Carolyn Scanlan is president of the Harrisburg, Pa.-based Hospital and HealthSystem Association of Pennsylvania (HAP). The statewide membership services organization advocates for nearly 250 Pennsylvania acute and specialty care, primary care, subacute care, long-term care, home health, and hospice providers, as well as the patients and communities they serve.
KG: Can you tell me a little bit about your organization?
CS: We are a statewide hospitals association and we have 250 members — acute care hospitals, rehab hospitals and psych hospitals. Our main core activity is advocacy on behalf those hospitals, both in the Pennsylvania state legislature and state agencies as well as in Washington with our congressional delegation and with other state associations and the American Hospital Association. We are a pretty standard state hospital association trade group.
KG: How long have you been in your position?
CS: For 13 years now.
KG: Where were you before you started with HAP?
CS: I was actually in New York State. I was executive vice president of the Healthcare Association of New York State, which is the sister organization. Before that I worked in a hospital system, and prior to that I worked in the government sector in New York.
KG: As you know, hospitals and health systems all over the country are feeling the impact of the economic downturn. What are you seeing in Pennsylvania; is it pretty much on par with what we’re seeing on the national level?
CS: From what I’ve seen looking at the statewide newspaper clips, I can tell you that what’s happening in Pennsylvania is basically what’s happening across the country. It’s hard to access money, and so it’s hard to finance facility and technology needs. The cost of borrowing money is increased and oftentimes it’s harder to borrow money, even at any price.
At the same time, hospitals are seeing a whole series of changes in the types of admissions that they’re getting. The number and mix of patients is changing. We see lower admissions on elective procedures and outpatient procedures, and rising unemployment is leading to increased uncompensated care.
KG: As far as the ability to borrow money for capital projects, is that one of the bigger impacts that you’re seeing?
CS: We are. We put out a survey to our hospitals, and we had three questions specifically about IT. The first question is, is your hospital reconsidering or postponing capital expenditures in any of the following areas: inpatient capacity, outpatient capacity and clinical or information technology and equipment. We had the highest response for information technology. Forty-eight percent are reconsidering an inpatient capacity; 54 percent an outpatient capacity; and 64 percent in clinical technology and equipment. So across the board, hospitals are reevaluating or in fact postponing capital expenditures that they otherwise were scheduled to make this year.
KG: Those numbers are pretty close to the figures that AHA had in a national poll, with the exception of IT.
CS: Right. For information technology they had 39 percent and for clinical technology and equipment they had 45 percent, and for new capacity or renovations, they had 56 percent. So it’s all within the range. The IT number that we have is a little higher. But the key is that, yes, they’re reconsidering it at high numbers.
KG: So what does this mean for CIOs?
CS: I think it means that they have to look at the systems they have in place, and see where they have probably put off doing adjustments or tweaks. They need to see if their current information system — both their software and hardware — can be accommodated in the short term to do more while the hospital sorts through what they’re able to do in the acquisition of new technology.
KG: From what you’re seeing, are the larger systems like UPMC and Geisinger Health System being impacted as well?
CS: I don’t have the specifics on those organizations, but I can tell you that any prudent management team, which would include a CIO, is looking at exactly what their finances are in an organization. And while they may not change or stop their IT strategic plan, they may slow it down a little bit to match whatever changes are occurring in their investment income and cash flow.
A few months ago, UPMC announced that they were laying off 500 positions. So against that backdrop, I’m sure that management leadership is looking at all issues, including IT. Any prudent leader would do that; it’s the appropriate thing to do at the moment.
KG: You never want to see innovation take a back seat, but it seems like there are situations where organizations don’t have much of a choice.
CS: If you don’t have the money, you can’t invest it. And if you can borrow, you don’t want to borrow at high rate, so I think people are maybe taking a slow-down or a wait-and-see attitude. The world keeps telling us, this could be a long recession, a short recession, a medium-length recession, and until the financial markets sort themselves out, we may not know what to expect. Hospitals, like all other major organizations, are dependent on those financial markets. We just need to catch our breath a little bit.
One of the other questions we asked was, as a result of the current economic crisis, your 2009 IT capital budget will: increase, decrease, stay the same, or uncertain. Forty-five percent said it would decrease, 34 percent said it would stay the same, 11 percent were unsure and nine percent said it would increase. There’s an array of responses, probably based on what’s in the budget, how they’re paying for it, and the extent of which the commitments are already in place by contracts or other means.
One of the other questions we asked is, will your 2009 IT operating budget increase or decrease. Half of them said it will stay the same, so I think that means that they’re committed to wherever they happened to be at this moment in time and playing it through over the course of 2009. Twenty percent said it would decrease but 18 percent said it would increase, so I think the issue is the capital investment — which is the technology, hardware and the infrastructure that hospitals would be paying for. I think there’s more of a tendency to slow down or delay that than there is in the actual ongoing operating budgets of IT.
KG: It seems to me that there’s a lot of uncertainty right now; that not knowing how long the recession will last is certainly impacting IT spending.
CS: I think it’s that piece. And also think it’s that we’re in a presidential transition and the incoming president has talked a lot of about the need to invest in information technology, particularly in healthcare. So I think hospitals, while also trying to cope with the economic downturn, are trying to understand where the new administration may be going and wanting to be consistent with wherever that is. Maybe there’s a parallel reason to slow down until we see where the new administration may be going.
In the midst of the economic problems, there’s also this really significant transition. And so, people are trying to be prudent at the moment about where their investments are, what they’re obligated to do, where they are already in their IT strategic plan cycle and what they absolutely have to do and in what areas they can take a pause and see what’s going to happen.
KG: What advice is HAP offering to hospitals during this time?
CS: What we’ve been trying to say to hospitals is, you know what your IT strategic plan is, and clearly the more automation and the more electronic implementation that you have, the better the view is around patient care and around the monitoring of care. We are part of an organization called the eHealth Initiative in Pennsylvania that really talks about a lot of the data collection and data sharing. I don’t think we would suggest as an overall policy that hospitals not do anything, but they really do have to take into consideration their own economic status, their own strategic plan cycle and where they are, and to make sure that it makes sense for their particular hospital. I can’t begin to give people advice as to financially where they stand and where they should be making their investments. That’s clearly a decision that each hospital has to make on its own.
KG: Sure. Now as we start to see changes with the economy and with the new administration, how beneficial do you think it is for hospitals to partner with advocacy groups to make sure that they’re taking the right steps?
CS: We would council to our members that we are a good place for resources and information; that we are part of the advocacy conversations on the state level and federal level about information technology, and that conversations occur on an ongoing basis within the organization as to what our positioning should be around any particular issue. Clearly, members influence and help design what our strategies are, so we think it’s important for hospitals to be part of those conversations.
The hospitals that you mentioned before — Geisinger and UPMC — are actively involved in the association and in the eHealth Initiative, as are many others. We think that on the whole, our hospitals are ahead of the national average on the implementation of various parts of information technology, and we’d like them to continue to stay that way. We’re just concerned that the economic downturn is going to affect the pace and speed of what hospitals are able to do.