Performance Measures & MetricsBased Management
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1 Performance Measures & MetricsBased Management The 2015 OPEN MINDS Performance Management Institute Pre-Institute Seminar Steven E. Ramsland, Ed.D., Senior Associate, OPEN MINDS February 11, :00pm 3:30pm York Street, Gettysburg, PA Phone: info@openminds.com
2 What Is Business Intelligence? Tools enabling analysis of organizational information to optimize management decisions and performance. BI technologies provide historical, current, and predictive views of business operations. Retrospective What Happened Directive What Is Happening & Where Are We Headed Predictive What Will Happen 2
3 Where Are We With Business Intelligence Among Payers & Care Management Organizations? Elemental data available for decision-making State data sets highly variable and few are connected outside of departments Health insurers traditionally focused only on claims management, and not on health system or outcomes management 3
4 Where Are We With Business Intelligence In Service Provider Organizations? The percent of physicians using EHR systems was just 17 percent in 2008 now more than 50 percent 45 percent with EHRs say they routinely access clinical data from outside their own organization For hospitals, just nine percent had adopted EHRs in 2008 now more than 80 percent have demonstrated meaningful use of EHRs 17% of hospitals using comprehensive functionality Non-profit health/human service organizations other than hospitals far behind the EHR adoption curve 8 Core EHR Functions Health information and data Result management Order management Decision support Electronic communication and connectivity 6. Patient support 7. Administrative processes and reporting 8. Reporting and population health 4
5 Bioconnectivity Roadmap For U.S. Health & Human Service System Clinical Data From New Diagnostics & Emerging Neurotech EMRs & EMR Data (NHIN Of The Future) Bioconnectivity Single Real-Time Clinical, Admin, & Cost Data Set Clinical Metrics From E-Health & Remote Consumer Monitoring Connection of All Data Sets Via Web Tools (With Consumer & Professional Access) 5
6 Management Teams Are Waiting For "Big Data" To Arrive & Be Perfect! Postponing the cultural changes involved in metrics-based management and some hard decisions... The challenges of the evolving health and human service market are not waiting for big data to arrive Organizations need to manage both strategy and business processes with the information that they have The KPI of strategic management The KPI of business process management 6
7 The Challenge Is To Get Maximum Leverage Of Your Investment In EHR Requirements Investment in electronic health recordkeeping system - As a compliance cost (cost only) As a process or efficiency improvement model (operations ROI) As a source of strategic decision support tool (priceless) 7
8 Key Strategic & Market Information You Need To Make Critical Business Decisions 1. Development of organizational strategy using data to assess internal resources against external environment Design of operating unit plans to support strategy implementation using data to conduct operational business unit gap analysis and set performance standards Management of performance using data to manage the organization s operations to the performance metrics required for success Evolution of market positioning using data to compare organizational performance against competitors to gain competitive advantage Participation in performance-based contract arrangements using data to prospectively estimate (and manage) performance 8
9 #1. Development Of Organizational Strategy Metrics Needed For Optimal Strategic Planning: 1. Income/revenue, by source and service line Allocated charitable income/revenue, by service line 2. Profit/loss by service line without charitable allocation (if NFP) 3. Total profit/loss by service line 4. Total number of consumers served, by service line and payer 5. Total number of service units delivered, by service unit type, by service line and by payer 6. Staff/facility productivity or yield, by service line and/or operating units 7. Total direct cost per service unit, by service unit type Total indirect cost per service unit Total cost per service unit 8. Profit/loss per service unit 9. Consumer satisfaction and performance, by service line 10. Charity/subsidy as % of total unit cost (if NFP) 9
10 Strategic Decisions Supported By These Service Line Metrics Service line/portfolio management decisions Markets to pursue, and service lines to offer Revenue and return required for each service line Target costing decisions Assessment of organizational competencies required for success in specific scenarios 10
11 #2. Design Of Operating Unit Plans To Support Strategy Implementation Tie to objectives and strategies in organizational plan and assign accountabilities Have quantitative metrics that define success of unit operations: Turnover Productivity Claims paid Process measure Revenue Cash flow 11
12 #3. Management Of Performance 1. Establish performance standards for each operating unit 2. Develop standard reporting of performance (dashboards, etc.) appropriate to each operating unit 3. Modify management and supervision approach to integrate metrics-based approach 4. Use internal and external benchmarks, where possible, to identify best practices and improve operating processes 5. Within each operating unit, link performance appraisal (and compensation, if possible) to performance 12
