One-on-One with Catholic Health Initiatives SVP and CIO Michael O'Rourke, Part III

June 24, 2011
Catholic Health Initiatives is a nonprofit organization headquartered in Denver. The faith-based system operates in 20 states and includes 77

Catholic Health Initiatives is a nonprofit organization headquartered in Denver. The faith-based system operates in 20 states and includes 77 hospitals, 40 long-term care, assisted- and residential-living facilities, and two community health services organizations. With approximately 70,000 employees and annual revenues of $8.2 billion, CHI ranks as the nation’s second-largest Catholic healthcare system. Last month, O’Rourke was promoted to full-time CIO after an 18-month interim stint, during which he helped restructure the entire IT organization. Recently, HCI Associate Editor Kate Gamble spoke with O’Rourke about what it takes to transform 40 autonomous operations into a single enterprise, as well as his vision for the organization.

Part I

Part II

That brings up another big issue, which is the state of the economy. How is the economic situation impacting your plans, or how will it impact your plans in the near future?

MO: I think that just looking at the economic downturn around the country, and actually, around the world, it has had an impact on health IT, and across our whole organization. I think the whole healthcare industry is impacted by it; everyone is really looking at where their investments are going to be made — what they need to invest and what they can hold off on right now, because there’s so much struggle in the economy.

Because we’re a faith-based organization, we do a lot of charity care, and the numbers of people who need healthcare who have lost their insurance grows during this time. That’s what we do; that’s what our mission is — we provide care for those people. But that also costs us a tremendous amount of money every time that comes out of the hospital’s revenue to support those folks. And we’ll continue to do that.

In IT, as is the trend across the country, we’ve had to curtail and cutback on our plans, on what we’ve wanted to do. For example, we had some very large plans for continuing on many of the applications for Cerner and for Meditech, getting down to much more standardization with them, and making sure we have barcoding in our medication safety programs in place. And we’ve had to pull those back just because of the challenges with revenue and the other aspects I talked about. Everyone in the country is going through that. All my colleagues — whether from faith-based, for-profit or other areas — are saying the same thing, that we’ve got to hold on another few years until we come out of this recession.

So it has affected us. But it also causes you to make wise decisions. It forces due diligence and good business practice to say, okay we can’t do everything, so what’s important to the organization? We’ve gone through that and I think it’s actually made us smarter and it’ll help us when we’re out of the recession. And we will come out of this, and we’ll have better business practices and make smarter decisions because of the challenges we’re facing right now.

That’s a great point. While this situation certainly isn’t ideal, it is forcing organizations to reprioritize and, like you said, develop better business practices.

MO: Exactly; it’s very true. It puts in disciplines and processes that will carry you forward long after the recession is over.

So with all of that considered, what are your biggest goals as you take on the role of full-time CIO at CHI?

MO: I’ll give you the really high-level goals we have. One, obviously, is to help the organization through these downturns. We want to make sure that the IT and the services we deliver are very affordable, and that we can identify and be very transparent in what our cost model is. And that’s very important, because we have to get to a point where the organization is comfortable with the level of service, whatever that may be. That can bring cost down to a very low level, but then I also bring down my quality and service delivery. So the key thing we’re looking at in the next 18 months is critical in terms of getting out of this tunnel, and continuing our focus on good cost affordability and good cost management to the organization.

The second component has two parts. One is continuing, during this time, to really look at what are our IT strategies and how those link back to the organization’s strategy on growth and stewardship and some of the other areas we’re focused on. How do we become an ambulatory delivery organization? How do we deliver our services? We have a lot of rural organizations; how do we get telemedicine set up and make that cost affordable and convenient for specialists in cities to consult with our rural practices, and take that technology and start moving it in that direction.

So our goal is to really start building, even though we’re in sort of a holding pattern. This is the time to start looking at what we need to be doing in the next 5-7 years to once again gain ground for our organization. So that’s part two.

