In return, those healthcare entities that use IT to fix ingrained problems can reach into a $50 billion pot over the next five years, starting with $19 billion available in 2011. Laggards who don't install effective IT will face daunting financial penalties come 2015, in the form of a 1 percent cut in Medicare payouts. That escalates to a 3 percent cut by 2017. While they spend, hire and try to anticipate what standards Obama will devise to qualify for stimulus funds, healthcare CIOs must also fend off vendors with dollar signs flashing in their eyes.
"We're getting cold calls from every electronic medical record vendor out there," says Paul Contino, vice president of IT at Mount Sinai Medical Center. Among vendors and consultants, he adds, "it's a feeding frenzy." Even Wal-Mart is in the fray, offering a $25,000 bundle of eClinicalWorks software on Dell hardware at Sam's Club warehouses.
We're willing to bet most CIOs don't procure their IT at Sam's Club, but there's plenty else to make you wary. Many products are immature, and the intended users of these new systems range from eager to inexperienced to entrenched in the way they've nursed and doctored for decades.
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Yet healthcare CIOs are busy growing strong C-level partnerships for their digital efforts, even amid these conditions of pressing deadlines, uncharted financial risks and rabid vendors angling for a piece of the action. The rest of the CIO community can steal some good ideas from their healthcare colleagues as they obtain project buy-in from business executives and set the kind of aggressive goals a whole company can rally behind.
The Ghost of ERP Failures Past
Final, precise criteria for what healthcare CIOs have to do to obtain stimulus money won't be out until the end of this year. But if they hope to make Obama's deadlines, CIOs must push ahead with core systems such as electronic medical records (EMRs). As a result, healthcare IT operating budgets are up 4.7 percent this year compared with those of 2008, according to a survey of 200 IT executives by research firm Computer Economics. In comparison, across other industries, the numbers are flat. Healthcare hiring has jumped, too. While 46 percent of IT organizations overall have cut staff this year, 27 percent of healthcare organizations are adding technology positions.
The IT offerings in the e-health realm today are about where enterprise resource planning was in the early 1990s: many sellers, lofty promises and staggering amounts of money being spent. An EMR, which mainly digitizes patient records, is the centerpiece. But transforming a hospital to meet Obama's vision will require many more pieces to be integrated-tracking prescriptions electronically, computerizing physician orders, digitizing, storing and retrieving lab results and images. The complicated list goes on and on.
If done right, a healthcare organization can go nearly paperless, with real-time access to all patient information, generating treatment plans based on detailed analysis of aggregated data about what worked in the past and what didn't-all to produce better patient outcomes. The business mission, if you will, would morph from treating the sick to "spreading health," as Kaiser Permanente CIO Phil Fasano puts it. That's a vital strategic shift. (See " " ) In trying to achieve it, though, "a lot of people will try to do too much, too soon and fail," predicts Money Atwal, CIO and CFO of Hawaii's Hilo Medical Center. Atwal recalls with a shudder the way IT leaders rushed huge ERP systems into place when the technology was untried and lacked C-suite commitment.
Smart CIOs will recognize this period as a time to pivot from being someone who automates existing processes to someone who makes possible new business models, adds Mount Sinai's Contino. Success, he says, "isn't in the technology. It's the management."
Frustrating the CEO
Virtua Health, a $1 billion hospital group in Marlton, N.J., has used medical software from GE Healthcare and Siemens (among others) for many years. But CEO Richard Miller was frustrated that no single hospital process was electronic from start to finish. For example, nurses could start an electronic medical record for a new patient, but doctors continued to write treatment orders on paper.
"As CEO, I got tired of hearing we're using 20 percent of the functionality of a system," Miller says. Part of the problem was outdated methods of working and a stubborn resistance to change, says Ninfa Saunders, Virtua's chief operating officer. Miller, Saunders and other Virtua executives decided they wanted to remake their hospital into a world-class venue for specific areas of care such as women's health and cardiovascular cases. "We said, 'We don't want to be average anymore,'" Miller notes.
Virtua launched electronic medical records in 2006 and set out to use as many features as possible in its selected products (GE's Centricity PACS, Microsoft's Amalga , and Siemens Healthcare's Soarian). Last year, Miller hired Al Campanella as CIO from consulting firm Deloitte Consulting.
