Published on 22-Jun-2012
"We have now been using IBM Cognos TM1 for over a decade, and we have evaluated other solutions over the years. We quickly realized that no other solution can match up to it, not only in terms of functionality, but also in terms of cost. Other solutions we evaluated were at least double the cost of IBM Cognos TM1." - Neil Golub, Vice President of Planning and Analysis, VITAS Innovative Hospice Care
VITAS Innovative Hospice Care
VITAS Innovative Hospice Care, one of the oldest and largest hospice care providers in the United States, was founded to preserve the quality of life for those with a limited time to live. It is a company defined by the needs of the patients and families it serves. VITAS has enjoyed dynamic growth since its founding as a volunteer organization by a United Methodist minister and an oncology nurse. Today, VITAS employs more than 11,000 professionals who care for terminally ill patients daily.
Manage heavy volumes of financial data and enable in-depth analysis of payroll and labor tracking, internal compliance, patient care costs and healthcare reimbursement.
IBM Cognos® TM1® and IBM Cognos Business Intelligence give VITAS more accurate and timely information on budgets, payroll and operations. The IBM solutions also provide faster, more nimble reporting, as well as an ease of use and scalability that the company could not get out of Microsoft Excel.
Supports business growth while keeping analytics costs low: over the past 14 years, although net revenues have increased by more than 300 percent, the company has only needed to increase analyst headcount by 25 percent to support new divisions and services.
Provides sophisticated reporting and planning capabilities that help VITAS track its activities and monitor trends. Although increasing Medicare requirements have created additional costs, the company has been able to optimize its operations and maintain excellent financial performance.
VITAS Innovative Hospice Care, one of the oldest and largest hospice care providers in the United States, was founded to preserve the quality of life for those with a limited time to live. It is a company defined by the needs of the patients and families it serves. VITAS has enjoyed dynamic growth since its founding as a volunteer organization by a United Methodist minister and an oncology nurse. Today, VITAS employs more than 11,000 professionals who care for terminally ill patients daily – primarily in the patients’ homes, but also in the company’s inpatient hospice units and in hospitals, nursing homes and assisted living communities, and residential care facilities.
VITAS team members include registered nurses, licensed practical nurses, home health aides, physicians, social workers, chaplains and other care-giving professionals. Over the years, VITAS has expanded by adding locations in new markets, operating 52 hospice programs in 18 states and the District of Columbia. VITAS currently cares for almost 14,000 patients a day in hospice programs across the US, and has served over 1.1 million patients since it was founded in 1978.
Meeting the challenge
VITAS relied on Microsoft Excel spreadsheets for reporting and data analysis. However, with multiple facilities, levels of service, and patients, VITAS found that managing all of its financial data and performing the required calculations was a tremendous task. Simply compiling information was extremely time-consuming, and loading the general ledger data took as long as 40 minutes.
As VITAS added more and more data with mounting levels of detail, the multi-spreadsheet and multi-workbook approach became too unwieldy and inflexible. VITAS needed a robust financial analytics solution that was able to handle heavier volumes of data and do more in-depth analysis of its payroll, patient care costs and healthcare reimbursement. That, coupled with the fact that the financial team spent considerable amounts of time simply gathering and collating operational and financial data, meant management could not access the information it needed for day-to-day or strategic decision-making in a timely manner.
Adopting the right strategy
The VITAS financial planning department was a team of Excel power users, so management wanted to use this in-house skill set while giving analysts a more flexible and comprehensive tool. VITAS knew a real-time analytics engine with an elegant Excel-like interface would enable users to analyze the company’s multi-dimensional data in many ways that were not previously possible.
After a brief review process, VITAS selected IBM Cognos TM1, based on its ease of use and ability to rapidly analyze enormous amounts of data and perform complex scenario planning. “One of the things we liked about IBM Cognos TM1 was that it nearly eliminated any reliance on outside consultants – in both system deployment and management. We became the experts on our financial systems – not some outsourced group,” says Neil Golub, Vice President of Planning and Analysis at VITAS.
