Deploying EPM in the cloud: 6 steps that drive value

Nine out of 10 large-system healthcare controllers say their health systems plan to strengthen enterprise performance management (EPM) processes within the next three years. One of the biggest opportunities for accelerating value around EPM investments: deploying EPM in the cloud, according to one expert during HFMA’s Large System Controller Council held Sept. 13, 2023.

“Deploying EPM in the cloud offers an ability to onboard new technology acquisitions without having to embed them directly within your source systems from day one,” said Grant Thornton Principal of Technology Modernization Brian Eccher, who has extensive experience in large-scale process technology improvements for companies in North America and Europe. “It’s a practical solution for fitting EPM on top of a complex environment.”

Among the controllers who attended the recent Large System Controller Council meeting, titled “Deploying EPM in the Cloud: Realizing Value and Leveraging Existing Investments,” just 20% would describe their existing EPM approach as “extensive,” with a common vendor supporting multiple processes. Others described their approaches as “limited,” with processes that are primarily Excel-driven, or “individual,” with a variety of products, each covering different processes.

The challenges facing healthcare finance professionals in a rapidly changing environment — from evolving reimbursement methodologies to increasing labor expenses, hospital and health system consolidation and new owners, including private equity-backed firms — demand more sophisticated EPM tools and processes. Eccher pointed to four quick-win opportunities for EPM deployment:

• Automation of account reconciliation
• Management reporting application
• Budget and forecast collection and reporting
• Close calendar/process tracking and workflow — a process that currently sits in Excel documents in most healthcare organizations

For large-system controllers, the ability to automate account reconciliation and apply EPM to close calendar/process tracking and workflow ranked among the opportunities they would activate first. The good news, Eccher says: These are capabilities that can be launched within weeks.

But integrating EPM within existing systems is no easy feat. “It’s a huge process involving a lot of systems, from long-term legacy systems to niche systems that may have been developed to meet a single need,” Eccher said. “It takes extensive integrations to tie all of these pieces together. Fundamentally, this is a high-cost endeavor.”

The business case for cloud-based EPM

Migrating EPM to the cloud helps healthcare organizations avoid expensive technology upgrades by empowering them to access all of their data on a cloud-based platform. From there, health systems can apply analytics and other applications — like the quick-win applications referenced above — to strategically improve efficiency, performance and revenue. Across industries, Gartner estimates that 40% of enterprise workloads will move to the cloud by the end of 2023.

“Cloud EPM is fundamentally designed to unify disparate systems,” Eccher said. “Its robust and flexible data integration capabilities empower health systems to move data efficiently and effectively, with a single interface for accessing data for modeling and analysis. New technology acquisitions can be onboarded onto cloud EPM without major disruptions, providing a single interface for EPM — critical in an era of consolidation.”

Deriving desired value from this approach starts with a comprehensive approach to EPM deployment. Here are six key action steps.

1. Inventory your processes, pain points and value. Is account reconciliation your health system’s primary challenge? Does your organization struggle to gather information for provider productivity metrics? By taking an inventory of where performance management pain points exist, leaders will gain a big-picture view of what their cloud EPM priorities should be and where to focus first. “It offers a blueprint to say, ‘Here’s where we’re going to focus as a team,’” Eccher said.

It’s important to recognize that the effort to implement processes varies. “Do not assume that all require equal effort, Eccher said.

Additionally, all cloud EPM products have varying degrees of functionality that can be released over time. Be sure to understand the prerequisites for implementation — both logical and technical. Assess the upstream dependencies and evaluate the downstream impact.

2. Establish a common language. “Often, clients will say, ‘My starting point is going to be my chart of accounts,’ but it’s important not to be married to what your chart of accounts looks like because this could constrain your efforts,” Eccher said. “We encourage clients to develop what we call an EPM chart of accounts that extends beyond the general ledger and shows the different dimensions of where data is coming from and what levers are available to pull.”

Establishing a common language gives health systems a definition of dimensions that may be sourced from other systems, such as the EHR. It also provides a basis for determining the breadth and depth of data to be contained within the cloud-based EPM.

3. Transform and unify the flow of data. “There is power in being able to unify data within the cloud,” Eccher said. “Health systems must consider: How will we source, transform and bring that data into the EPM solution?”

Cloud-based EPM offers strong capabilities for sourcing, transforming and bringing data into the EPM solution. One tip: Look for data integrations that do not take a high degree of technical complexity to implement.

“We’re not looking to create all this SQL code. Instead, we’re looking for connections and applications that allow us to flexibly and logically bring in and then map data and apply it in a single place. It’s not so much a matter of convenience as it is a differentiator for strengthening performance over the long term.”

4. Take an incremental approach to implementation. “There’s only so much you can implement at once, even if you have all the resources in the world,” Eccher said. “That’s why a walk-jog-run approach is key to success, both in terms of the number of processes implemented and their level of sophistication.”

5. Define and drive upstream changes. “If you don’t define the upstream changes, that just doesn’t set up a good process,” Eccher said. “You’re going to have inconsistent and untimely data; you’re going to have errors; you’re going to be missing data sources.”

While a cloud-based EPM can smooth over some of these issues, it is not a universal fix. Document and communicate the challenges and their impact. Then, work collaboratively with key stakeholders to resolve these issues.

6. Appreciate, pause and iterate. Establish implementation success factors upfront — and celebrate with your team when they are achieved. Be conscious, too, of the need to keep from overwhelming staff with the actions needed to pave the way for cloud EPM deployment. “You can bring in a team of outside people and say, ‘We’re going to do it all at once. We’re going to Big Bang it.’ The reality is, your teams can’t handle that much change,” Eccher said. “Consider how much change that your team can take on at a given period of time. Teams need a break at times from the implementation grind. If you change everything you’re doing at once, the move to cloud EPM will become ineffective.”

Also important: Use breaks from implementation to gather lessons learned that can be incorporated as other aspects of cloud-based EPM are rolled out.

Setting a foundation for success

Cloud-based EPM offers tremendous potential for health systems, but the ability to drive value depends on a thoughtful approach that puts as little pressure as possible on existing resources, both technological and human. By leaning into processes that support a clean and efficient cloud EPM deployment, health systems will gain increased reporting capabilities that strengthen operational performance and their bottom line.

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_{This published piece is provided solely for informational purposes. HFMA does not endorse the published material or warrant or guarantee its accuracy. The statements and opinions by participants are those of the participants and not those of HFMA. References to commercial manufacturers, vendors, products, or services that may appear do not constitute endorsements by HFMA.}