Secret Societies

June 24, 2011
The glitterati have Cannes. Hollywood moguls have Aspen. Now the healthcare elite have Scottsdale, Ariz. Each April, top executives from 40 of the

The glitterati have Cannes. Hollywood moguls have Aspen. Now the healthcare elite have Scottsdale, Ariz. Each April, top executives from 40 of the most influential integrated delivery systems (IDSs) in the country meet under the warm desert sun for the annual convention of the Scottsdale Institute. Highlights of the meeting are the afternoon golf matches. But with a group this high powered, you can bet the air is charged with more than the occasional wayward golf ball.

In the morning’s formal sessions, the top of the top healthcare providers trade war stories and company secrets about how they’re attacking wrenching problems like launching automated ambulatory systems and hospital call centers. Not surprisingly, the small size of the group is by design: Organizers want the membership to be tight-knit enough that secrets stay within the group. "Members don’t want the problems they discuss to appear in the trade media the next day," says Ralph Wakerly, First Consulting Group vice president and program advisor for the Scottsdale Institute.

The Scottsdale Institute is the lowest profile of a handful of elite healthcare organizations that are popping up to help CIOs, CFOs and other executives share problem-solving anecdotes or band together in work groups. Their elite makeup may be impressive, but some healthcare CIOs wonder if Scottsdale and similar associations like the Healthcare Advisory Board, HISEA (pronounced "high sea") and The Odin Group are merely formalized versions of "good ole boy networks." Other CIOs note that exclusivity doesn’t guarantee success. "Sometimes they read the tea leaves, and the tea leaves are wrong," says a member of the Healthcare Advisory Board.

Invitation only
Don’t feel bad if you’ve never heard of the Scottsdale Institute. Unless someone from an Allina Health System, Baylor Health Care System or Catholic Heathcare West tapped you on the shoulder and invited you to join, there’s only a slim chance that you would have run into the organization. It doesn’t conduct membership drives or advertise its services.

Unlike larger groups, like HIMSS, which takes a bigger-is-better approach, Scottsdale Institute directors agonize over how many members are too many. "Maybe the optimum number is 50 to 60 organizations," says co-founder and chairman Stan Nelson.

Small size and membership selectivity results in part by charging expensive fees. In Scottsdale’s case annual dues are $8,500, not including additional fees if a member organization joins one of the working groups.

Scottsdale is the brainchild of healthcare veteran Nelson, who with Don Wegmiller, created the Center for Clinical Integration (CCI) a decade ago. Nelson had just retired as the president and CEO of the Henry Ford Health System and was almost a cult hero among healthcare executives. Under Nelson’s leadership, the Ford organization became a pioneer in expanded ambulatory care and was one of first providers to establish its own HMO. Not surprisingly, other executives pulled Nelson from full retirement with their frequent questions about Ford’s accomplishments. "It quickly became apparent that information technology was becoming the central nervous system for healthcare," Nelson recalls. "I tested the need [for CCI] with 15 CEOs and decided a need existed."

Later, the healthcare consulting powerhouse First Consulting Group, which played a small advisory role with CCI, realized the value of the elite membership for keeping in tune with industry problems. "We see [Scottsdale] as an extension of our research function," says Wakerly. "We think the membership makeup is phenomenal."

In 1997, First Consulting acquired CCI, which changed to its present name (in honor of the site of its annual meetings) to reflect an expanded research charter. Today, First Consulting, which helps fund Scottsdale and provides technical expertise to members, is working to get formal not-for-profit tax status for the Institute.

Where do members come from? Existing members invite new candidates to join. "We look for innovation and organizations that are strong in terms of market position," Nelson says. Administrators say they haven’t shunned many organizations that wanted to join; because the Institute is so low profile, not many IDSs know it exists. "We haven’t had a lot of people applying," says Wakerly.

Those that do become members have at least one fundamental characteristic in common. "Everyone of us is chasing the Holy Grail of becoming an integrated health system," says Ward Keever, CIO of the University of Pennsylvania Health System and a four-year Scottsdale veteran.

