Carolinas HealthCare System

CarolinasHealthCare System

Current situation and issues



One of the key strengths of CHSis the adoption of the EMR system. Using this equipment, the hospitalis in a position to handle a large volume of data concerning itspatients. In the past, the facility did not have this facility, andrecord keeping was a problem. Now that it has the EMR, it canmaximize on it.

Another strength of the facilityis the improved patient care and the services of follow-up afterdischarge. After the adoption of the Affordable Care Act in 2010, itwas clear that CHS would miss in the reimbursement of its costs bythe government if it does not offer quality services. More so, toavoid fines, the hospital had to improve its patient care, andsubsequently, develop the program of follow-up after discharge, whichis now part of its strength.


One of the opportunities for thehospital is the implementation of an effective consumer analyticsprogram. The healthcare system is said to rely on the non-standardbasis in its work. In other words, the healthcare system’s work isnot based on evidence. The issue that the case seeks to highlight isthe absence of patient data analytics which would be essential inenhancing the quality of care and reducing the cost of healthcare(Rodriguez &amp Quelch, 2016). Patient data analytics is a processthat looks at the patient data such as demographic information,financial information, and biographical information to plan on how toprovide the best care. The issues that are affecting the hospital canbe addressed through an effective consumer analytics program atCarolinas Healthcare system.

Another opportunity that thehospital can grab is the digitalization of their research, education,and healthcare services. The US Center for Medicare and MedicaidServices offered incentives for hospitals that adopted electronicmedical records that run up to two million dollars. Whereas the ACAallowed patients to view their data in the EMRs, the healthcaregivers were facing a challenge since they could not model the dataeven if the patients requested for changes in their data. However,Google and Apple were in the frontline in 2014 in making medicalrecords available to patients through their iPhones (Rodriguez &ampQuelch, 2016). The adoption of consumer analytics at the CarolinasHealthcare system would ensure that the healthcare facility adoptsdigitalization of their healthcare services, education, and research.

Additionally, CHS has theopportunity of embracing the enhanced computer powers, which wouldassist the hospital to deal with the problems of nurse shortage. Thecomputers will also assist the facility to handle a large number ofpatients, as well as have a simplified follow-up practice.


A significant weakness faced byDA2is that their limited department capacity cannot meet the demand fortheir analytical services. During the formation of DA2,the analytics team chose to develop both their basic descriptiveanalytics and more advanced predictive and prescriptive modelsin-house rather than outsourcing to an external agency. Comprised ofonly 70 people, the department set out to revolutionize healthcareand improve patient management. However, in 2014 alone, nearly 32million new people entered the healthcare system, vastly increasingDA2’mconsumer market. Shortly after their initial launch date, the teamwas receiving more than twice as many requests as it had the capacityto accept. “We went from having no DA2to people wanting to check their opinion on everything,” commentedLovin. Although the success of the data platform was celebrated, italso meant that the department’s capacity was strained by demandfor their analytical services.

Another significant weakness CHSis facing due to their implementation of a company-wide analyticsplatform is lost revenue due to decreases inpatient hospitaladmissions. Although the ultimate goal of DA2’sconception was to improve the quality of life for patients, this hasperhaps come at the expense of hospital revenue generation. Thereduction in patient admission numbers has been spurred from severaldifferent factors of the CHS healthcare system. (1) In 2013, DA2developed an algorithm that calculated a “readmission risk score’for each admitted patient. CHS hospitals are now able to predict,with nearly 80% accuracy, the likeliness of a patient beingreadmitted within 30 days of being discharged. If a patient isassigned a high-risk score, they are given special attention byhospital staff to ensure readmission does not occur thus reducingadditional hospital revenue. (2) The creation of the Advanced IllnessManagement Group (AIM) was tasked with helping patients with complexmedical condition avoid a hospital stay. The program enlisted thehelp of medical experts who aided patients with illness comprehensionto empower them to manage their own health and reduce unnecessary EDvisits. At the end of the pilot, patients collectively visited thehospital only 33 times in the six months following the start of AIMcompared to 66 visits before AIM implementation. Decreasedhospitalization meant decreased revenue for the hospital. (3) Toincrease consumer access to care, healthcare providers encouragedpatients to visit outpatient facilities or virtual checkups ratherthan seek treatment at hospitals or ED’s. This shift led consumersto seek more convenient and inexpensive healthcare services at smallclinics offered independently or through brand name retailers such asCVS or Wal-Mart. The decrease in patients seeking healthcare athospitals led to a decrease in revenue streams.

An alternate weakness highlightedis the lack of hospital staff comprehension and utilization of DA2analytics platforms. Due to the high levels of experience andknowledge needed to utilize the features of DA2’sanalytical system, many personnel at CHS that needed to work with theplatform were finding it difficult to use. Similarly, many werehaving difficulties reading the guidelines due their complexity andwere thus rejecting the use of the system.


CHSfaces the threat of high costs of healthcare. Many healthcarefacilities such as CHS have always encouraged their patients to seekoutpatient services in a bid to reduce the cost of healthcare. It isclear from the case that the cost of seeking treatment through healthinpatient services or the emergency departments is extremelyexpensive. It has become apparent that 58% of the health costs in theUS are from outpatient services (Rodriguez &amp Quelch, 2016).

