Metrics should play major role in risk management, experts say
Sophisticated data collection and usage becoming mandatory
If you haven't yet incorporated metrics into your risk management program, you should begin immediately, because the use of metrics will drive much of what happens in the field in coming years, say risk managers and other experts. Risk managers who are using metrics may be ahead of the curve, but still need to ensure they are getting the most out of them.
Metrics are measurements that allow quantitative measurements of your success, problem areas, and efforts to improve. More than just data compiled on individual issues, metrics are analyzed and combined in ways that provide risk managers and health care leaders with the insight to understand the implications of the data more than if they focused only on the individual "silos" of information about different topics, explains Ed Hall, MS, CSP, senior director of risk management controls and education at Stanford University in Palo Alto, CA, including the Stanford Hospitals and Clinic.
The metrics are often compiled in "dashboard" reports to senior leaders to help them visualize and track trends on every level of the organization and to align activities with key goals, Hall says.
"We use metrics and dashboards for a lot of our value-driven cost justification in our program," Hall says. "We have a full range of 20 or 30 projects going at any time, and for our internal risk management, we use [a] dashboard that shows us where all the projects are and what the status is. We review that in our weekly meetings with our senior cabinet. When we start to get a little more quantitative with some initiatives, especially the larger ones, we'll use a value-driven approach."
With the value-driven approach, Hall and his colleagues pull in all the value drivers associated with a particular program, anything that could add value to it, and determine the value associated with each element. For instance, he says, for a safe patient handling program, the drivers might be reduction in patient falls, reduction in workers' comp costs, reduction in lost time, reduction in employee turnover, and an increase in patient referrals.
"We try to put a value on each of those to come up with a total value of the program to the organization," he says. "Then, we do a tornado diagram to see which one has the most value associated with it. We found that the biggest value was associated with the reduction in turnover, not the reduction in workers' comp, the way you might expect."
ROI always a hot topic
Stanford also uses a waterfall diagram to show the costs and the total value associated with the segments of each program, showing the total return on investment (ROI), always a major concern in the C-suite. The hospitals and clinic also work with their insurer to benchmark medical malpractice data and compare the performance to other facilities.
"We just started a dashboard this past year where we take our medical malpractice and workers' compensation data and present that dashboard to our senior leadership," Hall says. "That allows them to see in real time, within three or four days of our reserves changing, what our total incurreds are, what our largest claims are, and what incidents were involved with those events. We use the dashboard to communicate with our executives about what is going on with the risk program and where we are as that relates to our financial losses."
Stanford has been using metrics and dashboards increasingly in the past few years, and Hall urges other risk managers to adopt the tools more. Metrics can have a direct impact on the risk management program by allowing you to focus your efforts and resources more effectively, he says. Stanford's safe patient handling program was aiming for a 30% reduction in patient handling injuries, but actually achieved a 40% reduction over the first year a success that Hall attributes in part to the effective use of metrics to determine which elements of the program could have the most effect.
"We exceeded expectations by about 33%, which is pretty good for the first year of a program," he says.
Many sources for metrics help
Although the term "metrics" can imply that it is an entirely new concept, Hall points out that risk managers have long gathered data to study issues and justify their efforts. Metrics simply takes that information gathering and usage to a new level that yields better results, he says, mostly by making connections and taking information out of silos. Stanford offers metrics classes to risk managers, in conjunction with the American Society for Healthcare Risk Management (ASHRM), which also provides educational materials. (For more information on the ASHRM offerings, go to www.ashrm.org. For the Stanford classes, go to http://scpd.stanford.edu/landing/sdrm_health.jsp.)
The National Quality Forum (NQF) and the Institute for Healthcare Improvement (IHI) also offer information on the use of metrics, notes Carol Burkhart, RN, MS, ARNP, CPHRM, senior vice president for clinical health care consulting with Marsh Risk Consulting in Chicago. (For the NQF, go to http://www.qualityforum.org/, and for the IHI, go to http://www.ihi.org/ihi.)
Metrics will become even more important when the federal government launches its value-based purchasing initiative in 2012, Burkhart says. Part of health care reform's emphasis on value and eliminating fraud, the value-based purchasing initiative will require providers to demonstrate that they are providing quality care at the best possible price, she explains. That will require extensive data collection and analysis, she says.
"The Office of Inspector General has emphasized the importance of metrics and dashboards in reporting to the board, which ultimately has the responsibility for ensuring quality," Burkhart says. "Risk managers cannot afford not to have a grasp of metrics."
Burkhart cautions that how you present the data to the board is important. Dashboards are a good method for synthesizing and illustrating complex data to the board, but she warns that color-coding in the dashboard can be misleading. A dashboard with lots of green to represent good outcomes, for instance, might be misleading if the board does not understand how the threshold for good and bad outcomes was set.
Can be a career enhancer
The adoption of metrics can help experienced risk managers keep up with younger people entering the field, notes Douglas Coleman, account manager with the Health & Human Services Industry Team at The Graham Company, a consulting firm in Philadelphia. Those who have been in the field for many years may be stuck in the old way of doing things, whereas those coming out of college and rising into risk management leadership positions are more likely to use metrics and dashboards, because they are generally more familiar and comfortable with technology, he says.
