Part of benchmarking's future: A move to decision support software

Provides wide range of information for strategic planning

What information do you need to compare product lines and evaluate cost savings? Analyze market share and develop networks and affiliation? Negotiate managed care contracts? Examine new program potential?

Crystal balls aren't an option. But the answers to those complex questions may be found in decision support software that gives health care professionals the ability to project the future through computer modeling. By combining the usual external comparative or benchmark data with internal payroll, costs, outcomes, and billing data and adding a modeling and reporting component, even those outside the management information systems department can have quick access to answers.

The result is a powerful tool that can be used not only by clinicians to benchmark clinical practices but by other managers and administrators to make strategic decisions on such things as mergers, new product lines, profitability, and evaluating physician groups. That's why decision support software is fast becoming a necessary component of the benchmarking tool kit.

While there are dozens of such decision-making tools available, for purposes of this story, Healthcare Benchmarks looked at those of Health Share Technology Inc. in Acton, MA. Using one or both of its applications are about 25 leading hospital networks, managed care organiza tions, and national consulting firms including Coopers & Lybrand, Oxford Health Plans, and North Shore University Hospital and Massachusetts General Hospital in Boston.

Such software products vary in the number and types of bells and whistles each includes, and Healthshare's package would be considered a high-end product with lots of versatility (see sample list of vendors, p. 43). Offered in two components, HealthShare One provides compar ative hospital information on cost, charges, case mix, length of stay, payer mix, and market share for any specified group of inpatients and hospitals, all adjusted for severity of illness. HealthShare Two uses the payers' or providers' internal data and offers detailed comparative information on in-depth physician profiling, cost analyses, contract modeling, and outpatient resource evaluation. Both applications use data from a variety of public and private sources, and they feature a pro prietary reporting tool that allows the user to generate a quick analysis in plain English and color graphics. The cost depends on the size of the organization but runs about $30,000 to $40,000 per year.

Reports from the field

HB talked to three users to find out how and why their organizations were using this decision support technology. Karen Bird, vice president of managed care and clinical operations at Faulkner Hospital in Boston, uses HealthShare One in these three ways:

1. To develop clinical pathways. Bird uses the point-and-click software to create a comparative report for the length of stay and cost of a particular diagnosis related group. "We use the data to get physicians involved, and then they're more willing to design a plan for more efficient care," she says. The severity-adjusted data help her get past the standard argument of "But my patients are sicker, older . . . ."

"I used to wonder, 'How many times do I have to hear this?' but the new system gets us over that hurdle. Without it, we'd be stuck there," she says.

2. In strategic planning. "We use the system to find out where our patients are coming from and where they are going if they aren't coming to us. It helps us figure out what to do in terms of a strategic alliance," Bird says.

The reporting capabilities also help the hospital to target growth better in a particular service line or physician specialty.

3. To determine pricing in managed care contracts. "When I negotiate a contract, I need to know whether we will make or lose money. So I have to be able to compare our operations to others to know if I'm in the ballpark," she says.

When NorthEast Imaging in Natick, MA, was looking for a decision support tool specific to radiology, there wasn't one available. So HealthShare Technology and NorthEast Imaging developed one based on the company's original products.

"I haven't seen anything else like it," says Susan Babin, president of NorthEast, which manages imaging services for managed care organizations, physician hospital organizations, and physicians groups. "We needed a system that would analyze utilization, costs, and practice patterns as well as one that would transform rows and columns of data into information we could act upon."

What Babin also values is that the system not only supports detailed evaluations that identify problems with over- and underutilization, it allows NorthEast Imaging to take analysis one step further: recommendation of specific actions to solve utilization problems.

Take the issue of overutilization of chest X-rays, the most common radiology procedure performed. When a summary report identifies high utilization of chest X-rays, NorthEast Imaging's staff perform a "drill down analysis" to hone in on the appropriateness of the ordering patterns.

They run a report of diagnoses and find three for which chest X-rays are being ordered even though there is no indication to do so: screening exam, hypertension, and hypercholesteremia. After running another report to see which physicians are ordering the procedure, NorthEast Imaging sends information explaining the appropriate use of chest films for these diagnoses.

In addition, meetings are held with physicians to review the data analysis. How do they accept it? "Because of the specificity of the data, the discussions with the physicians are much more constructive because they are not arguing over how the numbers were generated but looking at how the care is provided," Babin says. "It is no longer an issue of `My patients are sicker.' With this system, it's now an argument about the physician vs. the bean counter."

Nevertheless, bean counters would be pleased to learn the chest film initiative can save a potential $158,000 based on a 300,000-member population. "There are additional savings from reduction in work-ups of false positives," she says. "Those patients donhave to go through the anxiety of a false positive, and more than 4,000 patients were spared the radiation exposure."

Technology points to savings

Bean counters would be even more pleased to learn of a million dollar savings predicted after Lahey Hitchcock Clinic in Burlington, MA, started using the decision support software. "We wanted to find out our inpatient costs as compared to Boston teaching hospitals," explains George Westcott, director of the office of planning. "We found out they were low, but we had a major initiative to lower them even further."

The physicians, he says, used the system's reports to "motivate themselves to work to reduce costs." One cardiac surgeon "became so interested in the data that he began to examine the variability of coronary bypass surgery," Westcott says. The suggested drop in supply and anesthesia costs may save his facility a million dollars per year, he adds.

Westcott cautions that for all the data's soundness and simplicity of reporting, while the system identifies the problems, people fix them. "It's a good bird dog in that it points the way, but it won't fetch for you," he says. "You have to do that for yourself."