Without Analytics, Hospitals Risk Becoming the Blockbuster Video of Healthcare

In an era of heavy healthcare consolidation, hospitals and health systems that don’t embrace data and analytics are increasingly in danger of being gobbled up by those that do. Why? Such high-tech tools are necessary to promote value-based care, a movement that experts believe will replace the fee-for-service model, regardless of whether any single healthcare organization is ready.

Mahek Shah, MD, a senior researcher at Harvard Business School, drove home this point today at the Healthcare IT & Analytics Summit in Baltimore, Maryland, arguing that industry leaders must use data and analytics to improve both care and costs. Only when health systems understand their underlying cost structures may they build value-based payment structures, he said.

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“If health systems don’t realize that they need to invest and create solutions related to cost, they won’t be relevant anymore,” Shah said. “If we stick to the status quo, I think hospitals are going to become the Blockbuster of healthcare.”

Blockbuster, of course, is the once-dominant video rental chain that all but disappeared when that industry went digital. Shah said healthcare stakeholders don’t like when he compares hospitals to Blockbuster, but the parallel is clear. Blockbuster lagged in launching a streaming service, and when it eventually did, Shah said, the back-end technology wasn’t there.

Without clean, integrated data, healthcare organizations also lack the back-end technology necessary to scrutinize and adjust their operations. Health systems must be strategic in crafting or borrowing these solutions if they are to take part in the value-centric evolution and avoid Blockbuster’s fate.

But how can healthcare measure value? At its core, value comprises cost and quality of care. The problem facing the United States is that costs are high and quality is low, an argument bolstered when the American healthcare system is compared to those of other nations, said Jason Wood, MBA, MS, chief information officer of The Everett Clinic, which is part of the DaVita Medical Group.

“There’s a lot of pressure in the industry right now because of where we found ourselves and the expenditures in the healthcare system,” he said. “The output we produce are like that of an old pickup truck, but yet we’re paying Tesla prices.”

Data and analytics, however, can change that. But how?

First, health systems must configure their electronic health record (EHR) systems to ensure they correctly capture useful data, Wood said. Then, on the analytics side, organizations must pull in data from other sources to get the complete picture of care and costs.

To accomplish this, it’s critical that healthcare leaders avoid spending money on tech for the sake of tech. Instead, such investments must be “thoughtful,” requiring understanding of how to organize that capital and prepare providers and other staffers for the shift, Shah said. Without the right culture, data and analytics tools might lead to more frustration.

Breaking out of longstanding silos is important. For example, many diseases call for care coordination among several departments, from cardiology to pulmonology and beyond. Healthcare organizations must treat patients across the care continuum, and their data-gathering and analytical tools must support that effort, Shah said.

Beyond staving off an acquisition, the end results of this sort of effort are desirable. A successful effort, for one, can yield predictive tools, enabling providers to understand which patients are at greater risk and launching early interventions. Predictive analytics can save money and improve outcomes. But Shah noted that these insights and technologies must be available at the point of care.

Look no further than Wood’s employer, DaVita, for evidence that value-based payment plans are worth the work. In one region, 60 percent of patients are on a fee-for-service model and 40 percent are on some sort of upfront, risk-based, value-driven payment model, Wood said. But that 40 percent makes up 90 percent of the region’s revenues, he said.

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