When an IDS joins the Institute, it commits the resources of its CEO, CIO, CFO, chief medical officer, among others, in part to build better understanding among business, technical and clinical groups. Although only IDSs now populate the membership rolls, Nelson says the Institute is discussing adding health plans to the roster. "Often times health plans end up not getting the resources they need to manage their own information requirements," Nelson says.

Two groups not likely to travel to the Scottsdale meetings anytime soon are hardware and software vendors. The Institute may look like a one-stop-shopping mart for these companies, but the group shuns them. "We don’t want to become a marketing device for vendors," Nelson says.

Instead of organizing product shoot outs, Scottsdale’s focus is on justifying, building and maintaining IDSs and the information technology components that underpin those systems. Among the high-level questions Scottsdale members grapple with are "How much money for IT is enough?" And, "How can IDSs ensure on-time and under-budget deliveries from IT departments?"

"There’s a growing recognition that organizations are putting money into something they don’t fully understand," says Keever. "Most healthcare organizations have been burned by someone over-promising and under-delivering."

The lines are open
Scottsdale members communicate with each other via a private Web site that posts meetings and working group schedules. A monthly newsletter called Information Edge provides broad analysis and case study summaries for hot healthcare topics like Y2K, security and physician productivity. Additional case study presentations make up most of the formal proceedings at the annual meeting. "Our group is more intimate than a HIMSS, so we can go deeper into these things," Nelson says.

The work groups, or "collaboratives" in Scottsdale parlance, are where general questions turn into nuts-and-bolts solutions. Composed of teams from a subgroup of IDS members, the collaboratives form around specific topics, like automated ambulatory systems. Participants devise business plans, outline budget requirements and determine technical components. Usually, workgroup members are in a similar state of deployment--investigating whether to commit to automated ambulatory systems, for example, or deep into the project and wringing their hands over whether to build the system on top of an enterprise scheduling system or an automated clinical system. Collaborative participants also come from different geographical regions, which eliminates competitive sensitivities when they divulge sensitive information.

Two current working groups are evaluating automated ambulatory systems. One group is searching for a business case that justifies committing resources to such a system. The other group consists of IDSs that have already signed on to building the systems.

Five IDS members work in the latter group and spend their time discussing technologies and techniques that have worked or failed, based on actual experiences. From three to five people from each IDS join the discussions to provide viewpoints from managers, IT staff and clinicians.

One subject currently on the table: What are the benefits and drawbacks of automating physician schedules? "How difficult is it to get physicians to give up their manual schedules? How useful is it? These are the questions we ask of each other, and get answers for," says Larry Grandia, vice president and CIO of Intermountain Health Care, Salt Lake City. "We want to prevent making the same mistakes others have made."

Scottsdale members benefit from specific action plans that come out of collaboratives. For example, Intermountain used technology flow charts, staffing profiles and product lists from other Scottsdale members to design a call center application. But the greatest value in Grandia’s view is creating teams comprised of CIOs and CEOs, who often work in parallel worlds with different goals. "Collaboratives give these two groups a chance to understand each other better," he says.

Grandia adds that IDSs that enjoy a close relationship between business and technical executives typically deploy IT systems more effectively. "In a sense, this is a cultural issue, and collaboratives are a way to blend the two groups," Grandia believes.

Other alternatives
Networking, peer interaction and meetings with industry elites may be alluring for some, but not all IDSs see value in being part of a select healthcare group. One who’s not troubled about being on the outside peering in is Bert Reese, vice president of information technologies at Sentara Norfolk General Hospital, Norfolk, Va., an IDS. Rather than feeding off the case studies and advice of others in the healthcare industry, Reese courts corporations with successful IT strategies in the hotel, petroleum and electronic-commerce arenas.

"Healthcare needs to listen to cross-industry discussions," Reese says. "Most innovation comes from outside the healthcare industry. We could learn a lot from the Texacos and Howard Johnsons. The thing I’m really anxious for is learning innovations from more advanced industries that we can retrofit for healthcare."

He reasons that others have already faced installation glitches when launching wide area networks or when trying to move large-sized data packets across a network. Reese also would like to find a group that could open him up to advanced thinking about e-commerce and Internet applications, but so far, he hasn’t found one.

