Data analytics grew way past its original boundaries and it’s getting traction in areas where a few years ago few would have imagined.
The US healthcare system is one of the greatest adopters of analytics solutions. Hospitals strive to improve the quality of their data and are actively trying to find new ways to leverage data for clinical analytics and population health management, according to a new study by Black Book.
According to the study, the new generation CDI (clinical documentation improvement) enhances patient care and reduces financial risk. CDI also enable healthcare managers to rely on actionable, qualitative and accurate data, which can also be leveraged to boost the revenues.
Outsourcing data analysis is becoming exponentially more popular for executives. 93% of hospitals and physician financial executives deem data analytics initiatives exploration critical to face today’s challenges.
“Because of this increased patient engagement, the need for proper clinical documentation improvement driving quality outcome scores has never been more essential,” says Doug Brown, managing partner of Black Book. “At the same time, the shift in care settings challenges financial leaders who are managing a far more complex enigma centered on optimizing the revenue cycle and reimbursements.”
According to Black Book, around 25% of all US hospital outsource some or all coding functions. For the hospitals that are already outsourcing their CDI processes, the results speak for themselves: more than 90% (hospitals with more than 150 beds) realized significant increases is appropriate revenue and proper reimbursement (minimum $2.1 million).
The reasons behind the sudden transition to outsourcing
The sudden increase in CDI programs is due to the ICD-10 transition (International Statistical Classification of Diseases and Related Health Problems) by the World Health Organization, which was implemented last year.
“CDI is a key step in dramatically improving operational efficiency in healthcare organizations,” Brown says. “Failing to address flaws in documentation processes has resulted in higher incidences of errors, financial losses, and diminished patient care, and struggling hospitals will not survive on that old path.”
The new ICD-10 propelled the healthcare industry into the analytics world, CDI rising from a neglected investment to the top budget priority for 2019.
Another interesting finding is that the executives and managers running the hospitals now believe that coding and clinical documentation improvements are paramount.
“CDI solutions are the critical link in ensuring full and timelier reimbursements from insurers and payers, as well as avoiding costly penalties for non-compliance,” Brown says. “This is why hospital chief financial officers have become the greatest advocates for outsourced end-to-end coding.”
The study also shows that 89% of hospital financial officers claim that the biggest motivator for adopting additional CDI situations is to provide improvements in case mix index, resulting in increased revenues and the best possible utilization of high-value specialists.
Even today, after an extensive push towards analytics outsourcing in the past years, only 65% of hospitals over 200 beds surveyed outsource CDI audit, review and programming. Therefore, there is still an amazing opportunity for analytics companies to tackle the healthcare segment. There are massive amounts of data waiting to be processed.
However, we can definitely see a significant hike in interest, if we take into account that the number of hospitals outsourcing CDIs in 2015 was only 24%.
The healthcare analytics market is expected to reach 29.84 billion dollars by 2022, up from 8.92 billion dollars in 2017, at a CAGR of 27.3%. The growth is mainly attributed to increasing government initiatives to increase EHR (electronic health record) adoption, but also to growing pressure to curb healthcare cost and the availability of big data in healthcare, according to the “Healthcare Analytics Market” report.
Another for companies providing healthcare analytics solutions
Another opportunity lies in the replacement market of pre-ICD-10 CDI and coding solutions and services, a sector which is also trending.
35% of the hospitals and physician groups presently outsourcing CDI and coding are contemplating a switch to a second- or third-generation CDI vendor as physician acquisitions and EHR replacement go-lives have threatened the sustainability or effectiveness of their current CDI programming, including both software and service, Black Book reports.
“EHRs are certainly playing a role in the industry-wide movement to increase clinician collaboration and communications,” said Brown. “Half of the acute-care respondents in the 2016 Black Book survey were not confident that their EHRs effectively captured the patient data to meet developing clinical documentation needs for population health and big data initiatives, which has improved to a current confidence level of 70%.”