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Chapter 12 IT Alignment and Strategic Planning

Learning Objectives

To be able to understand the importance of an IT strategic plan.

To review the components of the IT strategic plan.

To be able to understand the processes for developing an IT strategy.

To be able to discuss the challenges of developing an IT strategy.

To describe the Gartner Hype Cycle recognizing the wide range of emerging technologies at various stages of maturity.

Information technology (IT) investments serve to advance organizational performance. These investments should enable the organization to reduce costs, improve service, enhance the quality of care, and, in general, achieve its strategic objectives. The goal of IT alignment and strategic planning is to ensure a strong and clear relationship between IT investment decisions and the health care organization's overall strategies, goals, and objectives. For example, an organization's decision to invest in a new claims adjudication system should be the clear result of a goal of improving the effectiveness of its claims processing process. An organization's decision to implement a care coordination application should be a consequence of its population health management strategy.

Developing a sound alignment can be very important for one simple reason—if you de�ine the IT agenda incorrectly or even partially correctly, you run the risk that signi�icant organizational resources will be misdirected; the resources will not be put to furthering strategically important areas. This risk has nothing to do with how well you execute the IT direction you choose. Being on time, on budget, and on speci�ication is of little value to the organization if it is doing the wrong thing!

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12.1 IT Planning Objectives The IT strategic planning process has several objectives:

To ensure that information technology plans and activities align with the plans and activities of the organization; in other words, the IT needs of each aspect of organizational strategy are clear, and the portfolio of IT plans and activities can be mapped to organizational strategies and operational needs

To ensure that the alignment is comprehensive; in other words, each aspect of strategy has been addressed from an IT perspective that recognizes not all aspects of strategy have an IT component, and not all components will be funded

To identify non-IT organizational initiatives needed to ensure maximum leverage of the IT initiative (for example, process reengineering)

To ensure that the organization has not missed a strategic IT opportunity, such as those that might result from new technologies

To develop a tactical plan that details approved project descriptions, timetables, budgets, staf�ing plans, and plan risk factors

To create a communication tool that can inform the organization of the IT initiatives that will and will not be undertaken

To establish a political process that helps ensure the plan results have suf�icient organizational support

At the end of the alignment and strategic-planning process, an organization should have an outline that at a high level resembles Table 12.1 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-2#c12-tbl-0001) . With this outline, leadership can see the IT investments needed to advance each of the organization's strategies. For example, the goal of improving the quality of patient care may lead the organization to invest in databases to measure and report quality, predictive algorithms to identify patients at risk of readmission, and the EHR.

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Table 12.1 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-2#backT1) IT initiatives linked to organizational goals

Goal IT Initiatives

Research and education Research patient data registry Genetics and genomics platform Grants management

Patient care: quality improvement Quality measurement databases Order entry Electronic health record

Patient care: sharing data across the system Enterprise master person index Clinical data repository Common infrastructure

Patient care: non-acute services Nursing documentation Transition of care

Financial stability Revenue system enhancements Payroll-personnel system Cost accounting

In many ways the content of Table 12.1 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-2#c12- tbl-0001) is deceiving. It presents a tidy, orderly linkage between the IT agenda and the strategies of the organization. One might assume this linkage is established through a linear, rational, and straightforward series of steps. But the process of arriving at a series of connections similar to those in Table 12.1 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-2#c12-tbl-0001) is complex, iterative, and at times driven by politics and instincts.

The development of well-aligned IT strategies has been notoriously dif�icult for many years, and there appears to be no reason such an alignment will become signi�icantly easier over time.

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12.2 Overview of Strategy Strategy is the determination of the basic long-term goals and objectives of an organization, the adoption of the course of action, and the allocation of resources necessary to carry out those actions (Chandler, 1962). Strategy seeks to answer questions such as, where does this organization need to go, and how will it get there? Where should the organization focus its management attention and expenditures?

The development of an organization's strategy has two major components: formulation and implementation (Henderson & Venkatraman, 1993).

