Creating a Healthier Future asked John Shewell, executive director of product management in McKesson’s Connected Care & Analytics division, about the connection between advanced data analytics and the continuum of patient care across and between healthcare settings.

Connecting the Continuum
John Shewell, Executive Director, Product Management, McKesson Connected Care & Analytics

CAHF: What’s the connection between costs of care and the care continuum?
SHEWELL: Historically providers looked at cost as an allocation of their resources toward specific care encounters. We looked at the total cost of an organization, like a hospital, and allocated those costs to patient encounters. This allowed us to come up with the cost side of the profitability equation giving us a unique view into the cost of a specific medical treatment or episode of care. Today, our world is much more complex.

Organizations now consist of many types of providers, both owned and affiliated. Additionally, the payment mechanisms are beginning to reward quality and efficiency over volume. The new cost models must take into account this care continuum in order to accurately assess an organization’s performance.

As we move into a world where volume is not the driver for financial success, we need to understand how our resources contribute to the financial success of the system, not the individual encounter. We need to get much better at understanding how things like preventative programs impact the overall financial performance of an organization. For example, the costs of a diabetes outreach program may be offset by some quality-based reimbursement mechanism for a physician, but how does that then impact inpatient admissions to the same organization?

Tomorrow’s cost accounting systems must be able to understand the impact of change across the entire organization, not an individual encounter.

CAHF: What part of the care continuum is the most fertile ground for finding cost savings?

SHEWELL: There are several key areas where we can continue to take cost out of the system along the continuum of care.

Operational efficiency. We need to make sure that we are using our resources as efficiently as possible. This requires us to match demand with capacity in near-real-time as well as streamline the patient flow process.

Variations in care. This can be a very broad topic and has been studied for many years. Still, we see many situations where the same medical problem is treated differently, resulting differing outcomes and costs.

Population heath. There is a lot of effort going on in healthcare to address the overall inefficiencies of care at the population level. Among the big opportunities to remove costs from the system are duplicative services, rework, and non-compliance to care guidelines and missed prevention opportunities. Organizations need to manage these processes while understanding the impact to their business model. Organizations that are highly fee-for-service will not fare well as we reduce these inefficiencies. They need to engage in business models that will allow them to succeed which means they need the tools to model and understand how change will impact them under various scenarios.

CAHF: How do advanced data analytics identify those areas and enable providers to act on them?
SHEWELL: Modern decision support tools allow users to look holistically across their health system to understand their cost structures and see how they match up against their current revenue models. They allow us to look at fixed and variable internal and external costs across all points of care under every payment scenario and model the effects of clinical change on their business model. They allow us to see that optimizing any particular point of care or revenue model does not necessarily optimize the system as a whole. An improvement in one area may lead to underperformance elsewhere. Ideally these systems will allow us to tightly align our cost drivers with our revenue drivers in order to truly eliminate costs across the board while improving outcomes along the way.


Have your own question for Shewell?Attend an expert chat with John at HIMSS14 in Orlando.