In Healthcare Finance, The Numbers Alone Are Not Enough

By Pamela J. Gallagher, Founder/CEO, Gallaghers Resulting, LLC
Twitter: @GResulting

Healthcare organizations spend tens of millions on sophisticated data collection and storage, yet it is hard to define what data is worth to an organization. What is its true value? This depends entirely on how the organization uses it. If an organization does not understand how to interpret and make use of their current and historical data, they will not optimize the return on this significant investment.


Numbers mean nothing by themselves. Whether it’s an income statement, community demographics, or COVID hospitalizations, all data receives its meaning only when interpreted in context. This is why people can look at the same set of numbers and come away with two very different conclusions. Without context, data is useless.

For example, many organizations have terabytes upon terabytes of data stored, but when your context is “these unprecedented times,” how valuable is that historical data? You must have an understanding of the situation surrounding the historical data to understand whether and how it can be properly applied to current conditions.

It is also wise to consider the context of the person, team, or organization interpreting the data. Do they have a wide range or many years of experience? Do they have particular expertise to understand the nuances of the numbers they’re reading?


It is natural and right for organizations to desire to avoid past mistakes. One of the ways they venture to do that is through data analysis to pinpoint what went wrong. However, the numbers alone are not enough to prevent repeating history. It takes a deeper level of discernment to avoid both relying on past data too much and ignoring relevant data points. It requires balance.

At times, pointing to the data in our desire to prevent past missteps can keep our organizations from moving forward when we don’t take time to consider what has changed in the meantime. For example, let’s say a certain health care service or initiative launched ten years ago did not work well for an organization. Patient satisfaction scores were lower than the organization’s standard, and the organization saw a dip in revenue. But since that time, circumstances have changed. The population has grown and its social determinants of health have shifted. There’s a greater presence of highly skilled healthcare workforce in the community. There has also been a loss of competition in the market.

When a similar service or initiative comes up for discussion, the organization needs to find a healthy balance in how they handle their data. While the data from the failed attempt a decade ago should play a role in the organization’s decision-making, giving it too much weight could keep the organization from meeting an urgent community need.


Often, a wealth of data can be less than helpful, leading to “paralysis by analysis.” You can analyze the numbers to death, looking at the data from every angle, and still be no closer to knowing how to make use of the numbers or discern where your organization should go next.

Data, though essential to sound decision-making, cannot be the sole driver of an organization. To know how data fits into the larger puzzle, organizations need to have a clear direction that supersedes the data. When you have a vision for who your organization is and the direction it’s going, the data is able to serve as a guide, rather than a master.

This article was originally published on Gallaghers Resulting blog and is republished here with permission.