Part I: A Steady Hand

April 9, 2013
For hospital and health system CIOs, crafting a budget that will meet future needs is now more difficult than ever. In large part, this is due to a confluence of factors that makes any certainty illusive.
David Muntz

For hospital and health system CIOs, crafting a budget that will meet future needs is now more difficult than ever. In large part, this is due to a confluence of factors that makes any certainty illusive. Among those elements are: the combination of increasing uninsured ED visits and decreasing elective procedures; the transitions to ICD-10 and HIPAA-5010; the movement to healthcare reform that will likely involve a shift to value-based purchasing under Medicare; and the lack of clarity around HITECH reimbursement as meaningful use and certification comes into focus.

Then there is the constant swirl of developments in the healthcare IT vendor market, not to mention the ever-shifting dynamics of local healthcare market competition. With all those puzzle pieces in the mix, no CIO could be faulted for feeling a bit panicked.

Figuring out how to optimally spend IT dollars in the next few years is a challenging prospect. And that is precisely why many CIO leaders are counting on the same operating principles and strategies that have kept them grounded in the past to serve them during these uncertain times.

“My take on all this is that these elements are simply accelerating a focus on what we should be doing all along,” says Baylor Health System Senior Vice President and CIO David Muntz. “So to me, there's no big surprise in this; if there's a difficulty at all, it's the order in which we might be required to do things.”

In fact, says Muntz, who helps lead a 14-hospital, 3,000-bed system based in Dallas, “I actually think this is a good-news situation. If I had to focus on the negative, I would say that if you can't rush to get the carrots, you should at least try to avoid the sticks.” By that, he is referring to the penalties that will be incurred for failing to use an EHR in a “meaningful” way as required under HITECH. The need to look at the broader picture in healthcare, Muntz adds, means scanning the horizon for the emergence of such important concepts as the medical home and accountable care groups, and putting the IT foundations in place to support concepts such as those that purchasers, payers, and policy-makers are moving toward.
Lac Tran

So, Muntz says, “My advice is to take a deep breath and to continue doing the things you were already doing, if they were the right things.”

John Glaser, Ph.D., senior vice president and CIO of the eight-hospital Partners HealthCare system in Boston, advises caution during this deep recession. “At the end of the day, organizations operate on a philosophy of either conservatism or aggressiveness. Fundamentally, I would tell people this is not a bad time at all to be fiscally conservative. The markets are recovering, but it's still tight out there; so you have to be conservative with capital and operating expenses; that's just smart and prudent. On the other hand,” he says, “There could be opportunities here, and these things happen when they happen. If we see opportunities, I wouldn't be the turtle who pulls in his limbs and hides.”
Tim Zoph

For Lac Tran, senior vice president and CIO at the three-hospital Rush University Medical Center in central Chicago, that translates into an acute awareness of the need to carefully prioritize, and in some cases, re-prioritize IT projects, while still adhering to core strategic principles. As a result, says Tran, “We're doing a lot of deferring to subsequent years of projects that are of lower priorities. And we're definitely cognizant of areas that touch on regulatory requirements.”

Among those areas are the transitions to ICD-10 and HIPAA 5010. “We have task forces in both of those areas,” Tran notes, adding that he believes ICD-10 will have a far bigger impact on his organization, as it will require all of Rush's coding professionals to be retrained (and to have their retraining documented), as well as requiring its physicians to be trained in the new coding system.

Fortunately, in other areas, such as preparing to request federal funding under ARRA-HITECH, Rush is well-positioned, Tran notes, as the organization has been live with CPOE for nine years already. “All these things are just helping us to get to where we need to go, faster,” he says.

Cutting a path

Industry experts see an interesting split screen when it comes to budget prioritization at hospitals across the country. Leading organizations have already made progress down the following roads:

  • The alignment of organization-wide IT spending with the patient safety, care quality, efficiency, and effectiveness goals of the organization;

  • The advent of IT as a facilitator to process improvement and a support for organizational cultural change;

  • Intensive clinical IT development, especially with regard to EMR and CPOE implementation;

  • The rise of the CIO as a thought leader and change agent within the organization;

  • The evolution of the strategic budgeting process as an affirmation of change agency.

Asked what cutting-edge organizations are doing right, Erica Drazen, Sc.D., managing partner in the Waltham, Mass.-based Emerging Practices/HealthCare Sector group at Falls Church, Va.-based CSC, says, “The biggest differentiator” has been in leadership over clinical IS projects. CIOs, executives, and clinician leaders in pioneering organizations “have long recognized that CPOE and eMAR and broadening patient access to medical records aren't IT projects; they're clinical process change projects.” That realization, Drazen says, is what compels a hospital or health system forward.

In fact, she says, “The top clinician leaders in your organization don't only need to be at the table setting priorities; they need to be pushing you, as the CIO, and saying things like, ‘We need to make patient care safer and improve the continuity of care, and can you help us with that, Mr. or Ms. CIO?’”

That positioning is very different, Drazen says, from what has developed in many hospital organizations around the country, where CIOs and their teams have been vested with the ownership of clinical IT development. Clinicians, she insists, must be the owners of clinical IT strategy. “Would a CFO allow IT people to tell them how to structure their revenue cycle program?” she asks. “Of course not.”
George Conklin

Greater CIO visibility

What many CIOs are finding is that governance and relationship-building are assuming more importance than ever before, bringing them to a more strategic place in their own evolution.

“These technologies touch so many aspects of the organization now that your strategic and financial alignment of technology becomes really significant,” says Tim Zoph, vice president and CIO of the 873-bed Northwestern Memorial Hospital in downtown Chicago. “As a result, you now have a broader audience, and a bigger portfolio of activity you're working through,” Zoph says. “We're entering into an era of knowledge and value, and the technology facilitating transformational changes within any organization is so important that this becomes about survival strategies.”

And so, says Zoph, what once could be neatly categorized as a budgeting process has become something much broader in scope. In fact, he says, the whole budgeting process in times like these, particularly for the big-ticket clinical IT implementations, becomes a governance challenge for CIOs. “And a part of governance is not telling people what to do, but instead, building confidence and answering questions squarely, and making sure the institution understands both the promise and limitations of technology.” Indeed, he says, “In times of uncertainty, clarity of leadership is even more important. This is a time where people really earn their leadership edge.”

Alignment equals progress

For those organizations whose existing strategy naturally aligns with today's trends, a clear advantage has emerged. “Our core vision is to be a low-cost, high-quality patient care organization, and though we're not going to buy every piece of technology out there, one of our explicit strategic goals is to harness technology,” says George Conklin, senior vice president and CIO of Christus Health, a 44-hospital Catholic hospital system based in Dallas.

And, since the focus at Christus is “around providing integrated information across the care continuum,” the health system has already been live with EMR and other core clinical information systems for a few years now, Conklin reports. What's more, he and his colleagues are busy working on a broad project to standardize medical vocabulary, with an eye towards standardizing care across the system.

In the end, many CIOs agree that getting the details of strategic budgeting right during this time of change and uncertainty means looking at the big picture and aligning organizational IT goals and resources with overall goals and industry trends.

“The good news these days,” says Baylor's Muntz “is that there's no longer anyone in a hospital organization who isn't thinking about information technology. So as CIO, you essentially become the great listener. It's your challenge to figure out how to coordinate all the disparate conversations and strands going on in your organization,” and to help lead action around those currents of discussion. Even with all the current fiscal and operational challenges involved, he concludes, that's a good place for CIOs to be right now.

Continue On to Read Part II >>>

Healthcare Informatics 2009 October;26(10):36-42

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