Seattle Children’s Hospital serves as the pediatric referral center for Washington, Alaska, Montana and Idaho. The organization’s facilities include 250 inpatient beds, a Level IV Infant Intensive Care Unit, Surgical Unit, Pediatric Intensive Care Unit, Inpatient Psychiatric Unit, and Rehabilitation/Complex Care Unit. HCI Editor-in-Chief Anthony Guerra recently had a chance to chat with CIO Drex DeFord about his work at hospital and industry trends.
AG: Let’s talk more about governance, because I think that’s a very interesting topic. Tell me a little bit about the structure you had in place and then, how you might have gone about revamping it and what you think would be some hallmarks of an efficient governing organization or process?
DD: When I started here, it was apparent that many folks thought the CIO is sitting on a pot of gold, and all they had to do was convince him or her that this was the right thing for us to do and the CIO would make that decision and move forward. I think you have to start with the notion that information services is here to support customer requirements, and not to do IS for IS’s sake.
Now, in the next breath I’ll tell you that, as an officer on the company and a senior vice president, I’m also an administrator, so while I have the responsibility to drive governance from the standpoint that I want my customers to have their voice and input, I also have to be the guy that says, “I think this is a good idea or a bad idea.” I do that from a position of understanding healthcare, understanding revenue cycle, understanding all those supply chains, all the things that I need to understand to help my customers make their decisions.
So I think you have to start there. The reason that we’re in business is to support customer requirements as far as an information services department in a healthcare setting. And then, if you take that model and you say, “Okay, how do we govern from that?” In my particular case, I’ve set up a clinical information systems advisory committee; a business information systems advisory committee; knowledge management IS advisory committee and a research IS advisory committee. Each of those are chaired by folks not in the IS department. So, for example, our clinical IS advisory committee is chaired by our chief medical officer; the business IS advisory committee is chaired by our chief financial officer, etc, etc, and their co chairs are the directors of those parts of the department inside of IS. So they’ve got that good connection inside the IS department from the standpoint of what’s capable, what’s possible, what can we do, what do these new modules in this existing application bring me, that sort of thing.
The membership of the committee is completed by the chair and the co chair, I would say primarily by the chair. So again, whether it’s business systems bringing in supply chain people; research on a business IS advisory committee; clinical people on the business IS advisory committee or vice versa; there’s some good cross pollination here.
My experience has been, when you first set up a governance process, the first place to drive it is toward capital investments and trying to make those initial decisions about capital investments. Then, long term, what you really want to do is say, “Regardless of time, let’s just talk about, in the space of the clinical IS world, what capabilities do we need? What problems are we trying to solve?” And we map that to additional modules or new functionality in existing applications, or maybe new applications that we need. Our goal is to build a flight plan for clinical, for business, for knowledge management, for research and then those chairs and co-chairs sit down together and build a master flight plan for the investments that we need to make over time.
I think that list and those people, coupled with an IS project management office — which can do a lot of the underlying work around contacting vendors and getting estimates and bringing demonstrations that all help those IS advisory committees reach conclusions — you wind up, almost accidentally, with a pretty good strategic plan for capital investment over time. Then you’ve really got a case when people sit down with your CFO and say, “If we draw the line here, we need $X million next year in capital to make this kind of progress. If we draw the line here, we need less, but we’re going to have less capabilities.”
At the same time, your customers are really tied to that process; they are advocates for the investment; they understand that the investment means that there are particular outcomes that are expected, because that’s where it started. Overarching all the IS advisory committees is an IS governance committee that’s comprised of our strategic planning group, which is our senior vice presidents, including our hospital president of research and our CEO. We engage that group almost as we need them, at this point. Because we’re really starting the early stages of building our governance structure here, we’ve really provided mostly updates to that governance committee, as of today, although the governance committee has driven the mandate that the advisory committees will stand up and that this is their work.
AG: So you’re pleased with the structure, the governance structure you have in place?
DD: I’m pleased with the structure as it stands today, but I can tell you that, just like the organization structure inside the department, one of the first things I did was a departmental reorganization. I have always said, starting right up front, the governance structure we have today, or the organization structure that we have today, may not be the one we need tomorrow. We have to be agile and flexible to adapt to whatever might come along. I think the financial crisis is a perfect example of that. We’ve got to put ourselves in a position where we can act quickly when times are good and we need to do something very important to give us an advantage or help us move ahead, and we need to be agile so that we can do the things we need to do when times are bad, too.
A big part of what we do at Seattle Children’s, we’re really tied into the Toyota production methodology, so our change management methods here at Seattle Children’s are a process we call continuous performance improvement. So you’ll find all of our major business lines have value streams that map all of the projects to particular outcomes, and their current states and future states. There are regular report outs on work that is going on in those value streams, and we have one built in IS and we do a lot of that similar work. Of course, our work is really tied to our customers.
AG: Would you say that it’s accurate that CIOs have to be proactive about handling the financial crisis by leaning up their budgets before being asked? Would you send that message to your peers?
DD: I think the message I would send to my colleagues on finances and budgets, especially operating budgets, is you really have to do your best and, for me, that has meant having a financial consultant on the staff that’s tied at the hip to my CFO’s staff. That person must know where and how we’re spending virtually every dollar; that I do a good job in building a budget from a zero base, so that it’s very clear that every dollar that I’m asking for in my budget, I actually need. They must make sure that I can explain what happens if I don’t get those dollars, what services do we lose, or what capability do we lose, and what capability do we gain when particular lines are funded. That makes it much easier to defend a budget. They need to explain that there isn’t any slush in that budget, that the money in there is keeping the doors open, is needed to keep operating; that here is the piece of the budget that might be used for new innovation or other things. They need to help me explain where there might be some cuts available, but everyone has to understand what you lose when you make the cut.
I think you’ve got to start with a good, solid zero-base budget. Doing that puts the CIO in a much better position than, “I took this year’s budget and added 5 percent.” If you do that, the CFO comes back and says, “Cut 10 percent.” Then you’ve really got to figure it out but you’re dealing from a position where you don’t really know from whence you started, so I think starting in a good place puts you in a better position to make any kind of decision.
AG: Your career path came up through the IT side?