Information management

key to cutting health costs

By CATHERINE ROBERTS

In the next decade, those businesses that learn how to effectively manage information?instead of just using it?will be the ones that succeed, says a nationally known expert.

And those words mean more to the health care industry than most others. With Medicare and Medicaid cuts hitting providers' pocketbooks, and companies putting more pressure on insurers to keep premiums low, both insurers and hospitals are scrambling to cut costs without sacrificing quality.

Organizations can shave millions of dollars off their administrative costs if only they would better measure the integrity of their data and organize that data with an eye toward the entire organization, says Larry English, a Tennessee consultant and author of "Improving Data Warehouse and Business Information Quality."

English was in town this spring to help Preferred Care improve its data collection and management. He says he is one of three experts who study the effective management of information, which involves organizing data horizontally across a business instead of in self-contained units.

For example, English says, one of his insurer clients started using claims data to analyze how it could help members improve their health, and thus reduce claims. Officials could not understand an anomaly in the data: There was a very high incident rate of broken legs?80 percent of the claims on some days.

The claims department had programmed its computer to default to a broken leg diagnosis for many different conditions with the same reimbursement on busy days because it speeded up the process.

However, it did not save money or time in the long run because the insurer had to go back to individual histories and find out what the real diagnosis was, English says.

If the insurer had been thinking horizontally instead of vertically, it would have had a standardized set of data that each department would capture when talking to members.

The accuracy of data is probably more important for health care than any other industry, English says, because lives can be at stake.

Preferred Care chief financial officer Thomas Combs agrees data quality is of the utmost importance.

"We are nothing if we have bad data," he says.

Now that the insurer is sharing risk with providers, it must supply accurate information in a timely fashion to help reduce costs, he says.

Hospital systems are trying to do the same type of data collection to make it easier for patients moving from unit to unit. For example, if a patient moves from the hospital to a rehabilitative unit, a doctor or nurse still might ask medical questions, but he or she would have a log of all the patient's test results from the hospital, says Kenneth Naples, ViaHealth senior vice president and president of the system's Continuing Care Network Inc.

Extreme examples of mismanaged information can be fatal for patients, English says. However, smaller mistakes?if a medication is typed in wrong or a date is wrong?can defeat efforts for a universal patient record within a system or community, he says.

One insurance client of English's had 43 separate databases. That meant information on someone covered by the insurer was entered again every time that person bought another product.

The idea of horizontal information management sounds so simple, but in reality, it is hard to put in place, he says. The biggest obstacle is that it is an intangible good and not easily quantifiable in terms of dollars and cents.

Poor information management does add up, though. Some 15 percent to 25 percent of operating costs are because of "scrap or rework," English says. That scrap or rework is because someone along the way entered, copied or analyzed the data wrong.

So how does an organization do it right?

Information management must be part of every executive's job definition, not just for the chief information officer and information technology professionals, he says. It also needs to be worked into job evaluations.

Also, a company must come up with common terms and definitions for everything from names of reports to application forms. Currently, many business units have a different language, and cannot communicate with other units, he says.