AMID RISING COST pressures and the move towards greater “accountability” for reducing cost and improving patient outcomes in healthcare, the
importance of effective business analytics
– including I T benchmarking – is at an all-
time high.1, 2 With the diminishing financial
incentives from meaningful use, the ability
for healthcare organizations to compare
areas of IT costs and staffing with known
healthcare leaders or established best
practice standards can allow healthcare
organizations to identify significant areas
of inefficiency or opportunities for financial
improvement. 3-6 However, many current IT
benchmarking programs and databases
rely on industry-wide averages, without
consideration of differences in the ways
costs are actually calculated from one
healthcare organization to another. 7-9 Given
genuine and very real variations in IT
department structure between healthcare
organizations, this approach can limit the
accuracy – and ultimately the value – of the
“benchmark.” 10, 11 This has pushed many
organizations to collaborate in an attempt
to more effectively leverage business
intelligence and analytics to identify
areas for cost reduction in their health IT
spending. 12, 13
METHODS
In response to this industry need, the SI
Health IT Benchmarking Program was
created. This unique, collaborative program
focuses on normalizing IT cost data between different organizations, thus allowing
hospitals to make direct “apples-to-apples”
comparisons with similar facilities.
The Benchmarking Program was ini-
tially developed in 2006, when several
health system CIOs approached SI looking
for a more accurate way to compare IT
spending across health systems. CIOs
and CFOs from these health systems were
frustrated that data sources being used
for IT benchmarking at the time were
inconsistent in how they reported IT cost,
due in great part to how the IT function is
differently organized in each health sys-
tem. There was a common scenario: CFOs
had data indicating their health system
IT was “high cost” when compared with
others, and the CIOs questioned how those
numbers were specifically calculated and
which data elements were included. Huge
variances in reported IT costs came from
the inclusion (or exclusion) of categories
and functions such as depreciation, PACS,
HIM, Biomedical Engineering, Informatics
and Telephony, among others.
Led by Spectrum Health (and with
A Unique Approach
to Business Analytics:
The Scottsdale
Institute Health IT
Benchmarking Program
By David C. Classen, MD, MS; Jason D. Fortin; Shelli Williamson;
and Gordon Rohweder
