CFO Strategies for Analytics Investment, Adoption

Data analytics can help health system's decision making when it comes to reviewing large datasets and where to allocate resources.

With CFOs under mounting pressure to make the right financial decisions for their organizations, it can be difficult to see where all operations and investments are having an impact.

Enter data analytics.

The role of real-time data and analytics has evolved into a primary driver of informed decision-making for finance executives. With quick insights and operational overviews, CFOs need to recognize the importance of adopting analytics to optimize outcomes for their organization.

Ensuring Education

HealthLeaders Exchange member Pat Keel is the chief financial officer at St. Jude's Children's Research Hospital, an organization with a robust research arm of about $2 billion per year.

The hospital uses a governance structure and when a department has a need for specific data, they must go through the analytics council, she explains, which includes representatives from operations, finance, clinical, and research departments.

"We have also really worked to try to push our departments who have analysts within their departments, so the ability for them to access data–integrated data that's in our data lake, which includes clinical, financial as well as other types of data–so they can build their own data sets and work independently instead of going through a competency and evaluation period to get access to that level of data," says Keel.

HealthLeaders Exchange member Bob Flannery, is the chief financial officer at UW Health, and his organization has a similar approach. UW Health's ‘finance business partner model' assigns a finance business partner to each department who undergoes ongoing competency training to ensure an understanding of UW Health's ‘data mart.'

"It is really just helping to elevate expectations at the senior leadership level about the fact that we should not be making decisions in a vacuum of data and analytics to support those decisions that we make," says Flannery.

The first important step to adopting data analytics is ensuring that all staff who will come in contact with understand and are comfortable using it. Like the adoption of any new tech, there must be a type of governance and education for staff to lean on while being introduced to the new system.

CFOs can collaborate with CTOs to ensure a smooth introduction to data analytics and help both clinical and administrative staff with any concerns. Without this education and governance executives risk having their organization fall behind on analytics usage, which can have a direct impact on ROI for analytics investments.

Resource Allocation & Transparency

How can executives effectively communicate with other leaders to ensure resource allocation to high impact areas? An evolving factor within the CFO role is collaborating with other departments and understanding their needs.

According to Flannery, it's not easy to facilitate communication about the fiscal realities of healthcare since the pandemic, but it's an important responsibility. It takes a targeted approach to identify where resources should go, and transparency within the organization is key, he says.

"And then even sharing that, when we do actually allocate some additional resources, what went into the thought process, what went into the recognition that that really was a high impact area for people that we serve," Flannery adds.

While the structure of Keel's organization differs from the traditional health system, with about 30% of resources going to research in basic science departments, her team continues to prioritize the revenue cycle and grants to ensure their donor dollars go as far as possible.

"One of the side benefits of our governance structure has occurred in the data council level where it's a lot of directors, analysts, managers who work with data, and they have worked together to collaborate on getting data or on analyzing data," she says.

"So it's not just a one off department looking at something, it's across the organization and collaboration amongst the areas about how to solve whatever problem or challenge we're looking at the moment."