To compensate, Sentara acts as its own clearinghouse by seeking IT relationships outside of healthcare. When IT people within the organization wanted to learn more about e-commerce, they asked IBM, a high-profile vendor in that industry, for a list of e-commerce pioneers, none of which were in healthcare. Sentara paid technical people from these companies to come to Norfolk and essentially provide a brain dump of e-commerce products and implementation strategies that worked or failed. "We also made the investment to take time after the meetings to go over what we learned so it wouldn’t get lost," Reese says.

Ad-hoc e-commerce seminars were the latest, but not the only, examples of inter-industry collaboration. "We haven’t had an original idea around here in years," Reese quips.

Sentara explored IT reengineering in a similar way. To find the best way for patients to access its insurance and care provider system, the IT staff talked to leaders in the hotel industry. One luxury hotel asks guests to fill out preferences--the newspapers they’d like delivered in the morning or whether the guests preferred a smoking or no-smoking room, among other choices. Once collected, these preferences appear on computer screens at any other of the company’s hotels throughout the country when the guest registers. Sentara put a healthcare spin on this example. The result: "Today, a patient enrolls in our health plan once, and never has to register again," says Reese.

New ideas
Whether you’re part of a high-powered, low-profile association or forging innovations on your own, finding other large organizations that are dealing with problems similar to yours can provide a competitive edge. Membership in a group like the Scottsdale Institute may have its privileges, but so do fresh ideas from outside sources.

"What Keeps You Awake At Night?"

The Scottsdale Institute asked its membership of leading IDSs this question. Some of the top responses were:

*Care management

*Patient access to care

*Y2K strategies

*IT staffing and employee retention

*Impact of carveouts

*Electronic medical records

*Ambulatory medical records

Association Scorecard

THE SCOTTSDALE INSTITUTE ISN’T THEonly organization of elite healthcare providers. Here are some other contenders.

HISEA--The Healthcare Information Systems Executive Association consists of 30 CIOs across the country who act like "good friends who try to help each other out," says founder Ward Keever, who’s also an active member of the Scottsdale Institute. Unlike the Institute, HISEA focuses on CIO issues rather than in team-based problem solving among technical, business and clinical groups. E-mail messages are a prime form of communication, as in a recent series of exchanges where one member solicited advice on how to restructure compensation to hold onto IT employees.

Members also meet for three days each year at an annual convention where each person gets 15 minutes to present "one good idea to the others," says Keever. Past presentations included how to deploy wireless technologies within a provider organization and how to develop a strategic plan.

Want to become part of the HISEA clique? You’ll need patience--the current waiting list has more wannabes than the number of actual members. Once you’re in, you have to remain actively involved in the discussions and attend the annual meetings, or you’ll be bounced out. And membership is for individuals, not for organizations, which means members must reapply if they jump to another healthcare organization.

The Healthcare Advisory Board--Primarily an association for healthcare CEOs, this group works to spot trends in the medical industry before they’re apparent, such as growing patient desires during the salad days of managed care for higher quality and greater choice from provider networks.

The Odin Group--Formed less than a year ago, this healthcare research and advisory organization based in Nashville, Tenn., focuses on both technical and managerial problems. Communications include weekly faxed announcements, a monthly report that analyzes a single IT topic, and quarterly case studies. Unlike the Scottsdale Institute, Odin sometimes solicits input from vendors. (See

Hardly secret or elitist, CHIME and HIMSS represent established industry associations with open membership policies and the alternative to low-profile, closely-held healthcare cliques. CHIME (the College of Healthcare Information Management Executives) counts about 700 members. It offers education programs, which include CIOs and vendors, and twice-a-year CIO forums covering topical IT issues. (See

HIMSS (the Healthcare Information and Management Systems Society) has been around since 1961 and now has more than 10,000 members involved with IT and management systems. Members give the group high marks for networking opportunities and for conventions that allow attendees to "kick the tires of vendor introductions." (See

Alan Joch is a contributing editor to Healthcare Informatics.