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Read and React

December 1, 2008
by Anthony Guerra, Editor-in-Chief
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A souring economic climate calls for a new set of strategic priorities. Are you up to making the adjustment?

About 10 years ago, I read the now well-known book, “Who Moved My Cheese,” by Spencer Johnson. The short parable had a deep message — recognize when your situation is changing and do something about it. A character in the book continually ignores signs that the viability of his situation is deteriorating and, when finally choosing to do something about it, is nonetheless paralyzed by a slavish adherence to existing routine.

I felt like passing out copies at the recently held CHIME conference.

At a gorgeous resort in Henderson, Nev., just 20 miles outside Las Vegas, the industry's CIOs gathered for their State of the Union conference. When I think back, the setting contributed to my perception that alarms were going off which no one could hear (think of the World Economic Forum held in beautiful Davos, Switzerland). Even the few calls to action that were sounded seemed mild, calm, and delivered without urgency.

If it hasn't happened already, ripples from the Wall Street collapse will reach your office door. Soon, your CEO could ask for a 20 percent budget cut. And, before long, he or she will be back with a similar request. A combination of factors — increased unemployment resulting in more uninsured ED visits, more high-deductable plans de-incentivizing preventative care — is shrinking margins. First budget-cutting stop: the IT shop.

In a hospital, the IT department is particularly vulnerable, as the clinical staff is already bare bones. While some advanced organizations see technology as a strategic differentiator, others still see the techies as a huge cost center and prime area for reducing expenses.

But don't wait for the budget-shrinking knock on the door. Proactively preparing your cost-cutting now and delivering it to the CEO will put you in a position of power, as you can strategically slim down with an eye on fattening up in the future. Trimming will also engender a tremendous amount of good will and trust with your CEO, as he or she will know you're running the business efficiently and with an eye to the overall health of the organization.

Being proactive also means turning what appears to be negative into an opportunity for improvement. Use this crisis as an opportunity to become leaner, meaner and more efficient, squeezing every last bit of functionality out of your systems.

Now is also a great time to give your vendors a call and discuss some of the more egregious terms of your software maintenance contract, or see if the price of that system you were considering can be “looked at” again. If you are an organization that is in sound financial shape, I doubt you'll ever find a time when vendors are more accommodating. Speaking of accommodating, give your consultants a call too. You may find they don't argue when you mention that their expense reports have gotten a bit out of hand.

In the current economic climate, three letters matter more than any other: ROI. Go through your capital budget line by line and make sure all your investments have a strong return associated with them, as that will be the salient measure by which expenses are vetted.

The bottom line is somebody moved your cheese. A new business environment is calling for a new type of healthcare CIO. Can you adapt?

Anthony Guerra, Editor-in-Chief
Healthcare Informatics 2008 December;25(12):8