Formulation Formulation involves making decisions about the mission and goals of the organization and the activities and initiatives it will undertake to achieve them. Formulation could involve determining the following:

Our mission is to provide high-quality medical care.

We have a goal of reducing the cost of care while at least preserving the quality of that care.

One of our greatest leverage points lies in reducing inappropriate and unnecessary care.

To achieve this goal, we will emphasize reducing the number of inappropriate radiology procedures.

We will carry out initiatives that enable us to intervene at the time of procedure ordering if we need to suggest a more cost-effective modality.

We can imagine other goals directed toward achieving this mission. For each goal, we can envision multiple leverage points, and for each leverage point, we may see multiple initiatives. The result is an inverted tree that cascades from our mission to a series of initiatives.

Formulation involves understanding competing ideas and choosing between them. In our example, we could have arrived at a different set of goals and initiatives.

We could have decided to improve quality with less emphasis on care costs. We could have decided to focus on reducing the cost per procedure. We could have decided to produce retrospective reports of radiology use by provider and used this feedback to lead to ordering behavior change rather than intervening at the time of ordering.

In IT, we also have a need for formulation. In keeping with an IT mission to use the technology to support improvement of the quality of care, we may have a goal to integrate our clinical application systems. To achieve this goal, we may decide to follow any of the following initiatives:

Provide a common way to access all systems (single sign-on).

Interface existing heterogeneous systems.

Require that all applications use a common database.

Implement a common suite of clinical applications from one vendor.

Implementation Implementation involves making decisions about how we structure ourselves, acquire skills, establish organizational capabilities, and alter organizational processes to achieve the goals and carry out the activities we have de�ined during formulation of our strategy. For example, if we have decided to reduce care costs by reducing inappropriate procedure use, we may need to implement one or more of the following:

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An organizational unit of providers with health services research training to analyze care practices and identify de�iciencies

A steering committee of clinical leadership to guide these efforts and provide political support

A provider order entry system to provide real-time feedback on order appropriateness

Data warehouse technologies to support analyses of utilization

Using our clinical applications integration example, we may come to one of the following determinations:

We need to acquire interface engine technology, adopt HL7 standards, and form an information systems department that manages the technology and interfaces applications.

We need to engage external consulting assistance for the selection of a clinical application suite and hire a group to implement the suite.

The implementation component of strategy development is not the development of project plans and budgets. Rather, it is the identi�ication of the capabilities, capacities, and competencies the organization will need if it is to carry out the results of the formulation component of strategy.

Vectors for Arriving at IT Strategy The IT strategy is developed using some combination of four IT strategy vectors:

Organizational strategies

Continuous improvement of core processes and information management

Examination of the role of new information technologies

Assessment of strategic trajectories

By a vector we mean the choice of perspectives and approaches through which an organization determines its IT investment decisions. For example, the �irst vector (derived from organization strategies) involves answering a question such as, “Given our strategy of improving patient safety, what IT applications will we need?” However, the third vector (determined by examining the role of new information technologies) involves answering a question such as, “There is a great deal of discussion about cloud-based applications. Does this approach to delivering applications provide us with ways to be more effective at addressing some of our organization challenges?” Figure 12.1 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-3#c12-�ig-0001) illustrates the convergence of these four vectors into a series of iterative leadership discussions and debates. These debates lead to an IT agenda.

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Figure 12.1 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-3#backF1) Overview of IT strategy development

IT Strategies Derived from Organizational Strategies The �irst vector involves deriving the IT agenda directly from the organization's goals and plans. For example, an organization may decide it intends to become the low-cost provider of care. It may decide to achieve this goal through implementation of disease management programs, the reengineering of inpatient care, and the reduction of unit costs for certain tests and procedures it believes are inordinately expensive.

The IT strategy development then centers on answering questions such as, “How do we apply IT to support disease management?” The answers might involve web-based publication of disease management protocols for use by providers, business intelligence technology to assess the conformance of care practice to the protocols, provider documentation systems based on disease guidelines, and CPOE systems that employ the disease guidelines to in�luence ordering decisions. An organization may choose all or some of these responses and develop various sequences of implementation. Nonetheless, it has developed an answer to the question of how to apply IT in support of disease management.

