How Hospital Financial Transparency Drives Operational and Bottom Line Improvements

A common pressure facing hospitals today is how to maintain positive operating margins, leaving room to fund new patient services. This is an industry-wide challenge. A 2014 Moody’s survey of 448 U.S. hospitals, for example, found that the average median operating margin fell to 2.2 percent while expenses increased at an annual rate of 4.6 percent.¹What can hospitals do to counter this squeeze on profitability, especially in an era of steadily declining reimbursement?

由于增加收入的能力有限，强调降低成本是一个更有效的策略——前提是医院不牺牲护理质量。为此，每个部门的运营领导必须执行预算，并严格监督他们最大的成本驱动因素:劳动力和供应。

为了对员工生产力、物资利用率和其他直接影响医院底线的领域做出更明智的决定，这些领导者需要快速获取财务和运营数据的混合数据。然而，传统上，这些数据类型位于不同的系统中。此外，部门业务的“结帐”是一项每月进行一次的任务，因此提供一个月的数据。这使得部门经理面临着识别和解决预算绩效差异的挑战，并及时有效地向高级领导解释这些差异。

Texas Children’s Hospital is taking a more holistic approach to performance improvement using integrated operational and financial data, accessed from a single analytics solution. In the process, Texas Children’s has freed millions that can be used to provide additional services.

CHALLENGE: INTENSIVE MANUAL EFFORT REAPS ONLY MURKY INSIGHT

Like many healthcare providers, Texas Children’s was facing expenses much higher than original budget targets. When a $50 million shortfall in profitability was forecasted, Texas Children’s decided to close the gap, and identified upwards of $60 million in performance improvement opportunities. Accordingly, Texas Children’s launched a sweeping improvement initiative called “Delivering on the Vision.” There are a number of components to the strategy, including one that is the central focus of this success story: implementing greater accountability among leaders, providers, and frontline managers for their clinical and operating performance.

由于这种问责制不可能在没有更大的潜在成本节约机会可见性的情况下实现，这些关键的专业人员需要关于多个成本中心和子单元的集成和及时的数据。然而，在当时，德州儿童基金的财务分布在大约1000个成本中心，每个中心都有自己的财务报表电子表格。创建整个医院的财务报表，甚至按部门或子部门，需要如此多的时间，以至于每个月才发生一次。某些有用的信息视图(如个别经理/管理员、物理位置、业务单位或地区)过于繁琐，根本无法定期生成。与此同时，分析由多个成本中心组成的领域，比如急症护理或新生儿中心，需要将几十个独立的电子表格链接起来并加在一起。Despite such exacting procedures, operational and financial leaders were still constrained in their ability to perform high level, roll-up analysis or drill down into important details that would explain variances.

Data lags affect decision making

Because books were closed once a month, leaders had to rely on month-old data, plus the additional week it took to compile reports. This essentially made it impossible to clearly identify and understand variances in performance to budget in a timely way and to quickly make the right corrections. In one example, Texas Children’s knew that 77 percent of its patient care units weren’t flexing staff efficiently to census. But the hospital could not determine why without laboriously tracking down journal entry and accounts payable details from separate systems and cost centers.

对于会计团队来说，结帐和生成报告是一项耗时的工作，包括为每个1,000个成本中心创建大量的数据表，并与其他数据系统的所有者进行大量的协调。每个月，三个人花一整天的时间全神贯注地为各个运营部门创建财务报表，然后再花一天的时间创建高管级别的报告。即便如此，负责多个部门的成本中心经理每月仍需花费两周时间来学习并解释差异。通常情况下，当他们无法给出实现这一目标所需的细节时——例如，理解为什么供应支出会上升——他们需要联系会计部门，而会计部门通常需要一到两周的时间才能给出答案。

THE SOLUTION FOR IMPROVED HOSPITAL PROFIT MARGINS: DATA-DRIVEN FINANCIAL TRANSPARENCY

In order to realize bottom line improvements, Texas Children’s leveraged its existing Late-Binding™ Enterprise Data Warehouse (EDW) platform from Health Catalyst. Data from sources like the EHR, financial systems and operational systems were integrated into the data warehouse to create an enterprise-wide, integrated single source of truth that could help hospital and department leaders track financial and operational performance, and most importantly, accurately inform their decisions.

The financial and operational data enabling these new capabilities is now accessible through a single application, General Ledger Explorer, also offered by Health Catalyst. As the application runs on the EDW, data stays refreshed in near real-time, helping users conduct reliable and timely trend and performance variance analysis. With the tedious task of consulting multiple systems and departments now gone, problematic issues are identified and addressed much sooner.

