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KPMG Leader: “The Healthcare CIO is in a Very Tough Spot”

January 13, 2017
by Rajiv Leventhal
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A recent survey reveals noteworthy findings about healthcare CIO budgets and strategic visions

Last fall, findings from a Harvey Nash/KPMG CIO survey across various industries revealed that more than half of healthcare CIOs anticipate increases in IT budgets in the year ahead, though these same patient care organization leaders reported they also face significant skill gaps in data and analytics, project management and change management.

As Healthcare Informatics Assistant Editor Heather Landi reported in November, the Harvey Nash/KPMG CIO survey consisted of 3,400 CIO respondents across a number of industries and in 82 countries. The healthcare industry sector snapshot provides survey responses from 190 healthcare industry CIOs. The findings indicated that healthcare IT budget growth is outpacing other sectors. “In addition to the 52 percent of healthcare CIOs who see increases in IT budgets in the next year, 35 percent expect unchanged budgets, and this compares with 45 percent of CIOs across all industries anticipating an increase in IT budgets and 33 percent expecting IT budgets to remain unchanged,” Landi reported.

Nonetheless, it’s noteworthy that although 80 percent of healthcare CIOs said they see a growing strategic role in their organization, just one-third of healthcare companies reported having an enterprise-wide digital business strategy and vision. The survey also revealed that the healthcare sector lagged industry averages in key technology skills. Healthcare companies face the greatest skills shortages in big data/analytics, project management, change management and security and resilience. And, healthcare CIOs reported greater skills gaps in these areas compared to the all-industries average, Landi reported.

“Despite significant increases in IT spending in recent years, the maturity of IT investment in healthcare is still lagging versus other industries and healthcare companies know they need to catch up,” Vince Vickers, KPMG LLP’s healthcare technology leader, said in a statement with the release of the survey. “Healthcare organizations have significant operational cost pressures now more than ever, and there is an opportunity to close that gap quickly with disruptive technologies and analytic tools that open the door to the notion of the ‘creative CIO.’”

To dive deeper, Vickers recently spoke with Healthcare Informatics Managing Editor Rajiv Leventhal about the report’s findings, what the biggest takeaways were and how CIOs’ operations and processes will change moving forward. Below are excerpts of that interview.

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This survey featured thoughts from a lot of CIOs across all industries, with nearly 200 just from healthcare. The slight majority of healthcare CIOs see increases coming in their IT budgets. What were your takeaways from this?

I don’t think anything from this survey is too surprising. Having data is obviously helpful to validate the anecdotal stuff you hear every day. I meet with two to three CIOs every week, so it’s good to get the formal data to validate your thoughts. While Harvey Nash and the survey has been great for us, that pool of healthcare [they use] is pretty far reaching, so keep in mind that it’s not just providers or payers—converged life sciences fall into it, too. We are going to be much more targeted on the provider side going forward by taking a subset of this survey and playing that back via our CHIME relationship, who we do surveys with every year. If we get half of CHIME participants to respond, so 200 or 300 healthcare provider organization CIOs, it will be very interesting to see that data.

For the CIOs planning budget increases, where will they be directed? What are the biggest areas of need?

This is more anecdotal; this specific questions we have are what we are asking CHIME to validate. So this is more of my gut feeling before we get these survey results, but cybersecurity is huge right now and we expect that trend to continue. Everything around the cloud is big; I am really finding it interesting how much activity we have now with assessments and road mapping around cloud application work. It seems like we have a group that has gone out and spent a ton of money, effort and energy on their EHRs, and there certainly is an ongoing optimization exercise occurring there, and because the cost pressures continue to mount, [folks] have pivoted. They are challenging themselves to figure out how to move to a cloud-based app that reduces support spend and also helps continue to get value out of relationship with the software vendor with “regular automated updates” as opposed to large expensive upgrades. I find it interesting that just 18 months ago, we would have CIOs and CFOs with strong objections to the cloud due to security, but because of the cost pressures now, they are looking very seriously at it. This is a very active marketplace for us and I expect this CIO survey to validate that.

Vince Vickers

How can one resolve, or at least mitigate, the concern over security when at the same time move to the cloud?

