Transparent Operations

All of healthcare is experiencing a revolution driven by an urge to become more transparent. From pricing, to processes, to patient data (to those patients), everyone wants to know the detailed information. This revolution is creating pain, and at the same time opportunity – this is Schumpeter’s gale (also known as “Creative Destruction”). A great theme I am seeing across the country with hospital executives is that they understand the opportunity is much bigger than the pain involved. And, the rewards for the patient and healthcare systems will be great for those who can manage through the pain.

A key area that many executives are focusing on is working with department and clinical leaders to improve value in high acuity areas of the hospital. After all, surgery, both inpatient and outpatient, can account for 70% of a hospital’s revenue and their spend. It is a great area to start. The problem, most hospital’s don’t understand their cost (the denominator in economist Michael Porter’s value equation).

In conversations with several hospital executives and service line leaders, the thinking is aligned – “we must understand our costs, our whole costs.” Hospitals are better defining what it means to know their costs, then running after the data. For example, one executive I talked with stated she and her team only looked at their charges as costs. Once they realized this would lead them down the wrong path, the redefined their cost as the true cost of the entire episode with a patient. This was a revolution for them.

However, once redefined, this hospital executive told me: “Redefining cost was the easy part, actually getting the data to understand the cost was much more difficult than she thought.” As we see in hospitals today, getting basic data, such as on-hand inventory or items used per procedure is at best tedious and takes months to get; at worst, people have to take “SWAG’s”. Can you imagine if a Nordstrom department store didn’t know how many Burberry suits they had on hand, how much each cost them, and how many they sold per month? Could you imagine if they had to take “SWAG’s” at these numbers?

This is a key area Mobile Aspects can step in. Our solutions help processes on the front end; as importantly, they drive high fidelity, detailed, real time data to your teams. With little effort, hospitals can finally see how much they are spending per procedure, if certain procedures are costing more than they used to (we are seeing a trend this is happening) and even which operators have higher costs than others for the same procedure. Great data from accurate documentation leads to optimal decisions and higher profitability.

The great thing is hospitals across the country are having the right conversations. The drive toward transparency causes us all to ask “what value are we delivering to the patient?” It is a hard question to ask; it is a harder question to answer. The journey to get to the answer is really what is important and is moving healthcare in the right direction. Because hospital Boardroom’s across the country are asking this question, I am more excited about the quality of care our hospitals will be able to deliver than ever.