13 #4. Evolution Of Market Positioning The relationship of a service, or an organization, to the competition in a specific market Positioning is: Comparative to competitors Defined in terms of perception of customer Limited positioning options Price Performance attributes Ease of use Ability to benchmark own performance against competition is key to market positioning 13
14 #5. Participation In Performance-Based Contract Arrangements Unit cost management Data to monitor application of EBP and comparative effectiveness models to service delivery Monitoring performance and anticipating penalties and bonuses in value-based purchasing arrangements Monitoring bundled case rates, capitation, and global payment reimbursement models Organizational performance Performance of contractors and partners 14
15 III. Using Your EHR Dataset To Support Executive Decision Making 15
16 Leverage Of Information Is Key For Success Data: raw symbols with no significance beyond its existence Information: data that are processed to be useful and provides answers to "who," "what," "where," and "when" questions; given meaning by way of relational connection Knowledge: application of data and information that answers "how" questions; the collection of information with the intent to be useful. Wisdom: an understanding of "why 16
17 Pushing Data To Managers Is Key To Leverage Dashboard Is Common Model 1. An intuitive graphical display that is thoughtfully laid-out and easy to navigate 2. A logical structure that makes information easily accessible 3. Little or no user training is required 4. Data displays that can be customized and categorized to meet the specific needs of each user 5. Regular and frequent updates of dashboard information for accuracy and relevance to current conditions 6. Information from multiple sources, departments, or markets can be viewed simultaneously Dashboard: A computer interface that organizes key performance indicators in an easy to read format, displaying the information that executives need to run an organization 17
18 Creating Management Dashboards To Support Executive Decision-Making 18
19 Framework For Executive Team Performance Management Dashboards 1. Determine critical performance outcomes for success of organizational strategy (starts with the strategic plan) 2. Distill from these performance outcomes the specific measures (leading and lagging) that would best enable the management or measurement of success 3. Determine which of the data to create these measures are available in current data systems and identify proxy data and measures where not available 4. Design dashboard based on available measures 5. For each measure, create an appropriate display and measurement and reporting specifications For long-term planning, identify data not currently available in system for necessary measures and conduct ROI of costs to gather data 19
20 Create KPI Dashboards Appropriate To Level Of Organization Organization-Wide Performance Indicators Organization Strategic Plan & Objectives Operating Unit Performance Indicators Operating Unit Plan & Objectives Program-Specific Performance Indicators Program Plan & Objectives Overall Agency Performance 20
21 Five Step Process To Creating The Dashboards Needed To Maximize Organizational Performance Identify and quantify what performance means for your organization Create an overarching organizational strategic dashboard for the board and executive team based on strategic vision, mission, and objectives Develop an executive team dashboard of leading indicators of organizational success Design a dashboard at the business unit/program level that provides managers with the tools to measure and maximize unit performance Leverage operational performance within programs with functional dashboards 21
22 Step #1: Identify & Quantify What Performance Means For Your Organization Mission, vision, and objectives of your strategic plan Customer (consumer and payer) measures of value and performance Regulatory or legal performance measures Industry financial or operational metrics 22
23 Strategic Intent: The leader in translating research into effective practice solutions. S2. Local communities experience a sense of ownership of Hillside S1. HFA s system of care produces positive outcomes Stakeholder Financial F1. Diversify revenue streams F2. Develop a stronger system of care through growth. Innovation Customer Operational Excellence C2. Create customer solutions. C1. EB practices achieve effective outcomes W3.EB s practices are delivered according to design W1. Efficient standard work processes drive productivity. Learning and Growth W10. We understand Strategic Partners needs. W6. We infuse innovation across our value chain. W9. Strong parent and youth advocacy W5. Service models are based on research. W4. Hillside has research partnerships. Internal Work Processes L1. IT systems add value and ease complexity C3. Preferred provider of services W7. Service growth includes research grants. W2. User-friendly systems provide accurate data Partnerships L3. Research infrastructure supports HFA system of care. L2. Organized system shares knowledge and learning. W8. Communication exceeds customer expectations. L4. Hillside is a destination for diverse talent. L5. Behaviors consistent with COI values. HFA BSC FY0809, rev
