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Scottsdale Institute Creates an IT Benchmarking Program

December 9, 2011
by By Mark Hagland
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New tool allows CIOs to effectively compare strategic IT spending

At a time when the meaningful use process under the HITECH Act (the American Recovery and Reinvestment Act/Health Information Technology for Economic and Clinical Health Act) and the emergence of several programs under Accountable Care Act (federal healthcare reform) are compelling hospitals, medical groups, and health systems forward on the IT adoption journey, how does one determine whether one’s organization is spending “too much” or “too little” on clinical IT these days?

That is precisely the question that the leaders at the Scottsdale, Ariz.-based Scottsdale Institute (www.scottsdaleinstitute.org) took on beginning in 2005, when they began to create the SI IT Benchmarking Program. Rather than extracting averages or conclusions from a database, the SI IT Benchmarking Program (which went fully live a couple of years ago, and currently encompasses data from more than 80 hospital organizations nationwide) helps users create normalized data among peer organizations, giving them “apples to apples” spending comparisons. Among other capabilities, the program helps CIOs and other healthcare IT leaders to take into account levels of telephony, health information management development, depreciation, biomedical engineering, and other aspects of spending and investment, so that they can effectively compare what their organizations are spending with what other organizations of their size and type are spending. The program is offered free of charge, and non-member organizations are welcome to participate.

Gordon Roweder, who manages the program for the Scottsdale Institute, says, “The bottom line is that the CIO or other healthcare IT leader can pick a comparison group or cohort for any type of organization, and can include in his or her calculations such elements as their organization’s operating expenses, IT operating expenses, number of staffed beds, number of outpatient locations, and so on.” What’s significant here, Roweder says, is that “We wanted to keep this simple, and gather data points and information that would be important to the users of the program. We don’t want to become HIMSS Analytics,” he adds, referring to the subsidiary of the Chicago-based Healthcare Information and Management Systems Society (HIMSS) that offers a very broad set of diverse services and capabilities.

Not only have Roweder and his colleagues tried to keep things simple, they’ve also worked to make things standard. “We’ve used very standard formulas” to support comparison work in the IT benchmarking program, he says. “We use HFMA’s basic formula for calculating adjusted patient days, for example, and that’s a very basic formula,” he says, referring to the Westchester, Ill.-based Healthcare Financial Management Association. “The bottom line,” he says, “is that you can look at a variety of different elements and adjust for those—for example, whether your hospital includes in its spending totals such elements as disaster recovery spending, spending on PACS [picture archiving and communications systems], and so on.”

And CIOs and other healthcare leaders are reporting strong benefits from using the program. Among those is Brent Snyder, CIO of the 43-hospital Adventist Health System, which is based in Orlando, and which serves patients in 10 states.

Snyder and his colleagues have been using the program since 2009. “In comparing costs with other entities, most of the databases that I’m familiar with don’t identify at a fairly high level what’s actually being supported out of a particular IT budget,” Snyder notes.  As a result, he says, “The information tends to be either too vague or too familiar. And I don’t know who created the initial design parameters at Scottsdale, but what was designed seems to provide a nice middle ground. It segments the participant organizations into relevant groups, so you can see which organizations are at about the same level of clinical IT development as yours, or who are using the same vendors. “

As a result, he says, “You can compare, and can see whether your costs are reasonably in the ballpark with what those of other entities that are your peers are. And that’s been very helpful as I’ve shared it within our company, because it’s shown that yes, our costs have been increasing, but that our cost increases have been right in the ballpark. There are hospitals with higher IT costs than ours,” he adds, “and there are some with lower costs.”

Currently at Adventist, Snyder says, “We’ve just finished deploying CPOE [computerized physician order entry] everywhere except in a few of our hospitals.  So we’ve deployed CPOE, and are deploying closed-loop medication administration.” As a result, he notes, several Adventist hospitals have reached HIMSS Analytics level 6 development, while many others are at level 5. And he expects several Adventist hospitals to achieve level 7 certification sometime during 2012.

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