Gregory Maciag

Healthcare Data Standards

A 2004 introduction to healthcare data standards is available as part of the book Patient Safety: Achieving a New Standard for Care, which you can read online or download as a PDF. The relevant chapter is number 4, which starts, at page 127, like this:

“Data standards are the principal informatics component necessary for information flow through the national health information infrastructure. With common standards, clinical and patient safety systems can share an integrated information infrastructure whereby data are collected and reused for multiple purposes to meet more efficiently the broad scope of data collection and reporting requirements. Common data standards also support effective assimilation of new knowledge into decision support tools, such as an alert of a new drug contraindication, and refinements to the care process.”

This would serve as a template for a description of the role of data standards in any sector. Change the healthcare-specific terms to equivalents in your own domain, and you have the base case for standards.

Healthcare standards have moved on since 2004, but the role of standards remains the same. But how many handbooks on the key topics in other industries feature standards in such a prominent way? If you know of any, let me know.

Meanwhile, the web serves to keep people informed about data standards on a day-to-day basis. Take a look at CommonDataHub (CDH), “the global repository for commonly used data standards such as ISO codes and industry code sets. CDH consolidates data sets from multiple sources, provides additional attributes in some cases, and maps related code sets to provide a complete picture of a subject area”. 

National Academies

Common Data Hub

Cost of Fragmentation

Without standards, you get fragmentation. Fragmentation is a kind of friction. It isolates organizations, and parts of organizations, from each other. It forces people to negotiate unnecessary boundaries. It makes it less easy for people to work together. It stifles innovation. And it erodes quality.

Fragmentation also makes organizations – and entire industries – vulnerable to competition from more coherent rivals. Your competitors don't have to waste time and money on the institutionalized workarounds that compensate for fragmentation. Also, they are connected by default in their constituent elements, their partnerships, and their market access. Fragmented organizations can't even sense the opportunities they are missing – without the cognitive architecture that standards bring, they don't even know their worldview is incomplete.

The value of standards is potentially infinite, so it's debatable whether you should measure it. Measures of standards are important today because we still need to wake people to what they're missing. They need a ballpark for standards value, and that ballpark proves to be billions of dollars.

I believe we're now moving in to a phase where it's more relevant to measure the cost of fragmentation. Decision makers must attack fragmentation, rather than defending standards. We need people to make business cases for the fragmented status quo if they want to keep things that way.

It may actually be easier to measure the cost of fragmentation than the value of standards. Fragmentation is part of the as-is situation. There's lots of data points you can capture. What time does it take to progress this case from open to close? How many instances of rework are there for each type of case? How many local protocols are there for handling common data? How many spreadsheets get passed around?

Fallacies: Standards Are A Cost

Some say: “Standards are a cost.”   Actually, standards are an investment. This is a completely different department. You wouldn't confuse the money you paid for an income-yielding security with what you paid for a new car. Similarly, people ought not to confuse IT as a cost of doing business with standards as an investment in the business.

Here's an analogy. Everybody has to eat, and food costs money. So food is part of the cost of living. But this doesn't mean it's just a cost. You can eat healthily or unhealthily. Certain food choices are like investments. You might even invest in the guidance of a dietitian or a cookbook. This isn't wasted money: it's carefully directed investment. 

We live in the information age, we have to process and store and exchange information. The question is: Do we want to do that in a smart way, or a dumb way? Do we want to maximize the value of our information and our ability to profit from it? Do we want to make sure we'll still be around in the future to continue our business? If so, we need standards. 

Now, you don't invest all your money. You need some of it to live on, and some to enjoy. When you invest, you probably balance the risks you buy into. It's the same with business technology. Most of your budget goes toward keeping the lights on and keeping pace with growing volumes and speeds. Some of it should also go into the no-risk, ultra-high-return vehicle of standards. This is because it's precisely standards that are going to lower your “lights on” and “keep up” costs! Organizations have to run to stand still. Standards do most of the running for you.

Value of Standards

What is it with organizations that don't value data governance? Perhaps they're not asking the right, penetrating questions.

I like these questions, courtesy of IBM's Chris Evans: “Imagine you need to submit financial earnings such as 10Q or a 10K that needs to be filed with the SEC with a decentralized governance model. Do you know how much longer and how difficult this would be? Before these reports can be consolidated for submission, you would need to ask the simple questions about the data such as what does it mean? Does it mean the same thing for all business units or just for a few? What are the translation rules to get everything consolidated so that they can mean the same thing?”

When you use data standards, these questions evaporate. Evans is polite in referring to the “decentralized governance model” for a situation we might equally call “data anarchy”. The only way organizations get away with anarchy is by not asking these types of question.

Evans has another question:  “While companies are now becoming global companies, data needs to be more synchronized and to start, data needs standards, but at what level?” Organizations in the insurance domain have a ready answer, thanks to the investment made by the community in the ACORD standards.   IBM

ACORD Standards Save BILLIONS

PEARL RIVER, NY October 25, 2012 – During the 2012 ACORD Implementation Forum in Ft. Lauderdale, Florida, Douglas Hubbard, President of Hubbard Decision Research and author of the business best-seller "How to Measure Anything: Finding the Value of Intangibles in Business", announced that implementing ACORD Standards can save the insurance industry at least one billion dollars

Hubbard researched ACORD member companies who actively implement Standards, and revealed his findings as part of the Value to Members Project, an initiative designed to help businesses understand the value of working with ACORD Standards. "Small efficient improvements can add up to a lot. I think this research is an example of that. ACORD simplifies processes for the entire industry. There's value in that and we can prove that," said Hubbard.

