly the cost of hiring people who understand that analytics is not just data.  People who are really knowledgeable about analytics get paid six figures, easy, in most industries. Now you know why I'm not a practicing lawyer anymore. To become an analytics-driven organization means having access to complete and accurate data, as well as having people on staff who can analyze this data and understand what it means in your existing environment, the ability to interpret where trends are taking you, and the ability to guide senior management to make decisions based on that data, rather than gut feelings, past performance, or fuzzy strategic visions.

This sounds awfully cold to people in health care, but it's actually the best way to make sure that health care organizations aren't forced into making decisions that are really cold, such as eliminating services because the hospital has run out of money due to poor planning.

I believe several billion dollars are wasted each year in our nation's hospitals because managers don't have access to information to help them make smarter decisions. That's easy to understand, since the amount of data being produced internally and externally is growing at a faster rate than the organization's ability to process and consume it. Therefore, hospital executives must look only at the data that is critical to support the organization from day to day, with no visibility into data that can signal trouble down the road. To get there, health care leaders must begin to hire CIOs, CFOs and materials managers who understand analytics and who can help their organizations develop analytics as a competency. That's part of the challenge....there aren't a lot of people working in analytics in health care. People with this skill set make a lot more money in other industries -- more than hospitals want to pay. First, we have to set up a way to train health care workers in analytics, rather than tacking this responsibility onto the job responsibilities of buyers and materials managers. Next, I think hospitals will have to bite the bullet and look at the value that seasoned analytics people bring to their organizations and pay them what they are worth.

However, analytics as a discipline can't be owned or siloed into any one area. Health care organizations must develop the processes to disseminate analytical data so it can be used, really used, by everyone. This doesn't mean simply circulating another management dashboard report. Those reports frequently don't contain actionable information.

No industry needs analytics quite as much as health care, yet it continues to bury its head in the sand and ignore the opportunity that analytics presents. Until the industry takes a good look around and recognizes the value of analytics, things are destined to remain the same.