“Improved
Value Analysis Performance Only Happens When Data Is Better Managed,
Understood, Data Mined And Analyzed For Actionable Results.”
Most healthcare organizations
have now purchased a new generation of Materials Management Information
Systems (MMIS) or will do so within the next three to five years, but
does this mean that these organizations are now making smarter business
decisions based on better business intelligence? The overwhelming
conclusion to this question based on our extensive research is NO!
Business intelligence or the
search for hidden patterns, trends and vital information about your
customers’ purchases, inventory practices and logistics is the missing
link in value analysis performance today. Business intelligence
involves digging and drilling down into data warehouses and then data
mining to understand what our customers are purchasing, how they are
purchasing and what they are doing with these purchases once they have
received them. This search to find, verify and identify patterns in
your data, then formulate action plans to improve your supply/value
chain performance with the techniques of value analysis is the core
concept behind achieving higher levels of savings and quality
improvements through better data management.
Regrettably, the link between
better managing purchasing and utilization data and achieving higher
savings performance with value analysis is lacking at most hospitals and
systems in the
U.S.
today.
Three Steps To Move You To The Next Level
Of Savings With Your Data
There are three critical steps
that are required to move you to the next level of savings and quality
improvements utilizing your data as business intelligence:
1.
Improve Your Data Quality
Over the last two decades, we have looked at millions of SKUs
(storekeeping units) and hundreds of data files that were generated by
hospitals and systems’ MMIS systems only to find 10% to 15% of these
files to be in a normalized format that is required for data mining.
This fact necessitated my staff to spend thousands of hours organizing,
categorizing, classifying, normalizing, stratifying and cleansing this
data in preparation for data mining over the years.
Based on this experience, the four major reasons we found for a hospital
or a system’s data quality being poor was: (i) weak, forgotten or
limited training on how to use the hospital or system’s MMIS system,
(ii) no standardized protocols established for categorization and
classification of line item data (iii) carelessness in entering data and
(iv) poor discipline in adhering to the protocols that were established
for data management.
2.
Expand Your Data Warehouses
A data warehouse, from a supply/chain management perspective, is a
centralized repository of ALL customer transactions in a format that is
understandable, easily retrievable and in a user friendly environment.
However, this information should be only your starting point in building
your world class data warehouse.
To be truly effective your data warehouse will also need to maintain: (i)
comparative pricing for all of your purchases, (ii) alternate products,
services, and technologies for what you are buying now (iii) utilization
benchmarks on all of your high usage commodities and (iv) global
benchmarks to target departmental savings opportunities that are hidden
from your view.
3.
Conduct Data Mining Exercises
Data mining is the process of finding, verifying and identifying unusual
or hidden purchasing, utilization or behavior patterns in your products,
services or technologies by systematically searching your data warehouse
for answers to the questions that arise from the data you uncover.
The following is an illustration of how data mining works. One of our
350-bed hospital clients uncovered, through a data mining exercise, that
their hospital was consuming $22,000 dollars more point of service
diabetes test strips annually that was recorded being performed at their
hospital. This information has now triggered a value study by the
hospital to determine who, what, when, where and why this is happening.
This unpredictable information would have never been uncovered without
this hospital’s dedication to data mining.
Business intelligence is not
just another “buzz” word that will be forgotten soon, but is both an art
and a science directed at uncovering hidden data that resides in your
data warehouses. Business intelligence if practiced artfully can save
millions of dollars annually for your hospital or system if you utilize
these three critical steps to move you to the next level of savings
performance – beyond price.
by
Robert T. Yokl, President