As the cost of care rises, efficiency is a must for hospitals worldwide. How can Karolinska University Hospital detect long-term healthcare trends and deploy human and financial resources accordingly?
The hospital uses what-if scenarios to understand the potential future impact of changes to factors such as market conditions, ER admission rates and demographics, and optimize its planning processes.
Helpsplan the personnel required to deliver high-quality care to an aging population
Revealstreatment options that can improve patient outcomes and cut operational costs
Identifiesnew ways of working to improve care experiences and staffing optimization
Business challenge story
Tackling the rising cost of care
As one of the largest university hospitals in Europe, and Sweden’s largest single center of medical research, Karolinska University Hospital is rapidly pushing forward the frontiers of medicine. However, like many providers across Europe, it faces significant challenges as healthcare costs continue to rise.
“We can treat many conditions far more effectively today than we could even a decade ago,” says Pär Adrell, Process Manager and Controller – Personnel Budget and Resource Management at Karolinska University Hospital. “Not only is the hospital saving more people from cancer, it is also at the forefront of creating new therapies for conditions such as infertility. And we are working on innovative diagnostic tools and investigating entirely new treatment areas.”
Claes Ruth, Head of Planning and Strategy at Karolinska University Hospital, continues: “Stockholm is one of the fastest-growing urban areas in Sweden, and we see that patient admissions will only increase over time. At the turn of the new millennium, healthcare spending accounted for only seven percent of Sweden’s gross domestic product [GDP]. Steady advancements in medical technology and an aging population have caused that figure rise to a massive 11.2 percent of GDP today, according to statistics from the OECD.”
Karolinska University Hospital is at present adapting to the Stockholm County Council’s strategy for a network-based healthcare system that enables improved capabilities to provide care at the right level, right degree of specialization and at the right cost.
“Specialization will enable us to direct our limited resources to deliver the best outcomes for patients,” Adrell explains. “To move towards a specialized role, it is vital to plan and budget effectively to ensure we have the right personnel to deliver the highest standard of care. To achieve this goal, we needed to understand the true cost of all of our treatments.”
Ruth comments: “Like most other hospitals globally, Karolinska University Hospital was organized vertically by department, and we attributed costs at the department level. However, because patients move horizontally between multiple departments during the course of their care, it was not always obvious what the actual health results were, how spending should be allocated, or how cost-efficient the process was.
“It was previously very complicated to get a good overview and governance of outcomes across units when calculating the total cost of care per patient [CPP]. The sheer quantity of data—and the complexity of the connections between different datasets—meant that it was not possible to turn information into insight. When we started the process of transforming from a department-centric to a patient-centric environment, we looked for a way to integrate vertical and horizontal analysis and planning capabilities for the organization.”
Uncovering hidden cost-efficiencies with advanced analytics
Karolinska University Hospital decided to develop a highly sophisticated analysis capability and enterprise-class planning and budgeting solution based on IBM® Cognos® TM1®.
“We had been using TM1 in a limited capacity for personnel planning and budgeting for a number of years, and our positive experience with the solution gave us the confidence that it could handle the demanding requirements of a new, integrated data model,” recalls Adrell. “After a successful proof-of-concept exercise, we were convinced that TM1 was well suited as a platform for building our own advanced capabilities for analysis and planning.”
Ruth comments: “At Karolinska University Hospital, we have continued to build on our legacy CPP platform and combine it with new, customized analytics and planning algorithms, driven by the powerful TM1 processing engine. As a result, we are now able to manage very complex and multi-dimensional analyses in near-real time. By assigning procedures to categories such as cancer, surgery or outpatient care, we can see how much each category is actually costing the hospital, and whether it would be more efficient for other providers to handle certain procedures.
“Take emergency appendectomies at our children’s hospital, for example. Using TM1, we can see how many operations we performed this year, how many we performed the previous year, and the costs, personnel and beds associated with those procedures. We can then adjust next year’s forecasted number of appendectomies up and down, and see the impact those changes have on the availability of resources for other procedures at the hospital.”
The team at Karolinska University Hospital is rapidly building a new financial, operational and personnel planning process based on the experience they have gained so far.
“For the most part, we work directly in TM1, which is connected to the data warehouse containing all our financial, personnel and operational data—although we also have the flexibility to import and export data from spreadsheets when we need to,” adds Adrell. “Now that we know the true cost of our care, we can start to build new planning processes. We are currently extending our capabilities by developing our new planning and budgeting using the same logic.”
Delivering outstanding services to a growing population
“Our resources are limited, and we need to be extremely diligent in how we plan, budget and assign our personnel,” Ruth comments. “We serve around 1.7 million patients every year, of which 60 percent come in via the ER and 70 percent will need an X-ray. Even a ten percent increase in ER admissions can have a substantial impact on the rest of the hospital.
“This type of analysis is extremely important given the demographic trends that we’re seeing across Sweden. We increasingly use our tools to analyze and simulate, and TM1 plays an essential part in those tasks.”
By identifying simple-but-costly procedures that could be delivered more effectively by local health centers, Karolinska University Hospital can specialize on its core competences and boost cost-efficiency.
“Specialization will enable us to streamline our operations, which will mean a better experience for our patients,” says Adrell. “We predict that our new way of working will help us to reduce waiting times for treatments and diagnostics, identify economies of scale, and determine the best and most cost-effective treatment options for our patients.
“One good example is new medicines for chronic conditions such as rheumatoid arthritis. Although relatively expensive compared to older classes of drugs, in many cases these new medications enable patients to defer or even avoid the need for surgery. Our TM1 model enables us to factor in the costs of treating conditions with medication versus surgery, and plan our personnel requirements accordingly.”
Ruth concludes: “Effective human resource planning is vital to ensure that we have the right skills in the right place at the right time to treat our patients, and that beds and operating rooms are available when we need them.”
Karolinska University Hospital
Based in Stockholm county, Sweden, Karolinska University Hospital (Karolinska Universitetssjukhuset) is one of Europe’s largest university hospitals. Together with the Karolinska Institute, the hospital is at the forefront of medical development in Sweden. Healthcare, research and education make up equally important parts of Karolinska University Hospital’s work to lengthen and enhance people’s lives. Every year, the hospital treats more than 1.7 million people, and in 2016 it opened an ultra-modern care facility in Solna, Sweden.
- Cognos TM1
- HC: Health Data & Insights
- Planning Analytics
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