Doug Hubbard's research proves one of the founding principles of ACORD; that working with us is worth the investment because it saves money and increases efficiency, not only for individual companies but for the entire industry," said Gregory A. Maciag, ACORD President and CEO. "Our members have known this for a long time and it's great to have their belief in our standards validated."

Hubbard and his team will continue to measure the value of ACORD implementation and will make his research available to all ACORD members. "This just makes sense. Projects that have Standards at their core are more efficient, and we've only just begun to calculate their true value. I think the value of ACORD Standards will continue to grow," Hubbard concluded. For more information about ACORD Standards and the Value to Members research, visit the ACORD website at www.acord.org.

Metrics for Independent Agents

Jeff Yates from ACT  says, I believe ACT’s October article, “Grow Your Agency & improve Your Marketing by Tracking Key Metrics,” is important reading for every independent agent.  Chuck Blondino, Safeco Insurance, studied the differences between high growth agencies in his territory and those which were not growing or growing only marginally.  He determined that a key differentiator for the high growth agencies is that they tracked and acted upon key metrics relating to the origins of their business, close ratios, revenue and policies per client, retention and average client tenure.  Based upon his research, the author outlines the twelve key metrics agencies should track to maximize their marketing and sales efforts, as well as how to generate them.   Chuck makes a very convincing case that an agency can’t optimize its growth, if it doesn’t have the facts as to where its business is coming from and which marketing efforts and referral sources are generating the highest return.  Download Key Agency Metrics

 

Invisible Cost - Let's Measure It!

Karen Monks at Celent likens insurers' closed blocks to nuclear waste. She believes many organizations are delaying dealing with the problem, despite the cost of doing nothing being very high.

The cost of doing nothing is maybe the most deadly type of economic friction known to humankind. You can't see it, touch it, hear it or smell it. Yet it poisons your future.

How can we make doing-nothing costs more visible? Maybe organizations should install prominent counters that show, in real time, the value being needlessly lost by zombie lines of business. While they're at it, they could install some dials showing the second-by-second losses accruing from ill-fitting processes, misaligned interfaces and proprietary standards. 

In mid-towm New York City, there is a national debt counter that has been climbing for many years. Few pay attention to it.  I suppose they can't see relevance to their personal situation, unlike other nations in the news today.  ACORD is working on metrics to assist members when planning for using industry standards.  But maybe we should try to measure the cost of doing nothing instead.  Celent

Standards Value

“[Carol] Rozwell [research vice president, life sciences, Gartner] recently used Gartner models and her own estimates to calculate what process improvements and data standards might save the industry: $5.8 to $6.6 billion annually. That is the entire R&D budget of a large pharma.”

I'll let those numbers speak for themselves. But note how process improvements and data standards go together hand-in-glove in Rozwell's prescription. You need to change the way you do things, and you need standards, and you need standards to change the way you do things.

Gartner on IT Trends

Beans Count

You'll have heard the saying, “If it doesn't get measured, it doesn't get managed”. But you may not have heard it recently, and if you have, it might have been delivered in an ironic tone. Metrics-obsessed management is associated with an uptight, wood-for-the-trees mentality. Measurement calls to mind “scientific management”, time-and-motion studies, behemoth organizations operating in long-gone environment where little changed year after year.

It's true that business saw an injection of creativity in management practices once the baby boomers took over the big desks. And people who stick to a measurement-driven approach get labeled as bean counters. However, my thesis is that we need bean counters because beans count. There's more to management than measurement – but measurement runs through management like connective tissue.

The things we care about in business are often abstract qualities: benefit, quality, risk. Yet unless we turn these abstract notions into concrete measurables, we can't tell whether or not we're achieving them, or how much they're costing us. The insurance industry is built on the reduction of risk to credible variables. For countries with socialised healthcare, measures of quality-of-life must be used to decide on treatment priorities. While it can be misleading and offensive to seek dollar values for abstract qualities, we do need to apply some kind of measurement system.

Business measures don't have to be designed with absolute scales. You can apply measurement – and thereby management rigor – to any area of activity with a small set of relative indicators. This is why our opinions as consumers are queried by categories such as “strongly agree”. How do we know if our customer service is getting better, for example? A simple start is to ask customers whether they'd rate their just-completed encounter as better than, worse than or the same as their last encounter with our organization.

If we're not measuring, we're not managing. I'll come back to the dangers of measuring the wrong things in another post.

How To Measure Anything

Check this book out. Doug Hubbard writes about measuring anything.  How often do we say that something cannot be measured. It's a myth. We measure consumer confidence. bulls, bears and customer satisfaction. Everything is measurable as long as you understand the context. 

I am eager to focus on metrics in two ways.  How do we measure the industry impact of using ACORD Standards.  And how do developers measure the ROI of industry standards baked into their products.

Now you might think that its like measuring the value of the telephone or social media or language for that matter.  Silly huh.  Do we need to actually cost justify the use of standard communications protocols?  I think not.  Yet because our legacy infrastructure is repleat with a patchwork of band aid solutions to share data, there is a tendency to under-appreciate the real value of industry standards.  And the cost associated with proprietary fixes tend to be hidden throughout the process and viewed as a cost of doing business,

To be fair, we do have a ways to go before ACORD Standards become a de facto ingredient in all insurance software development.  I'll talk more about this later, but it involves making standards less complex for developers to bake into their projects.  So in the mean time, demonstrating value in terms that the average executive can appreciate makes sense.

I think metrics will help some to overcome barriers to implementation. More importantly, I think it will move the conversation away from measuring the investment in standards to meaarung the cost of doing business without them. Executives may not understand ACORD standards, but they do understand what throwing money out the window looks like. So giving them a lens to identify the total cost associated with not using standards will be a good thing. How To Measure Anything