A Chat with St. Joseph's New CIO Larry Stofko, Part IV

June 24, 2011
In October, Larry Stofko took the IT helm at St. Joseph Health System. Stofko — promoted into the senior vice president and CIO job at the
In October, Larry Stofko took the IT helm at St. Joseph Health System. Stofko — promoted into the senior vice president and CIO job at the 14-hospital, $3.7 billion not-for-profit Catholic health system — had been with the organization for seven years. Most recently, he served as vice president, IT strategy and innovation. So what’s it like to go from a supporting role to a true leadership position? Recently, HCI Editor-in-Chief Anthony Guerra chatted with Stofko about his new role, and what it takes to be a successful CIO in today’s environment.

Click here for Part I

Click here for Part II

Click here for Part III

AG: With 14 hospitals and eight teams managing those hospitals, what is the procedure for large software buys? For example, if I’m the head of radiology in one of the hospitals and I want a new PACS system, or I’m in finance and I want a new revenue cycle management application, how are those requests handled? How do you get control of 14 hospitals with countless departments where everybody’s got their own specialty, their own point of view, their own needs?

LS: I’ll give you a little background on this. It stems back a little bit towards Y2K when we really tried to do a lock down on inventory, if you will, on what systems we had in place then. Our first version was a little bit more flow-chart oriented with certain hurdles. So if the system, total cost — software, hardware, implementation, project manager, everything — was over $100,000, it had to get through our governance process. And there’s hardly any software system that you can buy that’s going to be less than $100,000 when you count all those components.

We do have local prioritization groups, prioritization councils, if you will, that are kind of the IT steering committees for each of those eight management teams. And those requests need to be approved by that group as a priority, and then sent out to our larger IT steering committee at the system level. So what will cause something to bubble up to that level? If it’s over that $100,000 hurdle; if it’s a new technology, something like RFID, even if it’s lower than $100,000, we would want that to come to this group; or if it’s a non-standard technology. So we did publish a first-cut portfolio, broken by these natural groupings — these are our standard systems in these areas, these are the ones where a standard is under consideration, and these are ones where there’s no standard (you are first out to market or you can pick between multiple systems that are out there). So I think that in our first version we tried to handle that through a flow chart-oriented governance process, and we tried to distill it into maneuvering and navigating through the system to make sure we knew about everything. And that was okay. I mean, it wasn’t a terrible process, and a year ago or so, that’s how I would have described how we did it.

But where we are now, what we’ve done this last year was we tried to flip it more towards the planning process. So last year, we formalized things, and in one of the boxes off to the side of business alignment (download chart below), you’ll see “IT strategy management.” Part of that process is doing an annual review and it is usually a full day off-site session with each of those management teams to do local IT planning. And what we do is we scour all of their existing initiative, and the ones they think people are talking about. We scour their business plans. We work with their local VP of strategic planning or whatever the title might be. And we try to uncover what their business direction is for that local organization, as well as pull out what we think are systems, IT systems, that will be required to support that local strategy. So that creates a list potential initiatives.

And then the third source is the research that we do in the system office IS department, which is identify trends in the country through reading magazines like yours, through working with the advisory group, through Gartner or the advisory board, whoever, we tap into those sources and we say these are potential initiatives that we see coming down the pike, given where healthcare and the healthcare industry is going. An example might be the personal health record, where we know there’s legislation that’s been introduced which would reimburse the physicians $2 for every patient that used a personal health record instead of filling out a clip board. An individual hospital may not know that, but if that law passes, they will certainly see doctors banging on their doors saying can you help me get a personal health record because there’s an incentive for physicians to start to use that. We bring this list and I think that, in some instances, this physician EHR is one of those. Because we knew a year and a half ago that the Stark legislation was going this way, and the hospitals may or may not have heard about that. So that’s kind of the third source. So we work with them, and we aligned those potential initiatives to their strategy, to the health system strategy, to the industry direction. We go through a session where we break out into a clinical group and then a finance and administrative group and they kind of weight on a one-to-10, on a cost and value grid. And that produces a four-quadrant grid that says, ‘These are the systems you really should focus on right now. These are the ones you should look at as longer term investments. These are the ones you should ignore. They’re high cost and low value type thing.’

Then those groups come back together and we create a long-term three to five year strategic road map, but we take that and we ask them to identify the top five and then the next five, and then if they have too many initiatives, we ask them for the next five. We can rank those as high, medium and low, but they’re all high priorities at that point. So what we’ve done with this new model is we then empowered — and this is all captured in our software tool — we empowered those local hospitals, as well as us, to say. ‘Everything you’re doing needs to be on your plan, and it needs to be on your IT portfolio as an active project or something you want to do.’ And that has now become kind of de facto.

If somebody want to do any lab system, they can see if it’s a system standard; they can pull down that initiative; they can see what other hospitals have spent within our health system on that. And we’ve really tried to flip the paradigm so that the focus is on the plan and not the 11th hour. Because what we were finding is that people were trying to justify why a system was so important from a business perspective at the same time they were asking for the money. And that just wasn’t working out very well. People were coming to the table with a $270,000 expenditure and having to try to explain what the system is; what it does, and it’s always this plea bargaining kind of mode; and then they say, ‘By the way, I’m asking you to spend several hundred thousand dollars at the same time.’ What the new process does is it aligns what system you want to implement over the next year; next 24 months; next three to five years, and gets that conversation off the table. It doesn’t even make it to the plan if it doesn’t have justification of why you would do it. And even the healthcare advisory board, in their last year CIO symposium, identified that as the best practice in offsite strategic planning, because it’s tool and software-supported.


G: How many people do you have working on your team overall, not directly reporting to you but in the whole IT team?

LS: About 350.

AG: 350 on the team, how many direct reports do you have?

LS: Six, currently.