We have a great cybersecurity team at KPMG, and often when I bring them in, the discussion gets moved over and deferred to the security officer, or whoever is head of security for the healthcare organization, and their first question usually is, “How can someone be more secure than what I am dealing with internally?” If we are talking about organizations like Amazon, Oracle and Microsoft, those who have been living in this space now for many years, what is it that makes you think as a regional health provider, you are more secure, you have more advanced protocols than them, and you have the ability to hack proof your system better than them? They do this for a living, remember. We have candid conversations once this happens, and quickly move away from that being an objection. The cloud isn’t free of security issues, but the issue is patient care and helping your customer, and these organizations wake up every day thinking about how to secure your data, so you might want to admit they will do a better job with that than you will by yourself.

This survey also revealed that the healthcare sector lagged in key technology skills such as data analytics and security, compared to other industries. What do you make of this?

I think there are multiple parts to this, and I am seeing a change that’s exciting in regard to healthcare having been a laggard in IT spending relative to other major industries [but not as behind anymore]. If your IT budget, with respect to your revenue, is hovering around 1 percent—versus financial services which is around 8 percent—you are not going to get the highest quality and best people, generally speaking. That is obvious. But we have made great progress, and I’m looking forward to more change here.

Another thing that’s new in the last 12 months is that there is a lot of out-of-industry hiring going on for IT, and embracing new ideas and non-industry expertise. You might not see that as much at the community hospital system or regional health system, but when you move upstream to bigger health systems—the innovators and leaders—while, yes there are nuances specific to healthcare, the days of me interviewing someone and requiring they have 25 years of healthcare experience on their resume are over. We want fresh skills, new thought processes, and people who can bring innovation seen in other industries to healthcare.

Keep in mind, this is all relative in terms of progress; it’s not shifting overnight. Ninety-nine percent of the professionals at the past CHIME Fall Forum have been in the healthcare space for decades. Anecdotally, I can talk about a number of health systems that have brought in CIO leadership outside of the industry. Two things are happening: you have business professionals wanting out-of-industry innovation, but you also have a skill gap that exists. How many of these people can you actually find at an application support level that have the experience? By default, you almost have to embrace outside-of-industry support. Even 18 months ago, I rarely saw people embracing this.

With all this in mind, how much added pressure is being put on CIOs?

The CIO is a really tough spot to be in right now; they are a nucleus of the change that’s going on in healthcare. Whether it be the forced movement towards EHRs and the pressure that came with that, or the need to reduce operational costs and spending, so further automating—they are in the crosshairs of all that. CHIME is a good support network out there for these folks. Financial services and retail have made massive shifts from some variation of what healthcare is going through. At one time they were very paper-based, and their business has had to shift away from clerks at banks and brick and mortar mall-based activity to an internet-based sales model. How do we take that and leverage those people for healthcare? It’s about expanding the base for who the candidates are to support it.


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The Modern Healthcare CIO, CMO, and CTO

December 10, 2018
by Lori Williams, Industry Voice, vice president of fulfillment, Gigster
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Disruption in the healthcare space comes primarily from the expansion of data’s role in the industry, and the healthcare C-suite’s familiarity with that expansion will help drive company and industry success

For the healthcare C-suite executive, the industry has never been more complex—nor has it ever contained so much potential. Emerging technologies mixed with political uncertainty has created an environment where incredible amounts of healthcare data are revolutionizing how patient care is handled, but patients remain uncertain about the future of their own health. With better data and the means to draw insights from it, healthcare CIOs, CMOs and CTOs are in a position to help address patients’ uncertainties and make hospitals and clinics more accessible and effective than ever before.

Here’s a look at how the role of the modern healthcare CIO, CMO and CTO is changing:

The Modern Healthcare CIO
The modern healthcare CIO’s role has evolved to become more innovative. No longer a title reserved strictly for engineers and IT professionals, today’s healthcare CIOs are focused on information science instead of simply setting up network infrastructure or providing back-end support. The trend towards a more data-centric role began as hospitals rolled out electronic health records, equipping individuals with better access to healthcare provider data. Through enterprise data warehousing, CIOs are becoming masters of data management, governance and predictive analytics, and passing along the many benefits of those knowledge bases to patients.