Most of the time the linkage between organizational strategy and IT strategy involves developing the IT rami�ications of organizational initiatives, such as adding or changing services and products, growing market share, improving service, streamlining processes, or reducing costs. At times, however, an organization may decide it needs to change or add to its core characteristics or culture. The organization may decide it needs its staff members to be more care-quality or service- delivery or bottom-line oriented. It may decide it needs to decentralize or recentralize decision making. It may decide to improve its ability to manage knowledge, or it may not. These characteristics (and there are many others) can point to initiatives for IT.

In cases in which characteristics are to be changed, IT strategies must be developed to answer questions such as, “What is our basic IT approach to supporting a decentralized decision-making structure?” The organization might answer this question by permitting decentralized choices of applications as long as those applications meet certain standards. (For example, they may run on a common infrastructure or support common data standards.) It might answer the question of how IT supports an emphasis on knowledge management by developing an intranet service that provides access to preferred treatment guidelines.

IT Strategies to Continuously Improve Core Processes and Information Management All organizations have a small number of core processes and information management tasks that are essential for the effective and ef�icient functioningof the organization. For a hospital these processes might include ensuring patient access to care, ordering tests and procedures, and managing the revenue cycle. For a restaurant these processes might include menu design, food preparation, and dining room service. For a health plan, information management needs might point to a requirement to understand the costs of care or the degree to which care practices vary by physician.

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Using the vector of continuous improvement of core processes and information management to determine IT strategies involves de�ining the organization's core processes and information management needs. The organization measures the performance of core processes and uses the resulting data to develop plans to improve its performance. The organization de�ines core information needs, identi�ies the gap between the current status and its needs, and develops plans to close those gaps. These plans will often point to an IT agenda. This vector may be a result of a strategy discussion, although this is not always the case. An organization may make ongoing efforts to improve processes regardless of the speci�ics of its strategic plan. For example, every year it may establish initiatives designed to reduce costs or improve services. The organization has decided that, regardless of a speci�ic strategy, it will not thrive if core processes and information management are something other than excellent.

Table 12.2 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-3#c12-tbl-0002) illustrates a process orientation. It provides an organization with data on the magnitude of some problems that plague the delivery of outpatient care. These problems af�lict the processes of referral, results management, and test ordering. The organization may decide to make IT investments in an effort to reduce or eliminate these problems. For example, strengthening the decision support for e-prescribing could reduce the prevalence of adverse drug events (ADEs). Abnormal test results could be highlighted in the EHR to help ensure patient follow-up.

Table 12.2 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-3#backT2) Summary of the scope of outpatient care problems

For every: There appear to be:

1,000 patients coming in for outpatient care 14 patients with life-threatening or serious ADEs

1,000 outpatients who are taking a prescription drug

90 patients who seek medical attention because of drug complications

1,000 prescriptions written 40 prescriptions with medical errors

1,000 women with a marginally abnormal mammogram

360 who will not receive appropriate follow-up care

1,000 referrals 250 referring physicians who have not received follow- up information four weeks later

1,000 patients who quali�ied for secondary prevention of high cholesterol

380 will not have an LDL-C on record within three years

When this vector is used, the IT agenda is driven at least in part by a relentless year-in, year-out focus on improving core processes and information management needs.

IT Strategies That Rely on New IT Capabilities The third vector involves considering how new IT capabilities may enable a new IT agenda or signi�icantly alter the current agenda. For example, telemedicine capabilities may enable the organization to consider a strategy of extending the reach of its specialists across its catchment area to improve its population health efforts. Data-mining algorithm advances might enable an organization to assess different treatment approaches to determine which approaches lead to the best outcomes.