The whole project will cost $125 million, Miller says. The work is mapped out through 2011, with a new "nearly" paperless hospital to open that year. Before spending any money on software, however, Virtua managers from the CEO down used Six Sigma and Lean management techniques to figure out where to start, how to prioritize the work and what organizational and technology skills were needed.
Together, senior executives worked with other technology and medical staff to create maps of all major (and many minor) processes the hospital typically undertook. An outsider can't begin to decipher the maps depicting the project, packed as they are with multiple ovals, rectangles, squares and colored arrows zinging between the shapes. But Virtua staff found, for example, that more than 1,000 paper forms were used in clinical processes. Reforming the workflow and adding technology reduced the number to 200 forms, all of which will be electronic in a new clinical information system.
"Putting IT on top of a fragmented process doesn't solve anything," Miller adds. "Doing flow-charting underneath IT-that's the winner."
Virtua includes a clause in its contracts that says vendors must help with process mapping before any new software is rolled out.
In addition to the C-suite involvement with the IT project managers, a group of clinicians makes sure that the development meets specifications. Miller, Saunders and Campanella all attend monthly Six Sigma update meetings. That commitment is nonnegotiable, says Miller. The meetings are "not something we delegate to other people. We're there."
Competing for Customers
They may not hold "buy one, get one free" sales, but like any other business, hospitals compete for customers. Unlike other industries, health care lags in using IT for efficiency, never mind competitive advantage. For example, just 1.5 percent of hospitals in the United States use comprehensive electronic medical records, according to Kaiser's Fasano. "It's a manual, disconnected industry," he says.
Yet we know automation attracts customers. Sixty-two percent of 1,000 consumers polled by NCR said they are more likely to choose a hospital that lets them pay bills, fill out forms or schedule appointments online. Yes, NCR sells kiosks to medical organizations and no doubt cites those numbers during every sales call. But survey results show that people really want more technology in their healthcare interactions: Fifty-three percent want to book appointments via their mobile devices. Yet opening up a doctor's calendar to patients carrying iPhones isn't what Obama is talking about. That won't get you to the "meaningful use" of technology that the stimulus money requires.
So far, the federal group in charge of laying out the requirements has said that hospitals must use an EMR for jobs such as tracking medications, accessing lab test results and recording patient care progress. At doctors' offices, computerized physician order entry systems must replace paper notes, while at hospitals, at least 10 percent of doctors' orders must go through that kind of electronic system. Insurance claims must be from an office, clinic or hospital. IT definitely has the ear of C-level health care executives, says John Stanley, SVP and CIO of Riverside Health System in Newport News, Va. The question is how to bend it.
Riverside started automating physician-office-based patient records 13 years ago, but the stimulus incentives have "put some more urgency into our journey," Stanley says. He runs two different electronic medical records systems. The principal user is Riverside Medical Group, a multispecialty group of close to 400 practitioners scattered over multiple market areas. Many physicians currently utilize CPOE and electronic prescribing capabilities. They also have an electronic record system in their Acute Care division, and the two systems exchange information. CPOE is currently being implemented across the various hospitals, starting with the hospitalists.
These sorts of technology projects are winning out over other business projects to get capital and the OK to hire, he says, estimating that the hospital will receive $20 million, subject to final regulations, from 2011 to 2015-a goodly sum for a nonprofit.
But for those who haven't begun automating, 2011 is going to come fast, says Aurelia Boyer, CIO of New York Presbyterian, a $3 billion, 2,200-bed healthcare provider.
"We started on this path way before Obama was elected," says Boyer, who is a registered nurse with an MBA. "If you haven't even started, you can't make it." She says her hospital could spend "tens of millions of dollars" when all is said and done. New York Presbyterian recently finished a Web portal based on Microsoft's HealthVault, where patients can access their health records, request appointments and pay bills. Crucial to opening up hospital data to patient access was the support of her C-level peers, she says. It's a major change in mind-set to unlock formerly sequestered, heavily guarded information that many care-givers consider their private domain. That change has to flow from the top, she explains, if staff are to accept new processes and the technology that supports them. "We believe this is the patient's data."
Steadfast Through Rough Patches
Steady confidence from top executives becomes crucial when projects stall. Mount Sinai had expected to be a leader in smart-card use by now, having started a project five years ago to give patients chip-based plastic cards to hold their medical and demographic data. But Mount Sinai's smart-card provider decided to get out of that business.