An accurate view into variances

该应用程序具有标准的月度财务报表和可操作的可视化报告，如实际与预算(图1)。现在，确定哪些领域产生了预算差异，直到预算项目，是一个简单的问题，登录到应用程序，直接访问详细的APGL(应付账款生成分类账)操作信息。一个“信号灯”功能可以让用户快速查看支出是否超出、符合或低于预算，有利方差用蓝色表示，负方差用红色表示。现在，领导和运营经理可以很容易地确定关注的领域，并很容易地深入到数据中，以确定差异的原因。

Put plainly, this feature goes a long way in increasing accountability. Performance-driven managers obviously don’t want to be known for their “red lights,” although “blue lights” can also indicate trouble—such as a budget that exceeded needs or dollars not spent that should have been. The beauty is that users can now discover the true reason for variances from the same application that identifies them. Information is readily available to leadership and decision makers at either a summary or granular level, a significant improvement from the previous environment.

New comparative analysis and forecasting capabilities

With the analytics application, operating performance can be trended over time for each hierarchy, making it easy to spot trends and determine if performance is meeting expectations. Seasonal variation compared to years past, and how operations are altered during those time periods, can also be viewed. This improves the ability to create more accurate budget forecasts.

Operational data related to Texas Children’s largest expense item—salary and benefits—is directly integrated into the application with its own staffing level analysis tab for rapid and easy analysis (Figure 2). This view of data allows operational leaders to manage labor more effectively. Once the user identifies a variance in the staffing line item on the Statement of Operations (Figure 1), they are able to use the staffing level analysis tab to drill into budgeted versus actual FTEs and understand the reason behind the variance (e.g., the patient volume may be higher than expected, resulting in greater staffing needs).

RESULTS: DELIVERING ON THE VISION

Texas Children’s has greatly surpassed original targets in improvement performance opportunities. By equipping leaders with ready access to integrated, near real-time financial and operational information, the hospital has improved quality, increased system wide efficiency and eliminated workflow waste—all while lowering costs. To date, “Delivering on the Vision” has realized $74 million in performance improvements, with new financial and operating analytics driving a significant portion of this number. An estimated $12 million of these savings have been attributed to improved labor performance.

提高金融透明度。“数据不会说谎”——这意味着所有的业务领导，现在配备了良好的信息，可以更好地了解他们的表现，并承担更大的责任来实现他们的目标。有了这种更快地做出运营决策的能力，以及财务和部门领导之间的深思熟虑的讨论，其他方面的改进也随之而来。领导者现在可以快速理解和解决差异，更一致地管理预算，所有这些都对底线产生积极影响。业务领导现在也被要求遵守他们能够理解和有效使用的一致标准。

提高了劳动生产率。General Ledger Explorer offers a clear window into budget availability for staffing, which in turn has helped departments make more efficient use of staff hours while optimizing patient care. In a clear demonstration of this new improvement, salary and benefit expense growth has been kept below net patient service revenue growth, a strong indicator of efficient staffing.

Increased accuracy in monthly financial statements.错误现在可以在财务报表周期的初步阶段被识别和纠正。由于错误和更正发生在同一个月，这是会计中一个重要的最佳实践，每个月的财务报告更准确，减少了在接下来的几个月进行修正的需要。

Significant time savings have been realized by the accounting team and cost center managers.以前每个月需要花费2到3天的时间来根据陈旧的数据生成报告，现在已经不再需要从1000个成本中心电子表格中收集和合并财务数据。现在，拥有多个部门的成本管理人员可以快速汇总成本中心各自的预算图片，而以前这需要花费两周的时间，并依赖会计部门来获得答案。

Time is now spent on understanding all or nearly all variances instead of only having time to focus on the major ones.This ability is important, as seemingly minor variances can add up to big challenges down the road. With a new insight into what’s driving all variances, managers can quickly determine the cause of each one. In just one example, Texas Children’s discovered favorable variances in radiology were due to problems with getting orders pushed through the supply chain group—a situation the hospital swiftly corrected.

有了这么多新的效率，成本管理人员也有更多的空闲时间来进行额外的战略分析，例如增加服务以有利于病人护理是否可以纳入预算。

“我们的领导层依赖的数据延迟了一个月，很难指望他们把预算管理得接近目标。现在，当问题出现时，领导层可以实时做出可执行的决策来解决问题。”

–Jennifer Wilson,Assistant Controller

WHAT’S NEXT

不用说，德州儿童基金会计划继续使用稳健的分析技术。用户反馈正在推动当前进一步增强总账浏览器应用程序功能的努力，包括额外的摘要视图和财务比率数据。德州儿童还计划在不久的将来部署收入周期浏览器应用程序，在一个单一和灵活的应用程序中为所有收入周期指标实现近实时的收入周期管理。这将有助于更早地发现和解决阻止索赔得到支付的问题。

在这里，德州儿童基金会将再次拥有快速识别趋势和差异的根本原因的新能力——在这种情况下，在拒绝管理、应收账款、费用和现金趋势、冲销、毛利率和净利率方面——以避免收入损失和收入周期团队通常需要的大量返工。再加上德州儿童医院新发现的识别预算绩效差异和满足预算目标的能力，医院的利润率将得以维持。

REFERENCES

1. 2014, April 25. Moody’s: Not-for-profit hospital margins fall to 2.2%. Advisory Board.

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