Data! Big Data! Bigger Data!
“Big data” and data
analytics are all the rage. Moneyball was
a successful book and movie telling a story about the use of data and
predictive analytics to improve a baseball team.
Providers
create vast oceans of data, much of which escapes analysis in the
crush of daily operations and the horrors of the revenue cycle. In
the past the system could be navigated with reasonable effort and
physician compensation was generous enough, so analytics was not
necessary to success.
We are
in a new era, where bundling and reference pricing and ACOs will
change the nature of health care operations.
Some
good news – most of your work does not require massive data sets or
highly sophisticated computer models – most of your work requires
reasonable amounts of data and a well designed spreadsheet model.
Predictive
analytics is a data rich version of a classic question - “what if.”
Sensitivity
analysis is analytics focused on the change of a single variable.
Scenario analysis is a change involving multiple variables. Assuming
the group has a sophisticated budgeting process built on a
spreadsheet platform, those same spreadsheet model can be altered for
focused predictive predictive work.
Don't
have a sophisticated budgeting process? Time is a wasting.
One
field of accounting knowledge is critical, the ability to separate
variable, fixed and mixed costs. This is critical to building proper
incremental assumptions in your models. A 20% change increase in
procedures does not create a 20% increase in all costs, and knowing
what does change is critical.
Executives
and administrators have plenty of work to do, the work load is going
to get heavier, and more sophisticated analysis and planning will be
required. Adding predictive capabilities provides important tools to
improve feedback and to improve decision making.