Anotherthreat that faces CHS is the threat of new entrants into the market.The new entrants take the advantage of the high healthcare costs tosnatch the patients from CHS. However, this has become an issue forthe healthcare facilities since the patients do not seek servicesfrom their facilities but rather go to new entrants such as CVS andKroger who are said to offer convenient and affordable services.There are numerous walk-in clinics in the US that are coming up andwhich are offering services at a relatively low charges compared tovisits to doctors or a visit to the emergency room



Thepolitical environment at CHS and DA2is focused on the compliance of any rules and regulations set inplace by the U.S. government. Compliance is ensured by the DataGovernance Committee tasked with protecting, managing and determiningCHS’s accountability for the data generated in their dailyoperations. The team meets monthly to discuss (1) the creation ofdata governance policies, (2) prioritize data governance initiatives,(3) define data governance policies, standards, processes, metricsand principles, (4) communicate the vision and activities of thegroup to the broad CHS organization and (5) address the governancestructure, data access and data quality.


Withan annual budget of over $7.7 billion, CHS has become the largestprovider of healthcare in North Carolina. With healthcareexpenditures reaching over $7,600 per capita in the U.S. as of 2012,CHS allocates many of their resources into identifying potentialrevenue opportunities. As a result, Dulin along with his team createda business strategy to calculate ROI’s of potential healthcareinitiatives along with another team that studies cost analytics tomeasure the ROI’s of quality increasing investments. Their goal isto assess which opportunities are worth capital expenditure. Howevermany healthcare facilities such as CHS are encouraging their patientsto seek outpatient services in order to reduce the cost ofhealthcare. Now, 51% of health costs in the U.S. are generated byoutpatient services (Rodriguez &amp Quelch, 2016). These decreasingpatient numbers and reductions in patient readmissions are impactingthe economies of healthcare providers such as CHS due to consumerpreferences of retail brands such as CVS and Walgreens who offerlower prices for similar services. DA2will have to provide additional revenue in order to sustain theireconomic footprint in the healthcare system.


CHS along with DA2places tremendous focus on the positive impact their analyticalsystems can bring to the surrounding communities. In line with theircommitment to public health care improvement, CHS works to providehealthcare services to underserved patients through initiatives suchas mapping underserved communities. In 2009, DA2launched a campaign to reduce unnecessary ED utilization in Charlotteby identifying areas underserved by primary care facilities. CHS alsooffers financial support to patients without insurance or those whoare underinsured, subsidies for Medicare and Medicaid recipients, andfunding for CHS education, behavioral health, and community healthclinics. In 2013, CHS provided medical supplies and equipment tononprofits valued at over $1.5 million, greatly increasing theirsocietal impact.


The U.S. has seen an increasingtrend towards the digitalization of healthcare with the U.S. Centerfor Medicare and Medicaid Services now offering incentives forhospitals that adopt EMR systems. This trend has been evidenced bythe entry of large technology companies such as Google and Appleentering the healthcare industry. With competitors offering featuressuch as access to medical records on patient’s IPhones, it is clearthat CHS must integrate technological systems in order to remain aleading healthcare provider. Previously, CHS lacked an integratedconsumer analytics team decreasing their ability to offerpersonalized healthcare. The adoption of integrated consumeranalytics at CHS will ensure the continuous digitalization of theirhealthcare services, education and research.


CHS and DA2place a high level of importance on recognizing privacy protectionson patient data as well as the restricted sharing of data amongvarious healthcare stakeholders. An example of a legal action towardsthe protection of consumer privacy rights is the Health InsurancePortability and Accountability Act (HIPAA). The act marked theestablishment of the first set of national security andconfidentiality standards for patient health data. Similarly, theU.S. Department of Health and Human Services (HHS) established aprivacy rule to protect individually patient identifiable dataincluding physical or mental health conditions healthcare provided,payments made for health care and demographic information that couldbe used to identify the individual. Healthcare organizations are nowobligated to notify patients of their privacy rights and obtainsigned authorization from patients for any use of individual data.Although this can prove challenging for companies such as DA2looking to aggregate patient data from external sources to createpersonalized healthcare portfolios, those who contravene the HIPAAprivacy rule could be subject to civil and criminal charges and finesof over $1 million.


In conclusion, there are variousproblems that have been identified in the case. The CarolinasHealthcare System is engaged in the development of consumer analyticswhich is a process of collecting data and analyzing patient behaviorin order to make the right decisions regarding service provision andcost reduction. The Affordable Care Act stipulated new regulationswhich have affected the operations of the healthcare institutions. Itis now mandatory for healthcare institutions to offer qualityservices since they can only be reimbursed for outcome and not formere services. The number of patients has also increased as a resultof the ACA while the number of nurses still remains low (Rodriguez &ampQuelch, 2016). Lack of a consumer analytics has affected the qualityof care that is given to the patients at Carolinas Healthcare System.It has been difficult to engage with the patients or even to guidethem on how to improve their health through behavioral changes. It isalso essential to mention that there has been a problem with regardsto sharing of data amongst the various healthcare stakeholders.


Rodriguez, M. &amp Quelch, J. A.(2016). CarolinasHealthcare System: Consumer Analytics.Harvard: Harvard Business School.