Part II: Hunkering Down | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Part II: Hunkering Down

September 27, 2009
by Daphne Lawrence
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As the deep recession makes access to capital a serious challenge, devising a strategic budget has become a high art. And as initiative after loosely defined initiative comes down from Washington, smart CIOs are devising methods of moving forward in an uncertain, unstable environment.

But it's not one size fits all, by any means.

Though there are many general approaches to strategy in a managing uncertainty, in this part of our cover story we look at four very different CIOs and the specific steps they are taking to fine tune that strategy. These CIOs have already begun to incorporate sweeping changes into their budget process, offering clarity for their CEO and CFO, while allowing the flexibility necessary to react to changing market conditions. In these profiles, we reveal four detailed case studies of exactly how specific CIOs (and institutions) are grappling with change and uncertainty.

Looking for Opportunities

Philip loftus
Philip Loftus

“We face the same challenges as everybody - budgets have been cut, staff has been cut, and paradoxically, we are being asked to do more than ever,” says Philip Loftus, vice president and CIO at Aurora Health Care, a Milwaukee-based system than includes 13 hospitals, more than 100 clinics and more than 110 community pharmacies. In this time of limited resources, he believes IT needs to focus on a smaller number of high-impact projects. As a result, he is laser-focused on safety and patient satisfaction, which have been core strategies at Aurora, instead of the seven or eight projects he might have planned.

“We don't want to throw the strategic plan completely out of the window, so we focus on the critical things and keep those going as long-term goals. But we're recognizing that we need to give a quick business response in ways we had not traditionally done in the past.”

That response meant producing financially measurable short-term returns, so Loftus began looking for projects that could produce fast revenue. “Instead of using IT to reach our long term goals, we're using it to help us improve cash flow and profitability in the immediate next couple years.”

Those projects included: deploying Los Angeles-based Zynx (a clinical decision support system) in all the EDs to achieve better billing and data capture; implementing transcription, which has already delivered a measured savings of over $6 million; and planning to install code-writing software in radiology to improve the accuracy of charge capture and identification, he says.

Ensuring that Aurora meets requirements for HITECH incentives - which, for the organization, should amount to between $40 and $100 million - required a new type of planning as well. Loftus says Aurora decided not to wait for the final definition of meaningful use and certified systems. “With a system of our size, if we really wanted to make any significant changes, (waiting) would put us way behind,” he says. Aurora put a business document together based on its best guess of meaningful use and certified systems, and then developed scenarios around them.

The first scenario under consideration was to qualify all the hospitals and physicians in 2010 and begin receiving incentive payments in 2011. “We decided we couldn't get there that quickly,” he says. “Our goal scenario says if everybody got on board, and we set this as one of the top three business priorities for Aurora as sponsored by the CEO, we probably could get there in 2011 and get the incentives payments in 2112.”

That business document was authored by Loftus and his IT department, with the top 120 managers across the Aurora system as its target. “The critical thing is letting the management know up front that there may be disruptive change, but we're all in this together, and they participated in the decision making.”

(For more information on how Loftus is guiding Aurora Health Care through tough economic times, please read the interview on page 20.)

Forging New Bonds

Helen thompson
Helen Thompson

“The one thing that is absolutely certain about the world we live in is that things are going to change,” says Helen Thompson, CIO at Heartland Health, a 400-bed hospital in St. Joseph, Mo. “We have a seven-year IT strategic plan for the organization. And every single day, as I look at what is going on in the industry, I ask myself, ‘Are we still on the right track?’” As such, Thompson says a CIO must remain agile and flexible, and at Heartland, that agility was focused around fine-tuning the long-term plan for the EMR.

With a robust system already in place, being on track for Thompson meant accelerating inpatient CPOE and physician documentation - especially after the initial meaningful use definition was released. “We pulled them forward a year,” says Thompson. “And we understood that there were some things we might have to forego to do them.”

When the recession hit, with Heartland in the middle of a construction project that hinged on capital funds, tough decisions had to be made. “We took a very careful assessment of the short and long-term impact of stopping - not only to our organization, but also to the community that we live in - and said we have to keep the construction going,” she says.

Keeping an eye on that organizational perspective has led Thompson to forge new bonds at Heartland. She explains that her CIO role is increasingly linked to the COO, and she has become more of a partner and facilitator. “We work hard at keeping track of projects, and I know what projects can be stopped and which can't,” she says. “When the organization has to change direction, it comes down to being aware of what is going on in the rest of the organization instead of what is just going on in IT.”

Thompson says she can't stress enough the importance of the CIO's role with operations - especially as reimbursement shrinks. “The question is going to be what's adding value and what's not,” she says. “And CIOs are going to need to think about some of the non-core things that we do.”