VITAS implemented IBM Cognos TM1 as a corporate-wide solution initially in the mid-1990s and has enjoyed continued success using the solution, recently upgrading to the latest version of the software. The system is used by 16 financial analysts in various departments, 21 accountants and over 70 clinical and clerical personnel. More than 120 VITAS executives see and work with reports generated from the system. VITAS has also implemented an executive dashboard that is based on IBM Cognos TM1 Web, the real-time web interface of IBM Cognos TM1. This too is a corporate-wide solution, with 52 offices in 18 states and the District of Columbia now using the dashboard.
Golub notes, “We have now been using IBM Cognos TM1 for over a decade, and we have evaluated other solutions over the years. We quickly realized that no other solution can match up to it, not only in terms of functionality, but also in terms of cost. Other solutions we evaluated were at least double the cost of IBM Cognos TM1.”
Familiar interface promotes ease of use
By using Excel as the front-end for IBM Cognos TM1, VITAS executives and financial analysts can easily access the information, automatically make changes throughout linked data, and drill down to details. The entire system looks and acts like a spreadsheet, but has added flexibility and depth that is impossible to attain with spreadsheets alone. This feature makes it possible for analysts and their managers to analyze their data quickly on their own, without relying on help from the finance department.
“We have found IBM Cognos TM1 adapts easily to the way our management team works,” says Golub. He continues, “Often senior managers need new reports on trends or other information on which we have not reported previously. In the past, a new request like this would have required a programmer to hard-code a solution. With IBM Cognos TM1, analysts can create their own reports without help from the IT department – ultimately giving the managers more power in a timely manner.”
A wide variety of applications
VITAS uses IBM Cognos TM1 for a variety of different tasks, such as analyzing payroll and patient care costs and maintaining compliance with healthcare reimbursement regulations. Over the years, VITAS has entered under-served markets. VITAS moves into those markets backed by the strategic analysis and planning necessary to both meet patients’ needs and make good business decisions. VITAS uses IBM Cognos TM1 for this analysis and planning, modeling data that affects profitability such as trend data for the potential location, regional government reimbursement rates and local labor costs.
With the IBM Cognos solution, VITAS financial planners can pull together detailed information in ten minutes – a task that used to take them an entire day to complete. This information allows planners and the executive management team to determine how long it will take a new market to become profitable. VITAS can then determine how to capitalize on the new market and how it will affect corporate cash flow. This approach to managed growth has enabled VITAS to grow its services without growing its financial planning department.
The annual planning model that performs these analyses utilizes IBM Cognos TM1 templates for driver input, review and adjustment. These templates reduce the time taken to prepare budget iterations significantly, from more than a day to just a few minutes, once the initial drivers are populated. VITAS plans to roll out a similar model for quarterly planning within the next few months.
Improved workforce planning
IBM Cognos TM1 has also helped VITAS with its extremely complex payroll analysis, which can now be performed on a weekly basis rather than after month-end. The company employs more than 11,000 professional caregivers, from nurses and physicians to social workers and chaplains. Because it provides services in a variety of settings – including patients’ homes, long-term care and assisted living facilities, and in-patient units – travel time, mileage rates and overtime must all be accounted for accurately.
VITAS uses IBM Cognos TM1 to create weekly labor targets, which are adjusted by patient volume and analysed against data from the employee timecard system. The data is used to prepare a balanced scorecard that highlights any variances from the targets, enabling the company to monitor performance easily. As a result, VITAS managers can react quickly, adjusting staffing levels and/or patient volume proactively on a weekly basis, instead of having to wait until the end of each month to assess the efficiency of the previous month’s operations. This solution gives VITAS the information it needs to make changes to maintain exceptional care levels, while remaining profitable.