AG: Do you think that’s a good number?

LS: I think five or six is probably right. I mean, five might be a little more manageable. I think that in the past five would have been fine, but with this whole focus on the outpatient physician area and the outside-of-the-hospital perspective, you need someone at the table with knowledge of that process.

AG: So that’s six reports, eight teams, 14 hospitals, and 350 total employees?

LS: Yes. And that includes people we have in a consulting role that are filling positions. And I don’t know if you knew or not but we’re outsourced to Perot, so it’s closer to 300 of the people are actually Perot Systems employees.

AG: So 300 of the 350 actually work for Perot?

LS: Yes. The broad numbers would be 300 with Perot, 20 on my team, and then maybe 30 from various consulting firms and project managers that are just implementing projects.

AG: So there’s only about 20 that work directly for the health system?

LS: Right.

AG: Can you tell me your IT budget for the year?

LS: I would say $60 million is probably a good number to use.

AG: Do you think that’s adequate for what you need to do?

LS: One of the priorities that I have on my personal agenda is to get a greater level of IT financial transparency out to the organization. The first thing I’m trying to make sure and uncover is that the amount that we’re spending is on the right things, and that we’re getting the most value for the current budget. Part one is to answer that question, because I think if you go in and say we need more money or we don’t have enough money, inevitably somebody will ask you the question, ‘What are we getting for what we’re spending now?’ So if we’re truly going to embark upon some of these larger initiatives — like the physician electronic health record and the Stark underwriting — we really want to get behind that. Funding for those initiatives does have to come from new additive budget sources. We just can’t get, you know, five percent more efficient in our core budget and expect to pay for these large scale systems when we have 2,000 physicians across our 14 hospitals that we need to penetrate with an electronic record. So I think strategic initiatives do need to be budgeted, above and beyond. While at the same time, we’re trying to be more efficient in giving the best value for our current budget spend.

AG: Those 2,000 docs, are they all non-employees of the health system?

LS: You probably would subtract out about 300 that are in our medical group model.

AG: So 300 work for the hospital?

LS: Well, you have to watch how you describe it, because in California, you can’t employ physicians. We purchase the assets of their medical offices and then sign a long-term contract with them to provide services. So they’re an integrated medical group of physicians.

AG: And then the other 1,700 would be independent?

LS: Yes, and they’re all referring.

AG: Besides Stark, what other major trends are you seeing? What other major initiatives are you working on?

LS: Our one big initiative is to continue rolling out nursing, clinical documentations, and computerized physician order entry. We’re actively engaged in four of our markets, one is furthest along, another one is substantially along, and then there’s the other two that are bringing their pilot units up and will be implementing. So CPOE and nursing documentation are important to us, and that consumes a large number of resources. We’re in the process right now of just making sure we’re doing that as efficiently as possible, that we’re using all our learning and best practices to roll that out most effectively.

From a trend perspective, I think that industry-wide there’s this quest for the large data and repositories to really turn data into information and knowledge and action. The other Microsoft (Amalga) early adopters that I was with recently are New York Presbyterian, Johns Hopkins, Moffitt Cancer Center and Novant, and you have some good organizations that are all coming to this conclusion at the same time of, ‘Yes, we can keep putting in transactional systems and that is still important, but we really need to have some single places to retrieve this information.’ So I do get that as an overall, analytics and business intelligence and data warehousing is definitely a trend.

The other one that we have talked about quite a bit is inpatient and outpatient integration. The other one that I just would add as a personal intrigue or passion of mine is how you, as a CIO, appropriately incorporate, or encourage versus discourage, the inclusion of consumer technology and consumer expectations into the workplace. So things like instant messaging and MySpace and Facebook kind of concepts, things that people are very used to in their daily lives, how can you appropriately incorporate those things into the workplace because they’re becoming more a part of the expectations of how users interact with computers.

AG: When you talk about these things coming into the workplace, do you mean patient care?

LS: I think it would start with collaboration, but it may ultimately end up in patient care with personal health records, and or maybe a hospital sponsoring collaborative communities, just like a Facebook, but maybe for cancer patients, as they tend to network and talk. When you look into the next generation of the work force, it’s going to be even that much more important. I look at my kids, I’ve got one in high school and one in middle school and one in elementary school, and when they get to the workplace, it’s going to be a totally different expectation of technology being seamlessly part of everything they do.

AG: Speaking of your children, how does a CIO keep a good work/life balance, especially one with 14 hospitals?

LS: I think prioritization and trying to shorten the priority list has really been a focus of mine over the last few months with my team. We need to do fewer things that are the most impactful and do them better. The things that are on my pyramid off to the sides, that’s just the surface. That’s just the first cut of what the important things are. I even want to take it down to where there are four or five of these that we really need to focus on as a team. I want to set the whole team’s goal on it, because my second point is to realize you’re part of a larger team, and to count on people in that larger team. As part of the executive team of our health system, I have a new team now. Before, when I was reporting to the CIO, the CIO and my peers were my team. Now, I have a team that includes the CFO, that includes the VP of communications, that includes HR, so the CIO needs to tap on his or her peers and have those peers distribute the accountability. If you pick fewer things that are really the most important things to the organization, then everyone on that executive team should really be supportive. They shouldn’t just be IT initiatives, but their value has to impact the entire organization.

Just personally, the third part of that is a balance in life. I don’t know if that’s partly because we have a mission-based background, but organizationally that has always been something that has been pushed down from the Sisters or from the management team. They’ve made it clear that you have to have that balance of life because it ultimately adds back to the richness of your business life. If I’m here at the office and I have on mind that I haven’t been able to do all these things at home or with my kids and that’s weighing and dragging me down, then I don’t become more productive by pushing those responsibilities off because they’ll still weigh on you. As a person, there has to be a balance.

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