Every day in health care is different from the one before, and no one knows this better than the Chief Medical Officer. There isn’t a job in health care that is changing faster. The CMO has to ensure the availability of qualified, competent care professionals, oversee changes in the mix of services provided by the hospital and extended system, deal with medical errors and negotiate contracts with medical groups. While the job has always been tough, for the past 50 years it has predominantly dealt with the issues of growth. CMOs learned to ask, “How do we staff the new medical center? Which new care area should be prioritized for capital investment? Can we see two percent more patients next year without increasing staff?”
This is no longer the case. CMS discharges dropped six percent cumulatively between 2005 and 2010, and Milliman projects that admissions per 1,000 patients will drop from 103 in 2011 to 88 in 2021. The CMO is now being asked to reduce costs, specifically from the “variable” side of the cost equation, because fixed costs cannot be reduced quickly enough to deal with the reduction in revenue. Meanwhile, the rest of the hospital leadership team is looking to the CMO to explain how the system is going to deliver higher quality care, avoid Medicare penalties and reduce readmissions.
This is the impetus behind the development of Socrates Analytics. The CMO neither has a suite of tools to establish where costs can be driven out without a reduction in quality nor a clearly established suite of levers to pull to enact change. To help fill this gap, Socrates combines clinical and financial information in a patented model to support efficient care delivery, exposing areas of high fiscal variance while supporting root cause analysis and change tracking. The CMO uses Socrates to create a bridge to the finance team, creating clinically informed financial improvement targets; to engage staff physicians around clinical options with efficiency in mind; and to contract with provider groups, providing a basis for achievable savings goals.
“Socrates supports an environment where the financial implications of clinical decisions are readily apparent. It makes the CMO a real member of the executive team, managing not merely the quality of healthcare delivery, but managing the business of healthcare,” said Dr. Conor Delaney, founder of Socrates.
The idea of providing a patented set of financial tools to the Chief Medical Officer and clinically informed financials to the Chief Financial Officer has established Socrates as a differentiated entity in the marketplace. The venture has attracted over $1.5 million in capital to date and has several national distribution partnerships. Socrates Analytics will present at the Michigan Growth Capital Summit on May 19th. “This is our first time presenting at the MGCS,” said Jim Evans, CEO. “We believe we have a unique story to tell and are looking forward to the networking and engagement opportunities that exist at such a quality forum.”
This guest post was contributed by Jim Evans, CEO of Socrates Analytics. Socrates Analytics is one of 32 companies that will present at the 34th Michigan Growth Capital Symposium next week. Register to attend here, and follow the conversation on Twitter with the hashtag #MGCS2015