The Modern Healthcare CMO
The confusing healthcare landscape makes the role of a healthcare CMO more necessary than ever before. Thanks to ongoing regulatory changes, uncertainty surrounding the Affordable Care Act, and shifting consumer expectations for on-demand services, healthcare CMOs are responsible for helping patients navigate their way through a complex and opaque industry. As patients continue to assume the role of consumers, carrying out comparison shopping as they would for any other industry, CMOs must be adept in crafting a healthcare provider’s brand and messaging.

At the same time, CMOs must also ensure that healthcare providers offer a modern online experience, ensuring websites are mobile-optimized and social media accounts are generating engagement. This also means CMOs need to help move marketing efforts into the 21st century, transitioning away from direct mail or billboards towards digital marketing and CRM tools. Because if they don’t, there are plenty of med tech startups that will promptly eat into their market share.

The Modern Healthcare CTO
Unlike healthcare CTOs of the past who remained siloed off from the rest of the organization, today’s modern healthcare CTO is fully engaged with healthcare providers and their technology stacks, utilizing new software and hardware to improve daily workflows. The CTO is enabling the transition to patient-oriented self-service operations, enabling patients to carry out administrative tasks like scheduling appointments or refilling prescriptions over the internet. Because medical data is often stored in a variety of different sources, it’s critical for the CTO to be able to keep these systems interoperable with one another. For hospitals riddled with legacy software, CTOs should expect to continue employing middleware solutions to bridge the gap between old and new.

Members of the healthcare industry C-suite have the power to transform lives, and the CIO, CMO and CTO have roles that directly affect a provider’s ability to carry out positive change. With better data from the CTO’s tech stack, the CIO can use better analytics to help providers determine the best solutions for their patients, marketed to consumers by the CMO through modern platforms in clear, easy-to-understand language.

Lori Williams currently serves as Gigster’s vice president of fulfillment. Prior to joining Gigster, Lori was the general manager for Appririo.


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What Does Your Magnum Opus Look Like? A Few Operatic Thoughts

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I was given the privilege and pleasure recently of presenting, for the second year in a row, a lecture on Richard Wagner’s “Ring” cycle, as the leading opera company in my city, a world-class opera house, has been putting on, in yearly succession, the four operas of the “Ring of the Nibelung” cycle by German composer Richard Wagner (1813-1883). Last year, the second opera in the tetratology, “Die Walküre,” was performed; this year, the third opera, “Siegfried.” After the concluding opera, “Götterdämmerung,” is performed, the entire cycle will be presented in festival format, always a major cultural event. I spoke on “Siegfried.”

I’ve been fortunate to have seen six complete “Ring” cycles in live opera houses in different cities, and I can tell you, it’s a life-changing experience, as this four-opera work (16 hours of music altogether), sits at the absolute summit of western art. Richard Wagner was a hideous human being himself, but spent numerous years working on something that changed the course of classical music and redefined opera.

What’s more, from the summer of 1848, when Wagner wrote a first sketch of the libretti, or texts, of the operas, until their true compositional completion in 1871, more than 23 years were to pass; and it would be another five years before the tetralogy was fully presented, in a purpose-built new opera house in the Bavarian town of Bayreuth. It was a herculean feat to create the entire text of these four long operas, and compose 16 hours of music that would completely redefine the concept of opera. Indeed, when the crowned heads of Europe, the great living composers, and the 19th-century European intelligentsia and glitterati, gathered at the new Festspielhaus in Bayreuth in 1876, many were so overwhelmed by what they saw and heard, that they were rendered speechless. Even now, 142 years later, first time Ring-goers are overwhelmed by the breadth and sweep, the musical and dramatic audacity, and uniqueness of the “Ring” operas, with their story of gods, giants, dwarves, flying Valkyries, Rhinemaidens, one huge dragon, humans, gold mined from a river, magic swords and spears, and of course, a gold ring whose possessor can control the world and its fate.

