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Have You Written Your Health System’s Constitution?

April 13, 2017
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Sound IT governance requires the federalist approach to centralized vs. local authority, says Advisory Board’s Ernie Hood
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Are there parallels between the development of your health system’s IT governance structure and how the Founding Fathers compromised to create the U.S. Constitution? According to Ernie Hood, senior research director for the Advisory Board Co., there should be.

Hood, former vice president and CIO at Group Health Cooperative in Seattle, gave a recent online presentation about creating true “systemness” in this era of health system consolidation.

First, he noted that despite all the consolidation that is taking place, it has rarely led to greater efficiencies or lower costs for patients.

Part of the reason, he argued, is that many merged organizations haven’t done the hard work to really become one entity with everyone pulling in the same direction. But changes in the marketplace, including the shift to accountable care organizations, are making it more necessary to have higher levels of competency in integration. That often involves making hard choices, Hood said. “People have to commit to disruptive change, but that change may be hard on them as individuals.”

What can go wrong during healthcare mergers? Local executives tend to remain focused on maximizing the performance of often-competing “fiefdoms.” Physicians can remain locked in cultures of individualism and tribalism despite stronger contractual alignment. And front-line staff members can be unaware of or disengaged from system priorities.

Information technology can hamper or aid efforts to create a single system. Merged organizations can have a hodge-podge of siloed applications that don’t talk to each other. Data used for quality metrics aren’t “apples to apples,” so you fail to get clinician buy-in. Hood noted that access to consistent applications across all modalities of care is important, and IT governance rules are key.

Hood spoke about some rules for “writing the constitution” for your health system, in terms of centralized vs. local control. “You can’t centralize all decision making,” he said, so like the Founding Fathers you have to find the health IT equivalent of a “federalist” balance between the states and the federal government. “Getting the balance right can be tricky.”

From his research, Hood says, organizations tend to cede too much authority to the local level. Potential drawbacks include unjustified variation and conflicting efforts. In those cases, organizations can end up with the “tail wagging the dog.”

But in the opposite case, centralizing every power merely exchanges strategic failures for operational ones, Hood said. If you fail to distribute authority over resources, you risk disempowering people. People may feel run over as local needs are underemphasized, he said. You reduce staff engagement and lose local perspective.

In defining roles, IT governance at the system level should emphasize planning but should delegate implementation to the local level, he said. This may involve limiting governance to guidelines that can be localized and limiting rules to a minimum set of guardrails. “A rule of thumb is that planning should be elevated to the system level and implementation should be delegated to the local level,” Hood said.

And just as the Founding Fathers sought a more engaged citizenry, you want to get employees to think like system citizens, Hood said. You need to make special efforts to engage front line staff and be as transparent as possible about why decisions are being made. “The more you share, the more engaged they are going to be at the local level,” Hood said. “Governance should provide a means for the local level to review and coordinate changes that impact them.”

Because Hood had served as CIO for Group Health Cooperative (GHC) in Seattle, I immediately thought of its recent merger with Kaiser Permanente. I asked Hood if a merger like that between two large organizations with sophisticated IT infrastructures was easier or more difficult than one in which a large fish swallows a much smaller one.

Mergers are much easier when one organization simply swallows the other because there is a working system that’s being adopted rather than something new being created, he told me in an e-mail exchange.

“In the case of GHC and Kaiser, the situation is a bit unusual in that their path is eased by familiarity. The two organizations have been close for decades, have no overlapping territory, have often shared intellectual property and they use many of the same IT systems (both are on Epic for example),” Hood said.

The two organizations know each other pretty well, he added, and there are even a lot of cultural similarities that should help compensate for the complexity. “Their changes may go a lot smoother than one would typically expect for two similar organizations trying to merge.”

IT governance is not a project with a start and end date, but an ongoing challenge. And in an era of mergers and acquisitions, it is one of the health system CIOs greatest areas of focus. How many are getting it right? How many are in need of constitutional amendments?