Matching medical records with the right patients-regardless of whether they are computerized-is an ever-present problem. That's especially true in a big city like New York where many people have the same or similar names, explains Contino, who is also chairman of the Smart Card Alliance Healthcare Council.
Large healthcare systems often duplicate records, too, by starting a new one for a given patient when the system is down or there's an emergency and no time to call up an archived file. These medical-record errors are "an insidious problem that most hospitals don't talk about," he says. If patients came in with unique, secured smart cards in their wallets, at least some of the problems would be eliminated.
But the work came to a halt about three years in when the vendor and development partner, which Contino declines to name, changed its business plan and stopped selling smart cards. Over the past 18 months, Mount Sinai has partnered with TrustBearer Labs, Giesecke & Devrient and Extension to restart the project.
During this "extremely frustrating" hiatus, executive support didn't waver, Contino notes. About 10,000 Mount Sinai patients have a card now; the goal is to reach 100,000 in the next couple of years. C-suite meetings to talk about technology continue, and a committee of technology and business managers meets every week to discuss progress on meeting the requirements of the stimulus package.
Mind the (Maintenance and Support) Gap
Incentive money to get moving is one thing. But the federal government is not offering money to maintain and upgrade EMRs and other e-health applications into the future. Some CIOs worry about where cash-strapped hospitals will get the money for maintenance. How supportive will fellow executives be in the future as ongoing costs mount? And once automation starts, it only gets more complicated, says Frank Sottile, chief medical officer at Crittenton Hospital Medical Center in Rochester, Mich.
In 2003, when Crittenton started implementing the Millennium electronic medical record from Cerner, the hospital ran 28 applications. Next year, it will have more than 90 being managed for it by CareTech Solutions, an outsourcer to which the hospital sent its entire IT department in 2003.
"With what we've invested in IT, the board expects us to receive every dollar of the stimulus available to us," says Sottile, who oversees IT. Will the $5 million to $6 million Crittenton estimates it will receive in 2011 cover its IT investment? "Oh no. No, no, no," he says. However, he declines to say how much has been spent.
Some CIOs frankly doubt there's any direct monetary savings from automating any part of health care. Digitizing radiology, for example, may save money on film. But Sottile points out that the money is absorbed by the costs to set up high-bandwidth networks to carry X-rays and CT scans around the hospital campus as well as store them in sophisticated archiving systems to allow quick retrieval of old images.
"Seeing financial ROI, that would be like putting Jello on the wall," adds Saunders, the Virtua COO. A more attainable goal, healthcare CIOs agree, is realizing lower costs down the line as automation and data analysis shine a light on more efficient ways to care for patients, and as the hospital begins to move patients more quickly through the system and provide higher-quality care. Faster turnover in the beds, with fewer patients returning with complications, yields savings overall.
Follow the Data, Find the Payoff
To really get some meaning out of the data these applications collect and store, healthcare organizations should use business intelligence tools to analyze scenarios and produce evidence of the best methods of care for specific maladies, says Bill McQuaid, CIO of Parkview Adventist Medical Center.
A decade ago, Parkview didn't even have e-mail. Now it has a full EMR, bar-coded medication dispensing, e-prescribing and fingerprint sign-on for clinical staff. This spring, the organization achieved a best-practice Stage 6 in the Healthcare Information and Management Systems Society's seven-stage rating of EMR use.
Through advanced clinical committees, Parkview updates and improves clinical applications to provide better functionality for users and enhanced care for patients. This evidence-based medicine wouldn't be possible without integrating its computerized systems and using BI to analyze the data, McQuaid says.
In 2011, Parkview may be eligible for up to $700,000 in stimulus funds for implementing an EMR in the practices of its affiliated physicians, he says. For the use of EMR and other technology at the hospital itself, he says, "it could be millions." That's an impressive amount for a 55-bed hospital in southern Maine.
Yet despite the best planning and the tightest working relationships between key executives, some observers expect failures along the way. Obama himself admits that none of this will be easy, even with the stimulus package funding in hand. "There will be some slippage along the way," the president says. "There will be hazards and reverses."
In the meantime, there's a lot of chatter online and at healthcare IT conferences about what "meaningful use" means, and there have been plenty of complaints about unclear definitions to date.
Virtua CEO Miller predicts a wave of collaboration among hospitals because many lack the money to put in the software needed to comply with Obama's demands. No one wants to start incurring the penalties that begin in 2015.
"They will be looking for partners," Miller says, "because they won't be able to implement or afford this."
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