Part three is the newest delivery coming to (our organization) in terms of a stimulus package. We are really looking at how do we get ourselves into position to really take advantage of the incentive that the AARA (American Recovery and Reinvestment Act of 2009) has provided. There are huge incentives in there that can really help us on our journey to get to better outcomes and better deliverables for our patients. But that’s going to be a challenge in the next 18 months because it does require some changes and probably some investments that are very difficult to get right now.

It’s interesting that you brought up telemedicine. I think that’s a trend we’re going to see more and more of in the coming years, particularly as the baby boomers age.

MO: You’re right on target. Really using technology, especially broadband, high-band telecommunications, to really move the provision of servers virtually — that’s what I see. Because right now, we’re very much focused on bricks and mortars and where we are in our location. And the reality is that the baby boomers are moving around; they’re going from Minneapolis and North Dakota down to Arizona. Alabama and Louisiana are becoming big Sun Belt attraction areas. And as an organization, we have to look at how do we deliver service and keep our patient population, but not necessarily go down to Alabama and build hospitals.

You do that through these high-speed, broadband capabilities, using telemedicine. You have people in the home that communicate by telephone and by Internet to collect vitals and things of that nature, to get better disease management where we can track people, track their indicators, and help them as patients without having to physically be in the same environment.

IT is becoming more virtual, and I think healthcare is going to have to be more virtual. And I think we’re prepared to do it; the technology, I believe, is absolutely there. What we don’t have — and I think this is changing — is the incentives to start to use that. For example, you probably heard of electronic ICUs. These are very valuable programs, but they’re very expensive. And in many cases, you have might have two or three eICUs in some cities. The reality is, you have to think sort of broadly around how to get economy to scale and not be competitive about this, because you can have one organization that has eICU and other organizations that tap into that and pay a fee for that service. Right now as we keep rolling some of these things, so we’re not getting the economy of scale; that requires partnerships that we haven’t engaged in. But I think the fact that people keep moving around and the fact that we can’t afford to keep recreating and duplicating is going to leverage us to say, where are these things, and if CHI set one up in an area, we would have other organizations that would pay to use that, or we would pay to use those things. But that’s a case of a virtual environment where we get economy to scale and there’s a non-competitive structure around it. And I think that’s where we’re going to have to go in the next 10-20 years to make healthcare affordable. Because we have a lot duplication of some very good stuff, but it probably would be more than we need.

Interestingly enough about telemedicine, about six months ago I read an article that was talking about the scarcity of specialists. They were talking about how that really affects and hurts rural areas. And the theme and outcome of the article was, we do not have a shortage of specialists; we have a disproportionate distribution of specialists. They’re all in the cities; once you get out to the suburbs and rural areas, you don’t have these people, because they can’t afford them. So how do you solve that? Easily; technology can solve that.

I agree. I think that in these times, healthcare systems need to leverage the technology better and partner with hospitals. I think that’s what needs to happen to push things like telemedicine forward.

MO: Exactly. We want to lower costs and take out the redundancy that doesn’t add anything to cost. I think there are probably a lot of critics of the budget and stimulus package, but the reality, I think, is that the government right now is sending a message that you’re going to have to move into this area; we’re going to subsidize you to do that, but at the end of the day, you’re then going to have to pick up the mantle here and go with that. And I think that’s fair. Give hospitals a little breather, give them some incentive, give them some relief or extra reimbursement, and then set that stage. And if we’re smart, we’ll start doing those partnerships.

KG: I think you hit the nail on the head. No matter how things are right now with the economy, it’s critical to keep looking 3-5 years down the road.

MO: Absolutely. I’m old enough to have lived through the 80s, the savings and loan situation and I’ll tell you, it looked bad and it felt just as bad as it does here, and that all turned around, and I think this will turn around too and we’ll be back in a healthy place. But I do think some of the things being put in place — the incentives and drivers — will change healthcare fundamentally.

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