Data Analytics Initiatives
This article was written by Lisa Miller.
Data analytics initiatives have the potential to transform healthcare in multiple areas, but the sector has been slow to tap into its potential. Understanding what spend data analytics in healthcare really means can encourage more hospitals to embrace its benefits.
Data analytics in healthcare
In 2017, a study entitled Big Data Management in US Hospitals: Benefits and Barriers, concluded that hospitals could realize a number of benefits when using data analytics. Those benefits included cost savings and business intelligence.
The report also noted:
- The lack of experience in utilizing data and the cost of developing analytics were the two biggest barriers to benefiting from data.
- Hospitals need to invest in skilled staff with experience in data analytics and data integration.
- The adoption, implementation and utilization of big data technology will have a ‘profound positive effect’ on healthcare providers.
Furthermore, a 2019 study notes that only 12% of healthcare organizations effectively use data analytics to manage costs and improve the quality of healthcare.
Below, I’ve summarized just a few points to highlight what spend data analytics can mean to your organization:
It means taking back control of your purchased services spend
Purchased services spend can account for between 40-50% of your hospital’s non-labor costs. Without understanding the line item details of your purchased services spend, it’s impossible to accurately evaluate if your invoices reflect the agreed contract pricing, or if all of the items listed are included within your contract with the vendor.
At VIE Healthcare Consulting, our spend data analysis is vital to help hospitals achieve the massive potential cost savings we are renowned for in this area.
Spend data analytics enables your hospital to identify major cost savings opportunities, including items with incorrect pricing, or those that are on or off contract.
It means your data is available in real-time
Real-time insight helps hospitals rapidly identify invoicing errors. This can help to prevent overspend or inaccurate charges on your invoices without having to later renegotiate with your vendors. Trends must be visible on a monthly basis, rather than your hospital relying on historical data which may be 12 months old in some cases.
Without spend data analytics the management of your hospital’s finances are likely to be based on outdated information and significant cost savings are being missed.
Without spend data analytics, your hospital’s finances are probably being managed on outdated information and significant cost savings are being missed. Click To Tweet
What can be measured can be improved.
It means understanding “small data”
2019 has seen a shift in emphasis away from “big data” towards “small data” as hospitals work to leverage their existing data to drive margin improvement and deliver better patient care. Spend data analytics can help your organization to access that “small data.”
Small data is defined as “data in a volume and format that makes it accessible, informative and actionable. “
It means transforming your supply chain
Supply chain costs are predicted to overtake labor expenses as the #1 cost for hospitals in 2020. Supply chain is a major expense for healthcare organizations, accounting for up to 45% of your hospital’s total costs. Actionable data can help your hospital save money within your supply chain by accounting costs to patient outcomes.
It means an end to data silos
Many hospitals have disparate systems and operate in data silos. This makes it challenging to gather all of the available data into a single source – and an even bigger challenge to make sense of it.
Legacy systems, new technology, reporting requirements, system upgrades, interface problems – all of these issues make it more difficult to employ best practices in data analytics.
At VIE Healthcare, we collect data from those diverse systems, put it together, and derive accurate insights to deliver better cost cutting strategies for hospitals.
The benefits of spend data analytics from VIE Healthcare
Comprehensive spend data analytics is the key to maximizing cost savings for your hospital. Our consultants provide detailed spend mapping for hospitals looking to:
- Classify their spend and identify improvement metrics.
- Develop spend-reduction plans and risk-reducing purchasing policies.
- Review process and GAP analysis.
- Review spending policies and pricing agreements.
- Access spend analysis results online.
We also offer spend management services to enable hospitals to achieve the following:
- Expand sourcing capabilities without adding headcount.
- Ensure all agreements and purchases are researched and evaluated.
- Track and measure supplier price compliance with audits.
- Reduce expenses and run “lean.” Combining lean principles with cutting edge data analytics and on-site observations can also lead to significant process improvements. Read more about the benefits of a lean healthcare strategy.