Wednesday, April 7, 2010

Business Insight: The Critical Path for Improving Decisions - Why Insight Matters (PART 1)

by special guest blogger, John P. Indrigo - President of JPI Enterprises, LLC

“A point of view can be a dangerous luxury when substituted for insight and understanding.” ~ Marshall McLuhan

• Greater insight is 2 times more likely to influence the actions of employees at higher performing organizations than at their peers in all industries

• Sharing of data is viewed as loss of control 2.5 times more often at poorer performing organizations than with higher performing peers

Insight is the power to see into most any given situation. It requires a combination of experience and analytics, and enables organizations to uncover opportunities as well as expose shortcomings - establishing a fact-based basis for corrective action. The balance between experience and analytics is subject to much debate, as evidenced by the different experiences related in the books Blink (Malcolm Caldwell) and Competing on Analytics (Thomas Davenport and Jeanne Harris).

The two approaches to gaining insight are not mutually exclusive, and there is growing quantifiable evidence that both higher competency and pervasiveness of business intelligence and analytics lead to superior performance. Insight gained from business intelligence and analytics will allow a healthcare organization to better understand their challenges and opportunities relative to patients, providers, payers and procedures, and how each affects profitability. IDC research shows that managers in higher performing organizations are 2 times more likely than their poorest performing peers to supplement experience with analytics.

“Facts do not cease to exist because they are ignored.” ~ Aldous Huxley

Insight enables better decision making; if information is unavailable at the point of decision or if there is lack of consensus about the meaning of data, organizations will likely face a disconnect between the evidence and actions taken. Organizations can make fast decisions based on poor quality data, for example, or they can capture high quality data with such latency so as to make the data virtually useless. These examples highlight the dilemma facing many healthcare organizations, especially small to mid-size organizations.

Unfortunately the data available about patients, providers, payers and procedures often resides in unrelated (and often stand-alone) databases. Faced with the expense and trauma often associated with the deployment of new “enterprise” information technology systems, the majority of healthcare organizations interested in business intelligence and analytics have opted to implement stand-alone applications that rely on data inputs from multiple disparate sources. While these systems serve a useful purpose, they remain problematic for two reasons:

a) The cost and elapsed time to acquire deploy and maintain such systems is beyond the reach of many healthcare organizations.

b) The latency with which the data becomes available often renders it interesting but irrelevant.

New technologies are emerging that show promise in overcoming the 2 major shortcomings –cost and latency - of business intelligence and analytics tools for healthcare organizations, particularly the small to medium organizations. Based on large-scale database technology, provided via Software as a Service deployment, and using readily available data input sources (such as 837/835 datasets), these tools can help close the insight gap in an affordable and non-intrusive way.

Business intelligence and analytics, leading to greater insight, can now be added to the management tools of virtually all healthcare organizations.

(To be continued - part 2 coming soon)

Author: John P. Indrigo
President of JPI Enterprises, LLC
Phone: 813-503-0400
View Full Bio Here

Not for reprint or other use without author's permission.

1 comment:

Stephanie D. Speth said...

Great article John - looking forward to part 2.

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