Even just looking at the third opera, “Siegfried,” Wagner struggled mightily. For one thing, being essentially a grifter and a cad, Wagner borrowed/took money from everyone who would lend/give it, and often had affairs with the wives of the patrons bankrolling his compositional work, leaving his life in constant chaos, as he fled from one city to the next. One such wife, Mathilde Wesendonck, inspired the opera “Tristan und Isolde,” groundbreaking operas that Wagner wrote during a 12-year hiatus in his composition of “Siegfried.” And “Tristan” itself changed the entirety of classical music, its tonality-challenging chromaticism.

Well, no one is expecting anyone to match the unique creativity of Wagner’s “Ring” cycle. But the leaders of U.S. patient care organizations are doing a lot of important things these days, including using formal continuous improvement methodologies to rework core patient care delivery processes in order to transition into value-based healthcare. What’s more, as our Special Report on Leadership outlines, the entire role of the CIO is being rethought now, as the demands for leadership and strategic capabilities are catapulting that role forward; and patient care organizations are beginning to make real headway in advancing equality for women and people of color among the ranks of healthcare IT leaders and managers.

So while no one is expecting anyone to create an operatic tetralogy that will change the face of music, there are plenty of heroic endeavors open to anyone willing to envision the healthcare system of the future. The opportunities are as limitless as the imagination.

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Using Performance Management to Scale

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Performance management is so much more than just a year-end performance review
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Performance management and goal setting have always been part of my DNA. It’s like a compass that tells us we are steering the ship in the right direction or gives us a chance to course correct if we wander off track. It’s hard for any organization to determine how they are doing unless there are clear measurable objectives. CIOs and their leaders need monthly, quarterly and annual goals to measure how you and your team are doing against the plan. I also firmly believe they should be S.M.A.R.T. goals: Specific, Measurable, Achievable, Relevant and Time-based.

Once the goals have been established, you need a written plan. I like three-year rolling plans so you can look into the future and describe your vision of what your organization will look like 36 months out. Then you can work back to the second year, and eventually the first year, to give you the framework for what you need to accomplish in the next 12 months. I suggest you do it with your managers. It makes them accountable to the organization since they are involved in the formation of the plan.

Your plan must be a living document to be used frequently during team meetings throughout the year to see how you are performing as a team and individually. This is not a process you invest in to review at year-end to see how you performed. By then it’s too late. It must be reviewed on a consistent basis to make sure everyone is on track. Performance management is so much more than just a year-end performance review. If there are individuals who are not performing against the plan, you can use the plan as a tool to performance manage them to re-engage as an important member of the team. 

I just returned from the Scale-up Conference in Denver and learned so much about taking goal setting and performance management to a whole new level by adopting the "Rockefeller Habits," as written by Verne Harnish. After reading the book, everything changed for me in the way we will be doing our planning, goal setting and performance management forever. It’s so brilliant and easy to understand. Here they are:

Rockefeller Habit #1: The executive team is healthy and aligned

Rockefeller Habit #2: Everyone is aligned with the #1 thing that needs to be accomplished this quarter to move the organization forward

Rockefeller Habit #3: Communication rhythm is established and information moves through the organization accurately and quickly

Rockefeller Habit #4: Every facet of the organization has a person assigned with accountability for ensuring goals are met

Rockefeller Habit #5: Ongoing employee input is collected to identify obstacles and opportunities

Rockefeller Habit #6: Reporting and analysis of customer feedback data is as frequent and accurate as financial data

Rockefeller Habit #7: Core values and purpose are “alive” in the organization

Rockefeller Habit #8: Employees can articulate the key components of the company’s strategy accurately

Rockefeller Habit #9: All employees can answer quantitatively whether they had a good day or week

Rockefeller Habit #10: The company’s plans and performance are visible to everyone

Accountability is no longer hard to measure since the entire plan is visible to everyone throughout the organization. Each part of your team should have key people accountable for every functional part of your organization. No more guessing is required. I’ve read countless books about leadership, performance management and goal setting, as I’ve been an avid student on the subject for decades.

These ten habits, once adopted and measured regularly, can change any organization that wants to grow and scale, and keep everyone accountable along the way.

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