Strategic use of metrics and dashboards can help the organization better understand its patient population, apply a holistic approach to patient care, and identify and eliminate wasteful spending, he says.
"It's going to result in a better understanding of risk management concerns," Coleman says. "Most organizations are driven to accumulate a lot of data, but usually that data is isolated in silos. By using a metrics and dashboard approach, this data can be integrated and tell a much more complete story."
Adopting metrics can begin with simple initiatives, Coleman says, such as tracking malpractice claims and which ones were not covered by insurance and the details of how those claims came about, how they were handled, and the different costs incurred by the provider.
"Without studying the data in the big picture, you're going to focus on insurance premium up-front costs and consider that a success," he says. "But when you can see the big picture, you realize that maybe it's worth it to enhance the coverage on your insurance so that you avoid these uncovered claims, which are hitting you a lot harder than the insurance premium was."
Culture change may be needed
Using metrics can require a culture change, Coleman says. This type of data analysis may put the spotlight on people within the organization who are not used to being the subject of such attention, and so the use of metrics and dashboards should be supported at the highest levels of the organization, he says.
"A lot of organizations have metrics they use for financial analysis, and some use metrics for some administrative functions, but when it comes to focusing on patient care, a lot of providers use data analysis sparingly," Coleman says. "That's surprising, because patient care yields some of the most costly expenses for an organization, like malpractice claims."
Coleman offers the example of one health care provider he worked with to determine why a high percentage of malpractice claims were coming from a particular segment of patient care. By using metrics to cross-match data about the claims, the patients, and the way the care was provided at that clinic, the organization determined that a large percentage of patients claiming improper care also had missed many appointments. The clinic, however, was not keeping good records on missed appointments or efforts to remind patients about scheduled visits.
"They instituted a plan to call every patient 24 hours before their appointments, and if they find out the patient is going to be a no-show, they work with the patient to reschedule," Coleman says. "If they miss the appointment after that, the clinic documents the file a lot better than before, providing support in claims defense because they can demonstrate in court that the person's injuries were due in large part because they just weren't coming to treatment."
Not just a QA activity
Risk managers should not cede metrics and dashboards to the quality assurance department, says Roberta Carroll, ARM, CPCU, MBA, CPCU, CPHQ, CPHRM, senior vice president with Aon Risk Solutions, a consulting firm in Odessa, FL. In the past, risk managers have shied away from in-depth data analysis, leaving that to quality and relying only on a more silo-like aggregation of data about malpractice claims and other risk issues, she says.
With more data available now on the cost of injuries or illnesses to the provider, risk managers can develop more sophisticated analyses that show their ROI, she says. For instance, national data show that a fall with injuries can cost you somewhere around $36,000, Carroll says.
"If you prevent just one of them, you can show a good ROI," she says. "Risk managers are starting to see that data can be your friend, and how it can help you show added value to the organization. Up to now, it has been a challenge to calculate the cost of risk if you didn't really know the cost of the sequellae of the outcome."
Metrics represent an opportunity for risk managers to quantify their department's value to the organization, which will improve the visibility and stature of the risk manager within the organization, Carroll says. Metrics also will help you get the funding you need, especially in times of tight budgets.
"In order to get approval for the project that needs some investment of resources, you need to be able to say what you anticipate your return on investment will be," she says. "You have to say that you're going to reduce these incidents by 25% or whatever, and the cost of those incidents minus your investment shows this is a worthwhile expenditure. Data is king. Data can be your best friend."
Carroll suggests that risk managers partner with other departments that may already be using metrics more extensively, such as quality and performance improvement, both to learn more about the use of metrics and also to share data that may reveal a bigger picture.
Crucial to career success
Incorporating metrics and dashboards is crucial to the career success of a risk manager, she says. Risk managers who lag behind in the use metrics may find themselves struggling to find a role in the organization.
"My fear is that the organization has a quality person who is adept at this, and now they've probably hired a patient safety person in the past few years; and that person is probably using metrics," Carroll says. "You've got people doing parts of your job, so what is the risk manager going to do if they use this data to elevate their roles? Is the risk manager going to be relegated to counting falls and chasing lost dentures? You need to find a spot for yourself, and being better able to evaluate and use data is going to get you there."
Sources
Ed Hall, MS, CSP, Senior Director, Risk Management Controls and Education, Stanford University, Palo Alto, CA. Telephone: (650) 736-8502. E-mail: [email protected].
Douglas Coleman, Account Manager, Health & Human Services Industry Team, The Graham Company, Philadelphia, PA. Telephone: (215) 701-5276. E-mail: [email protected].
Roberta Carroll, ARM, CPCU, MBA, CPCU, CPHQ, CPHRM, Senior Vice President, Aon Solutions, Odessa, FL. Telephone: (813) 926-8069. E-mail: [email protected].
Carol Burkhart, RN, MS, ARNP, CPHRM, Senior Vice President, Clinical Healthcare Consulting, Marsh Risk Consulting, Chicago. Telephone: (312) 627-6222. E-mail: [email protected].
If you haven't yet incorporated metrics into your risk management program, you should begin immediately, because the use of metrics will drive much of what happens in the field in coming years, say risk managers and other experts. Risk managers who are using metrics may be ahead of the curve, but still need to ensure they are getting the most out of them.You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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