Trustee - Friday February 11, 2005

Making a Commitment to IT
Investing in Information Technology Must Be Part of a Long-Term Strategic Plan

By Jan Greene
Remember when cell phones and personal computers promised to revolutionize our lives? Supposedly, they'd be easy to install and function beyond our wildest dreams. But before long, the shine began to fade when the cell phone cut out during a crucial call, or software conflicts gave a computer the dreaded "blue screen of death," and we lost an important document to "cyberspace." * Most of us have experienced some unintended consequences of information technology (IT), and we've become more realistic about manufacturers' promises. As hospitals have invested in IT, they've run into such problems on a much bigger scale. The unfulfilled promises and unpredictable trouble spots have provided expensive lessons for many, and getting "wired" has been a slower process than originally predicted. Still, many health care organizations are making impressive progress in IT by planning carefully and strategically. And those tasks rest in large part with an active, informed board of trustees. * "This is one of the few things that will come before a board that will be make-or-break," says Lewis Redd, national practice leader for health at Capgemini, a technology consulting firm based in New York City. "A community hospital could spend $30 million or $50 million on this outlay, and the board needs to step up [to its strategic planning responsibilities]."

Creating an IT strategy is a pressing task for hospitals. Information technology contributes greatly to a safe, efficient, competitive future, and the time to start planning and investing in it is now--these are big-ticket items that will take years to pay for and implement. Meanwhile, the pressure is on from influential stakeholders. Payers and regulators increasingly see electronic patient records, computerized physician order entry (CPOE) and medication bar coding as standard technologies that every health care organization should be adopting or committing to now.

The Board's Role: Strategy

IT success doesn't require a board packed with senior vice presidents from computer companies. In fact, most trustees won't be asked to weigh the individual merits of a particular hardware or software package. Instead, hospital management is seeking trustees' vision and philosophy--the same fundamentals that drive the organization in other ways. Does your hospital leap to the front on new ideas or wait and learn from others' experience? What are your goals and priorities for the future, and for the capital budget? The board needs to give management direction on these big-picture questions to help guide their choices for IT planning.

"The board of directors and management have to have a basis from which to go forward or you become susceptible to every trend and every vendor's wish list," advises Gary Miller, senior vice president and chief financial officer of St. Alexius Medical Center in Bismarck, N.D. "It's easy to get lost in the IT wilderness." The 297-bed hospital was named one of the nation's 100 Most Wired hospitals and health systems in 2004 by Hospitals & Health Networks (H&HN) magazine, based on an annual survey of hospitals. (The Most Wired Survey and Benchmarking Study is a joint project of H&HN, IDX Systems Corp., Capgemini and CHIME. The 2005 survey is available from Jan. 15 through March 15 on www.hhnmostwiredsurvey.com.)

For hospital trustees, the way to respond to demands for better safety and quality of care through IT is the same way that all the most important board discussions should be approached: get educated, ask questions, be skeptical.

"Boards are getting more interested in making sure they have the competence to make good decisions," observes Manuel Lowenhaupt, M.D., a vice president of Capgemini. "Though they certainly trust their management team, for decisions of this size their governance responsibility requires them to take a more active role and make sure they're not just rubber-stamping a decision the management team has made."

At the same time, boards have to be careful not to get too involved in the operational side of things. While the board might have final approval on a big electronic medical record system, its evaluation of the project should center around such aspects as the stability of the vendor or the clinical staff's reaction to the proposal, rather than the specifics of the system's design.

"Board members don't want to get involved in which [computer] system is to be used," explains Chuck Reichert, incoming board chair at St. Alexius. "We set the strategic direction." When new projects come to the board level, "we ask whether this is getting us where we want to be. We've never been too shy about asking questions."

Adds Miller, the hospital's CFO: "On the administrative management side, you have to make sure you help educate your board on some of the complexities of providing cost-effective patient care at high quality. You've got to invest some time in your board, and your board has to be able to ask educated questions and hold people accountable."

Size Doesn't Matter

The board's responsibility is consistent, regardless of the hospital's size, according to trustees interviewed in a small sample of hospitals and systems designated as one of H&HN's Most Wired hospitals for 2004. In each case--from a single 182-bed hospital in rural northeastern North Carolina to a huge Catholic system spanning seven states--governing board members described their role relative to IT as strategizing and overseeing the big picture.

