The U.S. healthcare system has many problems, but a lack of data isn’t one of them.
Since the rise of electronic health records (EHRs) more than a decade ago, hospitals and doctors have been inundated with data on patients’ health. Studies show that 96% of hospitals have adopted EHR systems. Yet that digitalization hasn’t yet led to the leaps in efficiency, safety and improved patient care that its advocates hoped it would.
That’s partly because most hospitals and health systems haven’t worked out how to use the data to connect the dots and gain actionable insights into their processes. Critics of the $36 billion government-backed EHR drive say that, among other problems, it has overwhelmed doctors with data entry demands, reducing the time they have to focus on patients. It’s also failed to provide the promised insights that were supposed to reduce costs and improve patient satisfaction.
As new technologies become available to hospitals, clinics and senior care facilities, it’s important to not repeat the mistakes of EHR. It’s not enough to merely have the data; it’s what you do with it that makes a real impact on efficiency and patient outcomes.
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This brings us to a slightly more recent, though by no means new, promising technology reminiscent of EHRs: Real-Time Location Systems (RTLSs). Using tracking devices embedded on equipment or worn by people, RTLS is already helping to boost productivity and efficiency in sectors ranging from retail to supply-chain management and postal services. Used the right way, it has similar potential in healthcare.
The RTLS market in healthcare was estimated at $976 million in 2017 and is forecast to rise to $2.5 billion by 2023. These systems can reduce costs associated with the loss of equipment and give doctors and administrators valuable insights that could lower patient wait times, allow for more efficient use of staff resources and, even better, control over the spread of infections. That’s the potential, at least.
The system, combined with an added layer of analytics, can, as in just one example, allow an institution to visualize staff members’ value-added time (time with patients, for example) versus non-value added activities (searching for files and equipment, etc.). By monitoring these movements, RTLS can yield valuable insights into where daily processes can be streamlined and improved.
One orthopedic clinic I know that recently adopted RTLS was able to reduce its headcount of surgeons by two (around 15%) with no impact on patient satisfaction thanks to the resulting improvements in processes. That’s a very significant savings given that the cost of employing a surgeon can run to $1 million per year.
Yet, like with EHRs, most providers haven’t taken full advantage of RTLS, exacerbating the gap between what it promises to do and what it actually ends up doing.
For instance, when they have adopted RTLS, most healthcare facilities have limited it to tracking equipment like beds, blood pumps and wheelchairs in an effort to keep a better eye on durable goods. That’s relatively easy to do.
The bigger savings come from making staff more productive, which requires something beyond a mere plug-and-play attitude with a new piece of tech. At another facility, a senior care home, the owner was surprised to learn from a newly implemented RTLS that staff was only spending about 25% of their time with patients, which, in theory, is when they are adding the most value.
RTLS is just one example of a promising new technology that can gather valuable data. There are a plethora of software solutions offering to soothe pain points, ranging from claim denials to quality reporting to population health. Just as with EHR, though, RTLS and other new technologies in healthcare will only fulfill their potential if the data they collect is used to obtain actionable insights.
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Healthcare institutions don’t just need data; they need a strategy to use that data in a way that propels efficiency and transparency. The data shouldn’t just be used as a management enforcement tool; it needs to be put in the hands of people on the front line to help them make better decisions right away.
The good news is that the healthcare sector now has a powerful incentive to extract more value from its data. The rise of the value-based care model, which is steadily replacing the traditional fee-for-service model, means that healthcare providers can no longer avoid the need to boost efficiency while maintaining or improving patient outcomes.
Under fee-for-service, there’s no real incentive to keep a lid on headcount or other costs as long as everything is billable. Value-based care should be a game-changer for healthcare’s use of data because it shifts the incentives to efficiency from fees.
Any institution aiming to transition to value-based care needs a comprehensive data strategy, because they are going to be measured on a whole range of quality metrics. When those metrics come up short, institutions need to be able to see the pattern in order to understand how to fix the problem.
If data—the right data, used in the right way—can do this while at the same time make a big chunk of your expenses more efficient, that’s a compelling reason to embrace it.
Jon Ault is a principal in the technology division of Eide Bailly LLP.