Enhanced operational monitoring
To increase its insight into caregivers’ activities, VITAS has introduced IBM Cognos Business Intelligence, which automatically generates and distributes scheduled reports and email alerts to appropriate users across the organization. This helps managers keep tighter control of care-givers’ activities, enabling them to monitor waiting times, the duration of visits to patients, traveling times, overtime, and many other aspects of day-to-day operations. This enables rapid and appropriate response to inefficient activities – such as missed appointments, excess on-call staff or declines in staffing ratios – and supports the continuous development of a best-practice approach to care-giving that improves patient service, minimizes risk and keeps operational costs as low as possible.
“We’re just starting out with IBM Cognos Business Intelligence, but it’s clearly a great tool for structured, scheduled reporting and analysis,” comments Golub. “The ability to drill down into reports and get to the root causes of trends in the data itself will be very valuable going forward.”
Complying with healthcare regulations is an ongoing task for VITAS. In the past, audit and compliance questionnaires were managed using spreadsheets, which was a labor-intensive process. Recently, the VITAS team developed a replacement for this process by building an internal compliance system based on its IBM Business Analytics solutions. The new system helps the company’s internal team audit its staff and locations to ensure that they meet all the requirements of federal regulations.
“We used to have a spreadsheet-based questionnaire that the compliance team would fill in as they performed their inspections,” says Golub. “When the questionnaires were completed, the data had to be collated manually to create reports. An even bigger problem was that when the regulations changed, all the questionnaires had to be redesigned, which usually took about three months each year. Now we’ve built a survey system in IBM Cognos TM1 that automatically consolidates the data and produces reports, and it’s so flexible that we’ve reduced the time taken to create a new questionnaire by around 90 percent.”
Giving analysts more time
By reducing the hours spent gathering and sorting operational and financial information, VITAS now has much more time to analyze what the data truly means to its business. For example, VITAS has begun using the solution for healthcare reimbursement management. VITAS can now monitor Medicare payouts and information, as well as revenue and operations, in one view. With up-to-date information at their fingertips, executives can immediately identify trends or anomalies, and quickly make adjustments across their entire business. Whether the audience is internal or external, the graphical capabilities of the IBM Business Analytics technologies make it easy to present timely information. For example, the VITAS executive team can view a scoreboard with graphics that rank different aspects of each location’s performance against a standard. The front-end of IBM Cognos TM1 is so flexible that Golub can create quarterly presentations for the board of directors in Microsoft PowerPoint, with live links back to the original data. The solution reduces by two-thirds the time it takes to compile information and input it into a presentation, saving many hours each month.
The benefits of being able to present information very quickly in an easy-to-understand format cannot be overstated. “We use information generated by our analytics solutions in our presentations to our business partners, industry associations and regulatory agencies. Third parties are in awe of our reports and how quickly we can generate them,” comments Golub.
Supporting cost-effective business growth
Since VITAS first started with IBM Cognos software, the company’s revenues have grown by more than 300 percent. It has expanded from 19 primary locations to 52, and its geographic reach has extended from five states to 18. Yet even with the significant increase in financial data that has accompanied this growth, “we have never hit a wall with IBM Cognos TM1,” Golub points out.
“In years of working with IBM Cognos software, VITAS has never seen a need to do an ROI study – the benefits are that obvious. The justification for the investment is completely apparent. But to give you some idea of how the software has supported the growth of our business, in the past 14 years we have only needed to hire three additional analysts – or 25 percent increase in headcount – despite our revenues increasing by 300 percent over the same period.
He concludes: “Medicare and other regulatory requirements around patient care are constantly increasing, which means that our costs increase too. But with the right use of analytics to help us work smarter and more efficiently, we’ve been able to optimize our operations, maintain very healthy financial performance, and grow our business significantly. If we had not deployed these IBM Business Analytics solutions, we simply would not be able to do the kinds of analysis or handle the volume of data that we use today to assist management in making the business as successful as it is.”
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