At Albemarle Hospital in Elizabeth City, N.C., trustees and hospital administrators have developed an overall strategy for adopting new clinical IT that takes note of the sophisticated competition in nearby cities, but at the same time, doesn't let that pressure push the small regional hospital into unnecessary purchases. "We don't like technology just for the sake of technology," explains Chief Information Officer Ed Ricks. "If it doesn't solve some business problem, we'll stay away from it."

Albemarle CEO Sharon Tanner notes that the strategic plan sets out a process useful for any big capital purchase. "We look at the return on investment and quality implications and patient safety implications," she explains. "We have a team that looks at the whole matrix." Then there's review by physicians and the board.

It's not that different at Sisters of Mercy, a seven-state system based in St. Louis that includes 18 hospitals along with outpatient care, physician practices and a health plan. "We usually work with staff when they bring up an idea they're working on," says Marlon Priest, M.D., an emergency room physician who serves as chair of the Sisters of Mercy board quality committee. "The CEO brings up the idea and explains how it fits into the strategic imperatives we've agreed on. It's usually put on the table as a concept beginning to be fleshed out."

That's how it has worked with the Genesis Project, an ambitious effort to improve patient care through information technology approved by the Sisters of Mercy board in 2004. It is expected to cost about $226 million and encompass technology upgrades throughout the system in clinical, revenue, resource planning and supply chain areas.

Getting such a huge strategic plan going required two or three board meetings over a six- to nine-month period, says Priest. Well aware of the tremendous cost involved, the board acted carefully, asking questions about potential job losses from the new technology and how well doctors were likely to accept the changes in clinical systems. Much of a December board retreat was spent on fleshing out the original Genesis Project plan.

"Given the cost of this, when margins are 2 or 3 or 4 percent, that's a pretty scary proposition," Priest says. "We don't control the vendors and the technology and how it develops. We think a lot about how things could go wrong." At the same time, the Sisters of Mercy board doesn't see how it can ignore the electronic revolution, something of which health care has been slow to take advantage. "I firmly believe we cannot fulfill our safety and quality responsibilities unless we use technology as an enabler to improve our systems and individual clinicians," Priest says. "It's a risk like the ones taken by the early developers of cardiac surgery or antibiotics. We don't have any alternative but to take it and try to control it."

Different Hospitals, Different Strategies

Maimonides Medical Center in the Brooklyn borough of New York City, is an example of a hospital that took control of its IT in a big way, making a long-term commitment to spend nearly half its yearly capital budget on IT purchases, well above the average hospital. For Maimonides, it's a matter of playing catch-up, but in a systematic way.

Ten years ago the aging facility was well behind the technology curve, explains long-time board chair Martin Payson. "We had no choice," he says. "The old systems had just broken down at that point. I had just become a new board leader, and we had a new administration, and our thinking was identical. We couldn't do it halfheartedly ... we had to go into it wholeheartedly."

This meant investing early on in physician training on the new clinical systems. "We provided 24-hour, seven-day-a-week training for the doctors, available on their time, not ours, and that's expensive. But it turned out to be a very wise investment," Payson explains.

As a result, the 705-bed Maimonides is now one of the most wired hospitals around with its comprehensive electronic patient record and an order entry system that is used by nearly all its physicians. And the board of trustees was a key to getting it done. "We leapfrogged from virtually nowhere to a leading hospital," Payson says. "The board has been very supportive of computerizing every place that we can."

Similarly, at St. Alexius, the organization has been on a long journey of carrying out a strategy and building on it. More than a decade ago, the organization established a philosophy that it would base its systems on Linux or Unix, giving it the flexibility to buy the best hardware from any vendor. To that, it added a fiber optic backbone (see glossary on previous page)s throughout the facility. "Once we had that infrastructure, it made it a lot easier for us to control the things that are being adopted to meet the board's strategic directive," says CFO Miller.

The board and the IT staff decided early on that even though the hospital was committed from the beginning to building its infrastructure, it would not try to be on the cutting edge of new technologies, such as CPOE. "We will not be an early adopter of that technology," Miller says. "We're going to let some of the software be tested and some of the implementation be sorted out before we invest significant dollars in that regard. That's a corporate strategy that surrounds our overall strategy."

