Value-Based ‘New Normal’ With Financial Analytics In Healthcare
Value-Based ‘New Normal’ With Financial Analytics In Healthcare
Traditionally, US Healthcare system relied on Fee for Service (FFS) care and patient volumes to keep up the financials intact. With Covid-19 pandemic, elective surgeries were interrupted, chronic disease treatments were postponed, and hospital visits dropped by more than 70%. Burdened by the influx of Covid-19 cases and excessive staffing requirements, Healthcare system got crushed financially too. The system also began to show the flaws of chunky FFS model and more power to the Value-based care.
Value-based care provides incentives for quality and FFS for quantity. Medicaid and ACA also have been pushing for Value-based care from quite some time. Quality of care is not just about the required treatment. It is about patient experience, lifestyle management, post-treatment experience, preventive care, and population health management. Data analytics and predictive modeling turns out to be a competitive differentiator for Value-based care.
Cost management, claims management, and revenue cycle management become important in the post-pandemic ‘New Normal’ era to help organizations rebuild their fiscal health. Hence, financial analytics can only ease the transition to Value-based care and to enhance the fiscal health of the system.
Catalysts For Financial Analytics Adoption
Market adoption — As per the latest MarketWatch report, Healthcare Financial analytics market is expected to grow at a CAGR of 24.5% during 2018–23. Factors such as growing federal pressures to curb costs, preference for telemedicine, Electronic Health Records adoption, initiatives focused on quality of care and personalized medicine / treatment plans, are expected to drive growth.
Analytical tools are under-utilized — As per research from Black Book Market research in 2020, 93% of C-suite executives believe that data analytics are “crucial” to future healthcare demands / operations. At the same time, 84% of them labeled the usage of advanced analytics at their organization “negligible”.
Most often analytics were used to justify past decisions and not for strategic planning. There is a shift to identify key recommendations for growth with the new changes through the pandemic.
Lots of data with only a few right answers — There is huge pile of data, but most of it goes unused. Nearly 70% of all payer data and 90% of all data is not used. It is collected and stored — but never organized, interpreted, or operationalized.
A few Use cases
1. A closer look at margins and costs by service line, procedure, treatment plan and per patient
It is always an overall view of the costs and margins and they were not looked at each granular detail. The pandemic has shown the importance of effective utilization of healthcare resources while also managing costs. A patient-to-patient comparison, procedural comparison can give insights about similar cases in future and strategies to optimize costs. A particular set-up may not be profitable in all the service lines and procedures.
