15th April 2020

Using hospital data to ease the financial squeeze

Vinay Chand, Managing Director, Civica Health

This article first appeared in Hospital and Healthcare in April 2020

Hospitals are being squeezed on all sides. Population-related pressures such as increasing chronic disease and an ageing population, government calls to find multimillion-dollar savings and fewer people with private health insurance are all placing extra demand on hospital resources.

Patients are being caught in the middle, too. This trio of trends is contributing to extended public waiting lists, often leaving patients unable to receive care in a timely fashion, with some hospitals cancelling procedures 3–4 months prior because they have run out of budget.

In the last three months of last year, the percentage of Australians with basic hospital cover fell to its lowest level in more than a decade. Now, just 44% of the population still have coverage. Australia’s population is growing by more people annually than ever before, forecast to rise by 40% to reach 36 million by 2040. In particular, the ageing population is also growing faster than ever before and there isn’t enough planning at the state and federal government level to manage the impact.

Amid these developments, the Australian Medical Association has warned that the $130 billion allocated to Australia’s public hospitals has precipitated a funding crisis that puts patients at risk.

Driving efficiencies

NSW Health Minister Brad Hazzard has argued that there is a lot of variability in the efficiency of services offered by hospitals in various parts of the state, leaving room for improvement. Hazzard asked that NSW hospitals “use their budgets as wisely as possible, to achieve the maximum number of services for patients”.

Whether or not you believe that finding efficiencies is the answer to this budget challenge faced by hospitals, new cloud-based technologies can help hospitals do more with less and reduce overspending by providing data-led insights around what is driving costs.

With the help of cloud-based technology, healthcare providers both public and private can analyse costing data for trends and insights that can improve the efficiency with which they deliver their services to patients.

For example, using tools such as CostMaster, users can view the cost of delivery care at patient, consultant and site level, including and comparing cost per test or theatre session. Analysis of datasets across hospitals, wards, consultants or services is providing new visibility on how budgets are used throughout the hospital and where operational efficiencies can be made. Interactive dashboards make it easier to interrogate and visualise data insights and trends.

State and federal governments already require some costing data to be collected for compliance reasons. While most public hospitals are already providing this kind of data cost information to states and federal bodies, there’s a real opportunity to extract more value from it. This includes using the data to help to reduce unnecessary variability across different hospital locations, optimising services delivered to patients and encouraging savings.

Workforce focus

Analytics can also help drive easy wins in the largest line item for most hospitals — workforce costs. Many hospitals focus on ensuring rostering is fulfilled, but smarter technology can ensure that the cost dimension is considered at the same time. With cloud-based modelling software, the most efficient and effective teams can be rostered, allowing for the best care to be provided while optimising costs.

For regulatory reasons, many hospitals are already collecting a lot of data that could support this kind of rigorous financial analytics and improve patient and financial outcomes. At a time when there’s a need to stretch healthcare resources further and better manage costs, there’s a missed opportunity to use cloud-based technology to extract more value from this huge trove of data already being collected.

To get there will require a cultural change at the executive level that filters through the business. As established institutions can often be disinclined to change, it’s important that the leaders of any business talk to employees and clearly define the organisation’s vision around data-driven efficiency so they understand and buy in. Get people on board by ensuring everyone is aware of the program’s positive benefits and celebrate successes when they emerge.

Increasing patient demand, driven in part by an ageing population, has led to rising costs with funding struggling to keep pace. Leaders must take up the charge, supported by technology, to find ways of more efficiently providing quality care to patients. Making better use of existing data is a great place to start.