CFOs can turn raw data into business opportunities with 5 steps — here's how

As finance leaders in the healthcare industry aim to leverage increasingly vast amounts of data, strategic leaders are focusing on identifying systems that streamline, rather than complicate, processes involving financial reporting and business analytics.

In a Jan. 16 webinar sponsored by Oracle and presented by Becker's Hospital Review, Sheila Dietsch, executive director for Oracle Cloud, and Mary Kilmer, executive director for healthcare at Oracle, laid out key steps hospital CFOs must take to help finance teams find data-driven opportunities in an increasingly uncertain reimbursement landscape. Oracle works with roughly 430,000 customers worldwide to provide integrated cloud applications and platform services.

"We see great potential and power in the possibility of people and machines collaborating for this next evolution of collective intelligence," Ms. Dietsch said. Organizations that can use data to deliver actionable insights have the potential to achieve $430 billion in additional productivity benefits by 2020, according to a 2016 report by IDC.

As the healthcare industry shifts toward value-based reimbursement, it's crucial hospital CFOs develop the skills to manage vast amounts of data related to patient outcomes and care costs. Ms. Kilmer added hospitals will have to reevaluate their strategies for staying afloat as the debate surrounding healthcare reform and medical reimbursement continues to drag in Washington, D.C.

"Investor organizations are taking a look and saying costs are rising and revenues are dropping, and reassessing the outlook for providers, especially nonprofits, going forward," Ms. Kilmer said.

Ms. Dietsch and Ms. Kilmer highlighted how, with a holistic approach to financial reporting and business analytics, CFOs will be able to draw out actionable insights from hospital data.

How a holistic cloud provides a successful avenue for financial reporting

A holistic financial cloud uses a centralized reporting system — encompassing clinical, operational and financial cost centers — to help hospital CFOs streamline financial reporting processes.

Rather than housing disparate service line data in silos across various systems, a centralized cloud enables members of the finance team to access real-time data from the organization's clinical, financial, operational and strategic systems. Real-time information is vital for advanced analytics to produce results CFOs trust and feel comfortable using to inform key decisions, according to Ms. Kilmer.

"Being able to look at things from last month, last year, or even yesterday doesn't make sense in this constantly changing world," she said. "And you have to be able to look at all of the data, not just financial. How does financial [data] impact your clinical and quality data? What about your research and grants?"

Advanced analytics can drive financial outcomes in a number of ways. Ms. Kilmer shared how some cloud-based tools help assess the difficult "what if" scenarios hospital CFOs often face.

"What if we bought that physician practice? What if we didn't buy it? What would be the implications if a competitor did?" she said. "How do you make those decisions if you don't have the technology to really look at that crystal ball?"

However, implementing a holistic, cloud-based business intelligence system is not enough. Using financial reporting and business analytics to drive new growth requires more than the appropriate IT infrastructure. A hospital's financial team must first lay the groundwork with five key steps.

1. Automate business narratives. Many hospital administrators use simple desktop tools like spreadsheets to manage financial data. However, sharing separate financial data and business commentary documents among the entire team can be cumbersome. "They spend their time downloading [the data], and then reconciling the data, and then downloading again," Ms. Dietsch said.

Implementing a centralized solution not only simplifies the process, but also encourages transparency and collaboration. Team members, for example, can simultaneously access all reporting data and collaborate on tasks like authoring and publishing content. "You have that single source of truth," she said.

4. Create realistic modeling scenarios. Centralized systems also play an important role in business planning, Ms. Dietsch said. Many hospital finance teams maintain separate spreadsheets to model scenarios according to workforce, capital and operating expenses.

However, because these disciplines are interconnected, modeling exercises can produce misleading or inaccurate results that do not reflect operating realities. Instead, business intelligence systems should encompass a hospital's forecast and budget data for various projects to account for the dynamic nature of hospital operations.

"How do assumption changes in one plan flow or impact those other areas?" Ms. Dietsch said. "This is extremely challenging [to determine] if your plans aren't connected to one another."

3. Build a data lake. A data lake, or data lab, is a storage system that holds a large amount of raw data. While the data may not be standardized or prepared for future analysis, the ease of access enables hospital financial teams to draw upon this information as needed.

"It's building a system where you're looking for innovation," Ms. Dietsch said.

4. Reduce bias in decision-making. Ms. Dietsch highlighted how human biases can influence data interpretation. "Too often we find evidence to support our position and don't look at the data with two eyes or an open perspective," she said. "There's bias in every decision."

Adaptive intelligence, which she called a hybrid between machine automation and human judgment, can help CFOs reduce this bias. Unlike typical software, which requires a developer to program its functions, developers utilize a machine learning model by feeding a computer relevant information from various data sources and allowing the model to learn over time.

5. "Beautify" your insights. Once a hospital's information is in one location, Ms. Dietsch recommended finance teams find effective ways to present noteworthy findings to the rest of their organization. Well-constructed data visualization tools help CFOs improve data comprehension across the entire organization by conveying complex relationships in a straightforward way.

"[Humans] process images or visuals faster than text," Ms. Dietsch said. "Navigating those enormous spreadsheets with dense data can be daunting, and quite frankly frustrating, for non-financial professionals."

Listen to the webinar recording here. View the webinar slides here.

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