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Live from CHIME16: Banner Heath's Prosperous Story on Aligning IT and Business

November 3, 2016
by Rajiv Leventhal
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A business plus IT partnership model has driven increased organizational success at Banner Health

It was a little more than three years ago when Ryan Smith was interviewing for a senior level IT position at Banner Health, the Phoenix, Ariz.-based integrated health system, one of the largest of its kind in the U.S. At that time, Smith said there was one common thread to his 12 different 1-on-1 interviews with the executive leadership team at Banner: the senior executives said that traditionally, the IT department had been difficult to work with, had its own processes, and did its own planning.

As such, Smith, who got the job and is now senior vice president of IT and CIO at Banner Health, knew there had to be  more of an emphasis on aligning business and IT—a pain point across many healthcare organizations today. Smith told the story of how Banner Health has been able to create a business plus IT partnership model that has driven increased organizational success at the College of Healthcare Information Management Executives (CHIME) CIO Fall Forum at the JW Marriott Phoenix Desert Ridge Resort in Phoenix.

Smith’s presentation on Nov. 3 was in front of a packed room of healthcare leader attendees, many of whom face similar challenges as Smith did at Banner. What’s more, Smith noted that when he took the job, he was told that there wasn’t any major merger and acquisition (M&A) activity forthcoming, thus limiting the “craziness” from an IT standpoint for a new CIO. Lo and behold, within 30 days of Smith joining the health system, it closed a deal with a small community hospital, with many more academic medical centers and other hospitals being acquired since then. “It has never stopped; this week alone we announced a joined venture with Aetna, and we also acquired 32 urgent care clinics,” Smith said.

So, the job proved even more challenging than Smith imagined. Here, he pointed to three critical success factors: Banner's operating model; the business/IT partnership; and Banner's planning process. The operating model was the biggest part, Smith said. It consists of a single board of directors that governs all of Banner, meaning attentions and loyalties aren’t split up in different directions. And, there are centralized corporate functions. “It’s designed to achieve results,” Smith said. “The work has changed in healthcare, so taking out unneeded waste and cost was key for us, as well as improving patient and member experiences. There is great alignment at Banner [regarding] how we think about strategies from senior leaders and board members. And with that, comes great opportunity,” he said.

To this end, Smith said it became clear that this organization was driving and leading too many of the technology projects. “Isn't that what we do as IT leaders?” he asked rhetorically. “Not necessarily,” he answered.  “We're a key stakeholder in that process, absolutely, but over the last few years at Banner, we have named a strong business champion who has partnered with an IT champion. We find the right person at the right level to be that dyad partner,” Smith explained, noting how the dyad leadership model is a strong one to solve problems that could be too big for any one individual. He compared the relationship to one Batman and Robin, with the business champion being the one to take the lead. “They are co-responsible for developing and communicating strategies, planning, and strategy execution,” he said. “This dyad model is applied to each major technology initiative.”

Smith added that whatever the case may be, a broader governance is still needed. “So we set up a business-driven IT governance structure in which the business champion typically serves as committee chairperson and the IT champion serves as the co-chair,” Smith explained. “I coach my team to let that business or clinical champion run the meeting, and be the face whenever possible. The dyad oversees the subcommittees, and it's also their responsibility to make sure key stakeholders are participating from the outset,” he said.

Putting the Operating Model into Action

Smith said the dyad model is driven by Banner's overarching operating model, and necessitates consistent, consolidated, and efficient IT services system-wide. As such, this facilitates rapid integration planning and execution processes, and allows for massive leveraging of enterprise technology investments, he said.

“So for the small community hospital we acquired, we don't have to sit down and debate every week and month how much they should look like the rest of Banner,” Smith said. “It doesn't matter what EHR (electronic health record) or network they put in, because at the end of the day, we recognize that our model requires consistency and allows us to be really fast when we think about M&A integration.” Indeed, the model: assumes ALL acquisitions will be rapidly integrated; allows for less time spent on deciding whether or not to integrate; and provides a playbook for executing all phases of IT integration efforts, he said.

The time and resources saved in this approach are invaluable, Smith added. “I don’t have to fight constantly about any organization we acquire; the debate and discussion has already occurred and agreed on up to the board level. That means we need good contracts in place and good licensing agreements, so there is a lot of homework involved. But it also allows us, from an IT perspective, to ‘Bannerize’ acquisitions quickly,” he noted.

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