That, says Thompson, entails not only working closely with senior leadership, but also reaching outside the organization for advice. “We tapped into Ingenix (Eden Prairie, Minn.'s Ingenix purchased the consultancy Healthia in 2007) to help us polish that crystal ball and remain agile as things changed so rapidly,” she says. “We also reached out to our primary vendors like Lawson (St. Paul, Minn.) and Cerner (Kansas City, Mo.) because they had strong government groups. We tapped everything that we could to improve our visibility into the future.”

Managing Risk

Catherine bruno
Catherine Bruno

Vice President and CIO Catherine Bruno says the focus at the seven-hospital Eastern Maine Healthcare Systems in Brewer, Maine, is on patient safety and eliminating avoidable errors - with the EMR as the key component to success. “We see what's going on with HITECH as an extension of that,” she says. “What it will do is fine-tune our activities and accelerate some timelines because there are attractive financial benefits.”

One project that has been accelerated, says Bruno, is CPOE. The plans were to go live with CPOE - which is already deployed at one of Eastern Maine's seven hospitals - at the rate of one hospital per year for the remaining facilities.

That has changed, as Bruno now plans to roll out the rest of the hospitals all at once. “The executive teams need to understand how involved their medical and nursing staffs are going to be,” she says. “It's happening faster, so they'll have to figure out how to do it in a similar way to get it done in time.”

HITECH, she says, has put a dollar figure behind the value, which has helped the organization accept the faster CPOE rollout. The economic downturn has had an effect as well. With limited capital available due to tighter budgets, she says setting priorities for projects is key. “We try to get more predictable results, particularly with limited funds,” she says. “We find if we manage the risk we'll have the highest probability of success.” Bruno says she is watching bundled payments closely; her CEO is on a committee that works at the federal level in Washington. “We're keeping our options open,” she says. “We're moving forward the best we can with what we know.”

The hospital system is continuing its portfolio approach for current and potential projects, which includes “must-do” projects like ICD-10 or system upgrades. “We review that portfolio with our governance committee and give a regular status report,” she says. “If we get to where we have a conflict, we work with the executives to make the best decision for the organization.”

For Bruno, that has meant increasing her engagement with the hospital CFOs, and implementing a new business planning strategy where CFOs are specifically asked to sign off on IS projects, “because budgets are so tight and we want to make sure the capital is available.”

Staying the Course

Alan soderblom
Alan Soderblom

At faith-based Adventist Health, a 17-hospital system headquartered in Roseville, Calif., Vice President and CIO Alan Soderblom is facing some of the worst issues of any state in the country, budget-wise. But the best plan, he says he believes, is to stay the course. “The winds of government are going to blow left and right, and we keep our eyes on that very closely,” Soderblom says. “But what's important for us in IT solutions is what's best for Adventist Health and what is best for the care of the patient.”

For Soderblom, that means sticking with the multi-year strategic plan that Adventist already has in place. “That's been our approach for the last 10 years, and we see that continuing for the next 10,” he says.

Though the California state budget is in dire straits, Soderblom says he has not had to put projects on hold - yet. “We have not had to make a significant course correction,” he says. “But we do have anxiety about the future, especially as it relates to the California budget and the potential for the underinsured population to grow.” Since Adventist's financial resources could potentially be impacted, Soderblom says he is developing contingency plans such as delaying specific projects past 2010 and slowing down implementation across the 17 hospitals.

The next big IT project in line at Adventist is CPOE, and Soderblom feels that because of it, Adventist is well positioned for incentive dollars. “We feel the timing is right, and we think we'll have the right percentage of CPOE implemented by the time the incentive payments start to be made,” he says. “But we're making sure we stick with that timing.”

Another upshot of the economic situation is that Adventist has ramped up the level of collaboration between CIOs, according to Soderblom. “It's grown tremendously, and there's a lot of sharing,” he says. “We participate in CHIME, HIMSS, the Cerner healthcare conference, and getting on the phone with the five Adventist healthcare systems in the United States and building off each other, rather than having to do it independently.”

He's also moved grant opportunities from local hospitals to the corporate level. “We have a centralized IT shop, and now with the funding available for grants, we are building the skill set for IT grant writing at an enterprise level,” he says. Soderblom plans to add resources in the corporate office to identify grants and proposals.

In the end, he says staying patient-centric is his key. “You certainly have to keep your eyes on what the state and federal government are doing, but at times it can be distracting too, because you try to maneuver too much for that,” he says. “We stay involved and connected, but the patient focus remains at the top of the pyramid.”

Healthcare Informatics 2009 October;26(10):44-46


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