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

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 CHIs 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.

KG: When you first started at CHI, it seems like you were looking at some pretty daunting tasks. What were your thoughts at that point?

MO: First of all, to give you some background on the organization, were very large. Were in 20 states and have something like 77 facilities. That might not be the exact number because it keeps changing, but that gives you an idea of the depth and breadth of the organization. When these types of organizations come together, typically they do so by acquisitions and mergers, and one event that occurs is you wind up with a lot of diversity, and a lot of different structures and different look and feel.

This organization is about 12 years old, and so as it broadened, it acquired a lot of people and a lot of things. But there comes a tipping point at every organization where you look across as youre growing and as your strategy keeps growing, and you say, ‘wait a minute, we have to step back here, and to a certain degree, in terms of IT, it gets out of control. We wind up having a lot of diversity in the organization; we have different clinical systems and different hardware. We have different organizational structures and different procedures. We handle audits and HIPAA differently at different places.

The tipping point, I would say, really happened two years ago when the senior executives at Catholic Health Initiatives decided that we needed to do something to look at what IT is doing. Its a large structure, but were not doing things consistently. So thats sort of the beginning of the road map to where I came into the organization about 18 months ago. I came into help the organization as the interim CIO in this journey to go from 30-40 different market-based organizations (MBOs) into what we framed as one single enterprise IT organization that would deliver services and outcomes consistently. And by consistently, I mean in the sense that you could benchmark and know what to expect; what the outcomes were and what the guaranteed services would be.

So when I came to the organization, thats what I was looking at. I was looking at 30-40 different ways of doing business and 1,000 employees. The first thing we started doing was gathering information about why they do it this way, and what we found out was we have 30-40 organization structures and 30-40 IT governances. There was no standard project management focus, no set of standardizations across the organization. There were budgets everywhere and hardware everywhere. Thats what I saw when I came in; everything was everywhere. You really couldnt say what was the true total cost of ownership for information technology in the organization, because it was buried everywhere.

Its not an unusual story; youve probably heard it before.

KG: We have, but Im not sure Ive heard anything quite on that scale before.

MO: This is a pretty broad scale. CHI is one of the largest organizations in the country as a health delivery system. So that was the work at hand — how do I go from 40 different approaches and no or very little standardization to speak of, into a model that now really can be benchmarked against any Gartner benchmarks or any industry benchmarks. And some of the best industry benchmarks come from outsourcers, where they have a really low cost and high delivery. So the first thing we did was set the bar and say, we want to be an organization that could be benchmarked against the best in the country. That includes our sisters and brothers in faith-based organizations, those in for-profit, and those who outsource. And we felt if we could really structure ourselves to compete with that, we would have affordable IT solutions with high outcomes, and capabilities to report on these things to compare them so that we could hold ourselves accountable for service delivery. So that was the challenge when I came in.

KG: In the midst of all that, what was your primary focus?

MO: I would say along that path, my focus Indeed! besides raising the bar to that point — was we had to had to design a whole new organizational structure. We had to support that. We had to put in a whole new IT governance, which had sort of a corporate central model to it. We had to create an enterprise project management office; we had small little pockets of them. We had to build a business intelligence organization because we had data in small islands everywhere that we werent using effectively. Obviously, we had to standardize our applications. To give you a sense, we had 850 different applications. We did our gap analysis, which told us that 150 is probably the right number for an organization with as much diversity as we have — we have big hospitals and small hospitals. So thats the big task and thats the journey that were on.

And on top of that, we had to take all these budgets and bring them into one budget so that we could manage people across the organization. We have to become, and we are, a virtual IT organization. Were leveraged so that we can put people wherever we need to put them. We have people at various MBOs who work for projects on other MBOs, which never happened before. Thats how you leverage the organization and you maximize your resources. That sort of paints the picture of what the environment was and what our objectives were when I came in.

KG: So clearly, you had your work cut out for you. That seems like a lot of work for an interim position. When you were hired, was there an understanding that you would eventually assume the full-time CIO role?

MO: Thats a very good question. Let me give you the background. When I first met with the executive team here, the plan was formulated. We understood very clearly in the beginning that this role, the interim CIO, was going to be a tremendous change agent. Not only was it going to change the structure, it was going to change the culture. Because when youre doing things autonomously throughout the organization, and all of a sudden you say, now we have to do it this way, you have to turn that control over to someone else. And you have to trust that that person is going to be a steward and guardian for you.

A lot of things had to change, and that required a level of credibility and trust. At the same time, we also knew that in this process, I was very likely to not make a lot of friends. I had to do things in a short period of time. I wasnt going to be able to negotiate through some of these things; I really had to drive very hard. So when we sat down and talked about this, we said that it would be a good thing to put an interim CIO in there, because if they burn those bridges, but they get the job done that is absolutely necessary, they would probably have to leave at some point. And I was in total agreement with that, having done many of these over the last few years.

So that was the intent. Having taken on the permanent role was sort of a surprise, I think, to everyone.

KG: I can imagine. So how did you then transition into the full-time role?

MO: Having gone through the tremendous changes we went through — and they were, for the most part, and still are, very well-received and very positive to the organization — throughout the process, my style has always been to be very transparent and very upfront; to put all the cards on the table in terms of where were going, what were doing, what are the implications to the organization, and how were going to get there. And I always try to speak to the opportunity on the outcome, because theres a value proposition here, but also to be very clear about what people have to give up and what the pain points are.

In the beginning, that was painful for people and they didnt want to accept it. But as we got through many of these very challenging transformations, I think the senior leadership throughout the organization became aware that what I had I said — where the journey was going, where the pain points were of the opportunity that we achieved — I think that built credibility that I dont think we were expecting. Originally, we thought people were going to resist to it and we had to get it in place. I think leadership turned around and said, you are doing the right thing. The organization is going where it needs to go and were lowering our operating costs, and you havent pulled out a slide of hand on anything. So when it came time to recruit for a CIO, we did go through a recruitment process, because in the beginning I wasnt going to accept the position. But in the end, there was a lot of support for me to stay, and I decided to keep on with the company.

KG: So by pushing forward with plans and being upfront, you were able to gain the respect of the staff as well as the senior leaders.

Part II coming soon

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