As reimbursements shrink and margins tighten, the need for hospitals to reduce inefficiencies and eliminate processes that do not add value for patients or clinicians is more critical than ever before.
Many of the challenges facing healthcare leaders — which we've previously reported on — combined with managing productivity in the wake of physician and workforce shortages are driving the need for flexibility and efficiency. Add the continuing flurry mergers and acquisitions to the mix, and the need for speed and accuracy is more important than ever.
This content is sponsored by Workday
More efficient operations and faster decision making will only happen when accessing relevant, timely data is intuitive and painless. And, you can only access this data and fully leverage the power of analytics with standardized systems that span vital business processes. An increasing number of healthcare organizations are finding that a comprehensive, cloud-based solution gives them the flexibility and efficiency they need to grow in a challenging business and regulatory environment.
Keith Lohkamp, director of industry strategy at Pleasanton, Calif,-based software company Workday, took the time to answer Becker's Hospital Review's six questions on cloud-based systems, and how they can increase efficiency and provide better insight and control into the hospital's bottom line.
The healthcare industry is undergoing a period of rapid change as reimbursement models transition from traditional fee-for-service to pay-for-performance. How should hospital CEOs and finance leaders change their approach to cost management in this new era?
KL: Cost management isn't just about cutting or maintaining costs, but figuring out which costs have the greatest impact on patient outcomes. In other words, hospital CEOs and finance leaders need to look at cost management not just as a means to save money, but also as a way to enable their overall financial strategy. For example, as CEOs and finance leaders determine the best way to serve their patient populations, balancing cost, quality, and patient outcomes becomes a key imperative that impacts how the hospital system is organized, and where and how care is delivered.
Often, efforts to manage costs management happen too late, and they're not done strategically. Today's leader needs to get in front of and sustain and preserve cost savings.
How can cloud platforms ease the integration process after a merger or acquisition?
KL: With any merger or acquisition, healthcare leaders must not only address the questions related to alignment of strategy and priorities, but also address the operational challenges of aligning processes and systems across the combined entity. This is often referred to as "systemness" and requires a series of decisions to be made, such as how will the finance department be organized? Which combined benefits plans will be offered? On which clinical and administrative systems will the organization standardize? Where are our greatest opportunities for economies of scale and how do we support and enable? And, what does the new organization look like now and how should it look in six months or a year?
Cloud systems in general can help ease the integration by providing simplified rollout to the acquired or merged organization without requiring software installation on local servers. In addition, cloud systems are capable of dynamically scaling to fit the organization as it grows. However, the cloud alone is not the only driver to simplifying the integration process. Technology needs to be combined with the right capabilities to support continuous change.
Hospitals evaluating cloud platforms should ask a number of questions in this area:
- How quickly can we add or change an organizational structure? Does it take hours or weeks?
- Can the solution help us get visibility into the financial performance of the combined organization in the near term, even if all parts of the organization have not migrated to a single system?
- What capabilities do we have to roll out new business processes over time without IT involvement?
- Will the system help us promote and encourage our common vision through the information and visibility provided to our employees? What self-service access will they have?
- Do our leaders have access to the information they need to make decisions and understand performance and costs across the organization?
- Does the system make it easier or harder to accomplish our integration and alignment plan?
Understanding the answers to these questions will help assessments of whether the cloud platform provides both the technology and capabilities to streamline merger and acquisition activities. As an example, soon after selecting Workday, one of our customers went through a merger with another hospital system. With older legacy systems, configuring and adding the new employees and locations to the system might take weeks or months. Instead, with Workday, the hospital system was quickly able to bring in the new system, and focus on driving continuity and consistency in processes.
How can cloud-based systems help eliminate inefficiency and streamline everyday processes for clinicians and administrators?
KL: To succeed, healthcare providers need three critical capabilities: visibility, flexibility, and speed. Providers need a complete view of their organizations and deeper visibility into costs, revenues, and talent to help inform strategic decisions. They also need the flexibility and speed to adapt as they execute on their strategy, especially their people strategy as they respond to shifts in market demands and competition for talent.
To achieve this, many health organizations are adopting cloud-based systems which can often be quickly deployed and promptly deliver value. By deploying a cloud-based system for human resources, finance and supply chain, healthcare organizations can gain the insights required to make more real-time decisions regarding hiring needs or spend, allowing resources to be redeployed to more value-add projects. The goal of these cloud-based systems is to create sustainable benefits by providing staff with more direct access to information and increased automation.
