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Thursday, March 3, 2016
The value of HMO analytics
In our last blog, we discussed how cloud-based healthcare analytics is gaining traction as medical records increasingly migrate to the cloud and managers seek new insights into workflow, waste, and administrative processes. This time, we take a further look at some key analytics that utilization and finance managers in medical clinics and HMOs are leveraging to generate superior reporting and analytical capabilities. Here are 7 ways business intelligence can enable comprehensive analytical clarity to HMOs.
1. What is my membership per member per month (PMPM), versus cost?
This metric is equivalent to income vs. costs in most businesses. It indicates how well you are managing your cost of services and how well you are positioned to sustain or grow. PMPM can be measured against both income and cost.
2. Optimize the overall HMO organization efficiency
HMOs are based on a capitation payment model where a group of physicians are paid a set amount for each enrolled person assigned to them, per period of time, whether or not that person uses medical services. Tracking and constantly measuring their costs and utilization is key to maintaining positive revenue.
3. Identify departments that are over utilized
By applying PMPM to a department or service, HMOs can compare their budgeted PMPM to their actual expenses. This helps them decide if their services are correctly balanced. Services that are not conducive to providing a fast diagnosis may not fit the capitation payment model of HMOs.
4. Analyze usage trends to improve performance
Trend analysis of physician, pharmacy, laboratory, community program, hospitalization, and urgent care data allow HMOs to understand patterns and gain insights which in turn allow them to negotiate better rates or modify those patterns. Trend analysis helps managers to proactively reduce costs and improve their businesses.
5. Monitor network allocation trends to drive customer satisfaction
By analyzing geographic and demographic information, HMOs can provide a higher quality of services in the most cost effective way. Changing patient demographics can affect HMOs’ contract models, and it is important that they stay abreast of these changes with smart analytics.
6. Special program effectiveness
Special programs are key to HMO services. For example, preventative programs can reduce inflated costs down the road. Similarly, education programs can help patients respond to services better. Tracking these programs is key to understanding how they impact the HMO as well as which patients are benefiting the most and which still need to be targeted.
7. Physician, laboratory, pharmacy, radiology high quality of care metrics
Trend analysis can be applied to any department of the HMO. Following best practices that have been developed through careful BI analysis results in better services and increased cost effectiveness. For example, learning that a physician is prescribing all name brand medication vs. generics, realizing that hospital stays are extending beyond protocol, and determining that certain lab tests are not meaningful enough for a correct diagnostic are valuable insights. Monitoring trends help keep organizations knowledgeable as to what works well and what needs to be improved to boost efficiency and eliminate waste.