24 24
25 Step #2: Create An Overarching Organizational Strategic Dashboard For use of the board and executive team Based on strategic vision, mission, and objectives Minimalist approach with focus on key board responsibilities and strategic objectives 25
26 26
27 Step #3: Develop An Executive Team Dashboard Of Leading Indicators Of Organizational Success Real time organizational performance metrics to allow strategic navigation Based on the board s strategic dashboard Facilitates management through management by exception 27
28
29 2014 OPEN MINDS. All rights reserved. 29
30 Step #4: Design Dashboards At The Business Unit/Program Level Provides managers with the information needed to measure and maximize unit performance Focus on leading indicators that allow management intervention early in performance challenges 30
31
32 Prototype Of Billing Unit Performance Management Dashboard 32
33 Step #5: Leverage Operational Performance Within Programs With Functional Dashboards Tracks the performance of specific functions Can automate and improve efficiency of specific tasks Allows early identification of operational fail points Basis for performance assessment of individual teams and team members 33
34 Prototype Of Service Professional Performance Management Dashboard 34
35 Prototype Of Intake Department Performance Management Dashboard 35
36 36
37 Dashboard Development Rules 1. Agreement on performance is the starting point 2. Brevity is key 3. Only automated data is allowed (no hand tallies) 4. Leading indicators preferred but lagging indicators essential in some areas 5. Perfect data is not always available use of proxy indicator data is the solution 6. Dashboard display design must be done with the users 7. Where data not currently available, ROI on data collection costs is recommended 37
38 Some Thoughts About Benchmarking & Performance Targets Using benchmarks and performance targets to challenge and drive continuous improvement in service quality and operations Allow your organization to Compare with other firms in your industry Develop cross-industry comparisons Develop points of reference or standards of practice Make best-in-class determinations Develop best practices 38
39 Benchmarking Process A Collaborative Approach Develop group of organizations to initiate benchmarking process Agreement of organizations about process, goals, and measures to benchmark Collect data and analyze Create data collection instrument Reality check and refinement Publish benchmarks Purchase Or Acquire Benchmark Data Compare it to your organization s measures 39
40 Metrics In Supervision & HR Functions Benchmark program and individual performance with other programs and individuals Make performance reporting a key part of managerial and clinical supervision Use dashboards as a means to keep your staff s eyes on the performance targets Use performance-based job descriptions and evaluation processes 40
41 Keys To Performance Management Success... Why competitive advantage? It is what differentiates you from your competition and makes consumers/payers select your organization. A superiority gained by an organization when it can provide the same value as its competitors but at a lower price or can charge a higher prices by providing greater value through differentiation. Without planning, prioritization of investments of time and resources (and identification of performance requirements) not possible. 41
42 Keys To Performance Management Success... 42
43 #3. Think deliberately about how to combine and use the information you have now what data, what data management options, etc. Keys To Performance Management Success... 43
44 #4. Create an executive team that accepts the fact that the analytics of the future don't belong to "IT" and it s not network management create cross-disciplinary teams for managing and using data Keys To Performance Management Success... 44
45 #5. Build tools to bring data to managers and front-line staff imbed analytics into services, systems, and processes which makes it harder for decision makers to avoid metrics-based management Keys To Performance Management Success... 45
46 #6. Prepare for the human resource issues that come with a new way of managing organizational performance Big brother is watching technology reports on activities of front-line staff and consumers immediately Decisions pushed to consumers & front-line staff Decisions are frequent & fast real-time service line changes with real-time management adjustments "reading the digital smoke signals Keys To Performance Management Success... 46
47 #7. The hard work of performance management is in operational execution Keys To Performance Management Success... Metrics-based management sounds easy Organizing processes and systems, teams, and resources to achieve metrics required by the market is hard work and a huge culture change The new role of supervision The new executive team responsibility 47
48 The market intelligence to navigate. The management expertise to succeed York Street, Gettysburg, PA Phone: info@openminds.com 2014 OPEN MINDS. All rights reserved.
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