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Part II: Hunkering Down

September 27, 2009
by Daphne Lawrence
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As the deep recession makes access to capital a serious challenge, devising a strategic budget has become a high art. And as initiative after loosely defined initiative comes down from Washington, smart CIOs are devising methods of moving forward in an uncertain, unstable environment.

But it's not one size fits all, by any means.

Though there are many general approaches to strategy in a managing uncertainty, in this part of our cover story we look at four very different CIOs and the specific steps they are taking to fine tune that strategy. These CIOs have already begun to incorporate sweeping changes into their budget process, offering clarity for their CEO and CFO, while allowing the flexibility necessary to react to changing market conditions. In these profiles, we reveal four detailed case studies of exactly how specific CIOs (and institutions) are grappling with change and uncertainty.

Looking for Opportunities

Philip loftus
Philip Loftus

“We face the same challenges as everybody - budgets have been cut, staff has been cut, and paradoxically, we are being asked to do more than ever,” says Philip Loftus, vice president and CIO at Aurora Health Care, a Milwaukee-based system than includes 13 hospitals, more than 100 clinics and more than 110 community pharmacies. In this time of limited resources, he believes IT needs to focus on a smaller number of high-impact projects. As a result, he is laser-focused on safety and patient satisfaction, which have been core strategies at Aurora, instead of the seven or eight projects he might have planned.

“We don't want to throw the strategic plan completely out of the window, so we focus on the critical things and keep those going as long-term goals. But we're recognizing that we need to give a quick business response in ways we had not traditionally done in the past.”

That response meant producing financially measurable short-term returns, so Loftus began looking for projects that could produce fast revenue. “Instead of using IT to reach our long term goals, we're using it to help us improve cash flow and profitability in the immediate next couple years.”

Those projects included: deploying Los Angeles-based Zynx (a clinical decision support system) in all the EDs to achieve better billing and data capture; implementing transcription, which has already delivered a measured savings of over $6 million; and planning to install code-writing software in radiology to improve the accuracy of charge capture and identification, he says.

Ensuring that Aurora meets requirements for HITECH incentives - which, for the organization, should amount to between $40 and $100 million - required a new type of planning as well. Loftus says Aurora decided not to wait for the final definition of meaningful use and certified systems. “With a system of our size, if we really wanted to make any significant changes, (waiting) would put us way behind,” he says. Aurora put a business document together based on its best guess of meaningful use and certified systems, and then developed scenarios around them.

The first scenario under consideration was to qualify all the hospitals and physicians in 2010 and begin receiving incentive payments in 2011. “We decided we couldn't get there that quickly,” he says. “Our goal scenario says if everybody got on board, and we set this as one of the top three business priorities for Aurora as sponsored by the CEO, we probably could get there in 2011 and get the incentives payments in 2112.”

That business document was authored by Loftus and his IT department, with the top 120 managers across the Aurora system as its target. “The critical thing is letting the management know up front that there may be disruptive change, but we're all in this together, and they participated in the decision making.”

(For more information on how Loftus is guiding Aurora Health Care through tough economic times, please read the interview on page 20.)

Forging New Bonds

Helen thompson
Helen Thompson

“The one thing that is absolutely certain about the world we live in is that things are going to change,” says Helen Thompson, CIO at Heartland Health, a 400-bed hospital in St. Joseph, Mo. “We have a seven-year IT strategic plan for the organization. And every single day, as I look at what is going on in the industry, I ask myself, ‘Are we still on the right track?’” As such, Thompson says a CIO must remain agile and flexible, and at Heartland, that agility was focused around fine-tuning the long-term plan for the EMR.

With a robust system already in place, being on track for Thompson meant accelerating inpatient CPOE and physician documentation - especially after the initial meaningful use definition was released. “We pulled them forward a year,” says Thompson. “And we understood that there were some things we might have to forego to do them.”

When the recession hit, with Heartland in the middle of a construction project that hinged on capital funds, tough decisions had to be made. “We took a very careful assessment of the short and long-term impact of stopping - not only to our organization, but also to the community that we live in - and said we have to keep the construction going,” she says.