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I’m going to go on a rant tonight. I’m not even in a bad mood. Something reminded me of something, and I want to go off of it.
When it comes to the finance side of healthcare, the business of healthcare varies a little bit depending on the size of the organization. If I think broadly of what people think of it like physicians, physician offices, even large provider groups with 15-25 MDs or mid-levels, and things like that, I’m astonished at how they are not typically run using a lot of data.
That doesn’t mean that data doesn’t exist in the business. That doesn’t mean that nobody looks at it. The leaders of the organization, the people making the primary decisions, are not using data as one of their key tools to help them set the direction for the company, make key decisions, and so on.
Benefits of data in decision making
It’s not that nobody is, but I think that we would benefit more from doing that. Indeed, we would make more money. Certainly, suppose we’re thinking about the push and pull between insurance companies and providers. In that case, we might be able to have the weight come down a little bit better on the providers’ side and extract more money out of the insurance companies, which would make all of us happier if we were more adept at using data. It’s so wide-ranging.
It makes me think of Guy Kawasaki. One time, he gave a model for how to value a startup. For those of you who may not know who Guy Kawasaki is, he’s been around the venture capital and startup community for decades. He was there at Apple computer early on. He was, I think, the key person for the Macintosh launch back in 1984. He calls himself an evangelist. He’s been around for decades now, talking about things and investing and so on.
His model for how to value a startup, which is slightly tongue-in-cheek, is to take the number of engineers or software developers you have in the organization and multiply that times a million dollars. Suppose you’ve got five engineers, $5 million. Then, take the number of MBAs you have in the organization and multiply that times $500,000 but subtracted. I’m not trying to hit on MBAs because I’ve got an MBA, and I think there’s value to the MBA. I think he’s got a point, which is not all functions are created equal.
Revenue cycle management in healthcare
If I think of healthcare organizations, mainly when we think of revenue cycle management, which is finance, which is numbers, data, we should be living in that data. Not the simple sort of information in terms of what I call the typical finance but more the ability to go from descriptive to predictive analytics to prescriptive analytics. We’ll do all of that another day in terms of what that is and so on.
We need to have a much more data-centric methodology, data-centric mindset when it comes to healthcare. I’m not commenting on the clinical side. I have very little knowledge of that whatsoever. Indeed, when it comes to healthcare, what I’ve seen over decades now in this business is that we could use more of that.
I think, in smaller organizations, whether it’s a solo provider, whether it’s a 10 or 25 doc group, there’s a lot of challenges in terms of getting access to data. It’s harder for a small organization to be that data-centric. Larger organizations, hospitals, hospital systems, and so on, my experience has been that they have all kinds of other problems. Even if they have many IT systems, they run into a whole slew of other things that make CFOs and other top executives often really discouraged in terms of their ability to lead and manage with data. Even though there are tons of them, they cannot get the answers they want. That’s a consistent theme.
If I were to make a similar analogy to how to value a revenue cycle management department or a revenue cycle management company, I would say, “Take the number of data scientists that you have in the organization and multiply it times a couple million. Take the number of high-level data analysts, Excel guru kind of folks, multiply it times half a million, or something like that. If we’re talking revenue cycle management, take the number of times you’ve had consultants or other “experts” come in and try to tell them what to do based on their experience as opposed to data and subtract a million dollars.”
We need to make decisions based on data, not based on what we’ve done before, what’s worked for somebody else, or all those kinds of things. That doesn’t mean there’s no value to that. That should be an overlay applied to the data based on what is currently happening in the business. We forecast what is happening in the future instead of “We should go revamp the eligibility and intake process because it needs work; we’re having problems.” Anecdotal isn’t an excellent way to run a business.
That’s my rant for tonight. Go off and have fun! Crunch some data. Data’s sexy.