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Tuesday April 5, 2022  |  Todd Brown, Director of Financial Product Management

Analytics To Drive Hospital Performance Improvement

For the past few years, revenue margins in hospitals have been on a steady decline, to the point that in 2020 the median operating margin was 2.7% (includes CARES Act funding). Considering this trend, the importance of hospital performance monitoring, maintenance, and improvement cannot be overstated.   

Rural, community, and critical access facilities have been especially hard-hit. Their operating budgets are typically too small for cost-cutting measures, and revenues are not as high as their larger counterparts. For these same reasons, expensive performance monitoring toolsets are often viewed as a luxury instead of a necessity, yet they are critically important. With margins so low, finding a reliable analytics solution that doesn’t break the budget can be the difference between being in the black or the red.   

Initial Area of Focus 

The hospital has so many departments that determining a starting point might seem daunting. Should you start with materials management or the cath lab? Surgical services or the emergency department? If you suspect a problem in a particular area, it would be advantageous to try and verify those suspicions.  

However, independent of identifying problem areas, beginning with an analysis of the bread-and-butter revenue cycle stages should immediately reveal problems or successes. Tracking basic metrics like discharge-not-final-billed encounters, denial rate, and AR aging should be quite revealing. Everyone wants to get paid quickly and as completely as possible. 

Subsequent areas of focus should include those departments generating revenue and those most impacted by throughput and capacity issues (e.g., surgical services, emergency, cath lab).   

Established Standards 

What are the essential characteristics of an analytics or performance reporting solution?  

Anytime performance is examined, it is important to use established standards as often as possible to avoid any questions on calculations. It’s also vital to have the ability to drill down from high-level metrics to the encounters driving the metric—to have actionable data. And while standards are essential, it’s equally crucial for hospitals to have a tool that can adapt to their workflows and deviations.   

Baselines and Benchmarking 

How do we gauge performance improvement?  

Establishing baseline metrics at the beginning of any evaluation period allows the hospital to monitor improvement. It’s also important to be aware of established industry targets for specific metrics.  

Some solutions may offer facility-to-facility comparisons for hospital groups. This capability allows information sharing related to success stories and lessons learned. The ability to compare metrics to similar facilities (outside your corporate group) may also be available (blinded, of course).   

Availability and Usability 

Users need ready access to metrics. An application that supports a mobile UX is much more likely to be frequented. This platform would dictate a cloud and browser-based solution that allows users to access metrics when and where they choose.  

Once the user has access to the metrics, building their reliance on them is as important as making the data available. The user interface terms “easy to use” and “easy to learn” are not the same experience. Many robust applications with intricate user experiences might appear easy to master after extended training periods and multiple usage cycles. However, community hospitals cannot afford to have users dedicate hours away from their primary job to learn how to use an analytics solution.  

User adoption is also important. Convincing stakeholders immediately that they are seeing readily accessible information that is also easily digested is critical. If users cannot quickly grasp the information and know it is correct, you risk losing them.  

According to one recent survey, 88% of online users say they would not return to a website after having a bad user experience. That is a staggering statistic and underscores the importance of readily available data, data integrity, and the user experience. 

To learn more about how MEDHOST can help you with monitoring and improving your performance via metrics and analytics, please reach out to us at or call 1.800.383.6278 

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