Tech Will Rescue Failing Healthcare Businesses
Many innovations that abound in health technology today seem to centre around EHR’s, and the clinical experience. The focus on these areas are all great and needs to continue. This, however, seems to have resulted in the neglect of an important area in healthcare. The business of health.
As much as healthcare is about caring for people. It is also a business. The majority of health provision in Nigeria is private (~60% by many accounts). Even public facilities collect fees from patients for services. This suggests a need for these facilities and their leaders to be financially aware. Unfortunately in the vast majority of instances they are not. The result is bad business and inefficient healthcare delivery.
Ask many medical directors the following questions and you will likely be met with a blank stare.
- What did your EBIDTA look like last year? What rate is it growing at?
- What are your margins like? What DRG or capitation account contributes most to your margins?
- What is your largest income earner and cost?
The answers to these should be at the finger tip of every medical director. It unfortunately often isn’t. The reason for this is simple. Many medical directors attain their position due to either one of these:
- Access to capital
- Clinical acumen/ experience or
- Political standing/ connections.
They almost never had to read a balance sheet, do budgets or plan resources. At best they would have worked with an accountant or business manager and overlooked what was going on. This produces a disconnect between the financial and the clinical side. This results in business decisions taken based on whims with no clear financial strategy or planning. Ultimately causing health businesses to fail.
These assertions are of course hard to prove. The fact, however, that there are few large hospitals and only one publicly listed hospital provides a supporting anecdote. An anecdote that’s an indictment of the limited business know-how in the sector. The ugly proceedings of a 2014 court battle involving the sole publicly listed hospital provide even more food for thought.
Into the breach steps healthcare leadership academy with partners, ‘Health Strategy and Delivery Foundation‘, ‘EpiAfric‘, and ‘Private Sector Health Alliance of Nigeria‘. The academy provides a one-year fellowship program to develop the leadership and business management capabilities of healthcare executives. A full scholarship for tuition is provided and 20 CPD points.
The curriculum:
- Introduction to Accounting and Corporate Reporting
- Basic Cost and Management Accounting
- Managing Healthcare Services: Strategy, Operations, Innovation and Change
- Leadership with a Strategic Purpose
- Quality Improvement Approaches for Leadership
Undergoing this and similar programs would make medical directors more business capable. This is where tech can come in. When training like this is given, can be deployed to help retain and extend learning. Tech can also facilitate improved practice management and provide business intelligence regardless of training.
Business intelligence (B.I) refers to collecting business data to find information primarily through asking questions, reporting, and online analytical processes. How would this help? Say You implemented a B.I system. You would be able to find out that malaria, for example, was Your highest margin service. You can then choose to further optimise it and promote it better.
Conversely, say You found out that Hepatitis B management provided the lowest margins. You could consider referring all hep B patients somewhere else or work on a way to become more efficient. A business intelligence solution would enable this analysis happen in a heartbeat.
Health care providers are essentially bad at business. As such, they may not immediately appreciate the benefits over costs of clinical systems like an EHR. What they may more likely respond to first, is a ‘BHR’, a business health record — Simple practice management solutions and business intelligence that can help them manage the business side of health care. These systems would help them more easily translate clinical activities into revenue. This makes an easier argument for the inclusion of tech in their day to day practice. Business systems could ultimately transition to include more clinical tools over time. An easier trajectory as the tech would have already proven itself valuable.
Health tech entrepreneurs will see more short-term success providing solutions that rescue health businesses from financial ruin, rather than push yet another EHR.
Originally published at digitalhealth.com.ng on December 8, 2016.