It's not that the hospital lacks the technical expertise to pull it off. In fact, St. Alexius already has an order entry system in place that can be used by nurses at the bedside. And hospital leaders are acutely aware that the Leapfrog Group has set CPOE as one of its standards for hospitals to meet as a marker of quality and patient safety. But St. Alexius has chosen to bring CPOE along more slowly, planning for full use by 2007. "The major hang-up has not been the technology, it's been the physician adoption and the capability of making it time-neutral for them," Miller explains. "We've got a 110-year culture where the physicians have been independent; they're good practitioners and we've got all kinds of quality awards showing we're in the top 5 percent of hospitals. We have to come to them with something that works."

Potential Pitfalls

With clinical systems, which are most closely related to the current push to improve patient safety, getting buy-in from physicians and nurses has been the biggest stumbling block for many organizations. Newspaper headlines across the country tell stories of hospitals that scrapped million-dollar computer systems because they simply didn't work in the real world. Every hospital wants to avoid that kind of waste of money, time, energy, and physician and employee good will--and the board can help, Capgemini consultants Lowenhaupt and Redd say. Typical missteps they see often involve underestimating the size and cost of IT projects. "They typically take two-plus times as long" as expected, says Redd. Here are some of the specific pitfalls that can bedevil a hospital making a big IT investment:

- Relying on vendors for implementation

"Some of the vendors of software are very good at writing software but not as good at implementing their own products in a large hospital," Lowenhaupt says. Be sure there's a realistic plan for implementation and that the internal information systems (IS) department can handle it with help from the vendor. Find out how previous "go-lives" have gone with the vendor's products.

- Minimizing the importance of process change

Technology is not the answer to a poorly designed process and could just make it worse. "You should ... look at what type of process and workflow redesign is needed, early on," says Redd.

- Allowing a mishmash of vendors' products

Capgemini suggests a core vendor approach, where the system is based on one vendor's product, and further applications are added one at a time.

- Accepting unrealistic promises from vendors

"I get very anxious when I hear a vendor say, 'This will save your docs and nurses time,' or 'There will be zero downtime,'" Lowenhaupt says. Board members should probe what exactly is meant by those types of sweeping statements.

- Ignoring clinicians' input

It's also unnerving, Lowenhaupt says, when the board is presented with a new system by the IT staff alone. "If there are some leading doctors and nurses in the room, I feel better," he says. And it's important to choose the right clinicians to lead the way. The chief of staff might not be as influential with other doctors as the hospital's busiest and best doctor--and this can cause some medical staffs "some real division," he says.

For example, at one hospital, a senior internal medicine physician said CPOE could be introduced into the hospital "over his dead body." "Considering that this organization is spending tens of millions of dollars, that came as ... a disappointing conversation," Lowenhaupt says. "They [the board and administration] hadn't gone out to their front-line busy folks and run this by them."

He adds that purchasing and implementing IT to replace traditional clinical methods "is very complex stuff and reasonably high-risk, and there's a poor ability to predict an outcome. If you don't spend a lot of time mitigating the risk and investing with discipline and rigor, there's a reasonable likelihood that you will be disappointed. This is the time for you to do your homework as a board. Don't rush into these decisions without a lot of thought."

While it's important to rely on expert advice that you trust--possibly from an outside party--board members who are not hard-core techies shouldn't be intimidated by the technology. "Don't take a backseat and think this is a tech issue [and] let the tech guy handle it. It's not, it's a business issue and a large [risk] these community hospitals are going to take," warns Redd. "You don't have to be an expert to see that a good decision is made."

Sticking with the Commitment

While the rhetoric about information technology revolutionizing health care is probably overblown, at its core are some essential truths: health care really will be safer with electronic systems backing up human decision-makers, and, ultimately, more efficient as both financial and clinical information are shared quickly and easily.

But because these systems involve such huge cultural change, implementation is often bumpy and unpredictable. Lowenhaupt sees a typical pattern where the organization first enjoys a peak of unreasonably high expectations, naively believing the system will solve all its patient safety and quality issues. "Then they drop to a valley of despair. They have to move to the point where they realize [technology] doesn't solve patient safety [problems], it's simply a tool we can use. One of the tasks the board [has] is to dampen that peak of unreasonable expectation and bring up that valley of despair."

The board can also help by sticking to its commitment as time goes on and competing priorities challenge the IT expansion plan. "The board has to have the will and the staying power to say this is important strategically to our organization," says Sisters of Mercy trustee Priest. "When margins are down a little or someone says they really want to build a new building, we have to say, 'We've said as an organization we are going to make a big investment in an information system, and it's going to improve patient care. This is our big commitment.'"

Jan Greene is a writer based in Alameda, Calif.