Workday healthcare customers are using cloud solutions to provide department managers with real-time visibility to their costs and information about their staff. They are empowered to initiate personnel and organization changes or approve transactions like purchase requisitions and expense reports online, which saves multiple manual steps and backlog. Workday's mobile solutions enable employees to access the system anytime, anywhere, and to fully deliver on the vision of self-service by gaining quick access to check on pay information or report time off, which allows them to spend more time on patient care.
Can you describe how cloud platforms can be used to manage productivity in wake of physician and workforce shortages?
KL: Simply put, legacy systems are holding back healthcare providers' ability to manage their current and future talent needs. As competition for talent increases and employee engagement moves to the forefront, today's HR leader needs a fully integrated solution to support recruiting, onboarding, performance management and succession planning to ensure a complete picture of workforce planning needs.
In addition to the end-to-end integrated HR systems, cloud solutions also empower employees by giving them more direct access to information. Key areas of operations, such as finance and supply chain, are also at risk for filling the talent gap. The more a health system automates processes for procurement, payables, and financial reporting, the greater the impact on overall workforce productivity for those dependent upon the services of these key functions.
Many IT departments are burdened with managing legacy, on-premise systems that require costly software and hardware upgrades that do not always deliver value commensurate with the investment. Cloud systems, on the other hand, provide both the opportunity to drive greater initial efficiencies, as well as the ability to deliver continued value over time.
How can cloud-based technology help support innovation?
KL: Cloud-based human capital, financial and supply chain solutions have the potential to directly and indirectly support innovation in several ways.
First, cloud-based solutions tend to be more modern and incorporate the latest in best practices and technology, offering greater flexibility to hospitals. For example, Finance leaders may want to formalize service lines and roll out analytics and dashboards that provide service line leaders with insights into trends and how they are performing. HR leaders looking to drive engagement and retain the best talent may look to cloud solutions to streamline the onboarding and performance process or to use predictive analytics to identify at-risk employees and help encourage self-directed career paths.
Second, true multi-tenant cloud solutions like Workday are always current with the latest capabilities and technology available to the healthcare organizations. So, as the software provider innovates, the healthcare organization is able to quickly use new innovation to their advantage. For example, innovations around social or mobile delivered by the software provider can be quickly leveraged by the hospital staff. With industry regulation continuously evolving, it’s important healthcare organizations have flexible systems that help them effectively keep pace with reform, without the headache of time consuming, costly upgrades.
Finally, cloud-based technologies free up IT talent and resources to focus on more strategic activities, indirectly promoting innovation. We're seeing our customers reap the benefits of moving administrative applications like human resources and finance to the cloud. In fact, one of our customers has challenged his IT team to apply a cloud-first approach across as many areas as possible, including administrative, clinical, service and collaboration solutions. So, instead of focusing on responsibilities like provisioning servers, applying software patches and maintaining databases, a hospital's IT team can work on technology projects that support patient safety and care quality or help clinicians better understand the relationship between treatment and outcomes.
What are some must-haves to look for when selecting a cloud platform?
KL: Given the changing landscape and new expectations for finance in healthcare, financial leaders need solutions that support new business models, more efficient financial processes, and real-time analytics. Cloud technology can provide inherent benefits in terms of availability, costs, and manageability. However, not every cloud system offers the right combination of functionality, security, and overall experience to address today's challenges.
Most importantly, healthcare executives should understand the overall experience of the system over time. For instance, what is the update experience like? How do new capabilities get delivered and implemented? Does the solution provider help you maximize the use and value of the solution?
In addition to these considerations, healthcare executives should look for five other key characteristics when evaluating cloud solutions:
- True, multi-tenant cloud. Is the solution designed as a true, multi-tenant solution where every customer is always on the same version, or is it simply a hosted version of an on-premise application?
- A unified architecture. Does the cloud solution share a common platform, data model and security structure or is it cobbled together from multiple solutions and technologies that may only be loosely integrated?
- Published service levels and security audits. Does the cloud solution provider offer details on service levels, response times and security policies?
- Extensive configurability. Does the cloud solution allow for extensive configurability of business processes, reports, integrations and other functions, or are you locked into a limited set of features?
- Analytics, mobile and social at the core. Does the cloud solution inherently provide the modern user experience and tools needed to facilitate the access to information needed for faster decision-making?