In this vector, the organization examines new applications and new base technologies and tries to answer the question, “Does this application or technology enable us to advance our strategies or improve our core processes in new ways?” For example, advances in sensors and mobile applications might lead the organization to think of new approaches to providing feedback to the chronically ill patient. Holding new technologies up to the spotlight of organizational interest can lead to decisions to invest in a new technology.

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An extreme form of this mechanism occurs when a new technology or application suggests that fundamental strategies (or even the organization's existence) may be called into question or may need to undergo signi�icant transformation. In general these strategies lead to a decision to adopt a new business model. A business model is the combination of an organization's decisions about what it will do, how it will do it, and why “the what and how” are of such value that customers will pay them.

For example, Uber's business model is that it will get you from point A to point B (the what) but it will do so in a way that involves “renting” capacity from drivers already on the road and making the process of ordering a ride and paying for a ride very easy (the how). The what for Uber is no different than that for a traditional taxi company but the how is very different. Uber's superior business model was made possible by new information technologies—the web, mobile devices, and advanced analytics.

Perspective Internet of Things

The Internet of Things is a class of information technology that has several components; things (people, buildings, equipment, etc.); sensors attached to the things (sensors that measure heat, acidity, movement, etc.); processors that read and interpret sensor data; and a network (the Internet usually) that connects sensors and processors to cloud- based (usually) analytics.

There are several potential uses of the Internet of Things in health care:

Monitor equipment utilization and performance; for example, is a part in the MRI about to fail?

Supply management; for example, where is a supply in its transit to the hospital?

Monitoring of environmental data; for example, what is the humidity outside?

Monitoring the physiological status of a patient; for example, is the patient's blood sugar level too low?

Process orchestration; for example, is the orderly who needs to take the patient to radiology on her way?

In an IT strategy discussion, these questions could be raised:

What is the Internet of Things?

What are the possible uses and are those uses mature?

Does the Internet of Things help us advance strategies or suggest new strategies?

If so, what do we do?

IT Strategies Based on Assessment of Strategic Trajectories Organization and IT strategies invariably have a �ixed time horizon and �ixed scope. These strategies might cover a period of time two to three years into the future. They outline a bounded set of initiatives to be undertaken in that time period. Assessment of strategic trajectories asks the questions, What do we think we will be doing after that time horizon and scope? Do we think we will be doing very different kinds of things, or will we be carrying out initiatives similar to the ones we are pursuing now?

For example, we might be planning to implement a broad portfolio of health care information technology. The organization believes that through medical advances and preventive care the number of patients older than one hundred will increase dramatically. The strategic trajectory discussion asks, “Does this increase in longevity have signi�icant implications for the types of health care that we deliver and hence on the types of information technology that we implement?”

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Or we might be in the process of using IT to support joint clinical programs with other hospitals in the area. These efforts would be greatly helped by the availability of broad interoperability. However, such pervasive interoperability has proved elusive and may be elusive for a decade. How would pervasive interoperability affect our IT strategy?

The strategic trajectory discussion can be highly speculative. It might be so forward looking and speculative that the organization decides not to act today on its discussion. Yet it can also point to initiatives to be undertaken within the next year to better understand this possible future and to prepare the organization's information systems for it. For example, if we believe our information systems will eventually need to store large amounts of genetic information, it would be worth understanding whether the new population health systems we will be selecting soon will be capable of storing and analyzing these data.

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12.3 The IT Assest The discussion of vectors and alignment up to this point has focused generally on the development of an application agenda as the outcome. In other words, the completion of the IT strategy discussion is an inventory of systems, such as the EHR system, customer relationship management system, and an enterprise data warehouse, that are needed to further overall organizational strategies. However, the application inventory is a component of the larger idea of the IT asset. These areas are discussed in the following sections.

The IT asset is composed of those IT resources that the organization has or can obtain and that are applied to further the goals, plans, and initiatives of the organization. The IT strategy discussion identi�ies speci�ic changes or enhancements to the composition of the asset—for example, the implementation of a new application—and general properties of the asset that must exist—for example, high reliability of the infrastructure. The IT asset has four components: applications, infrastructure, data, and IT staff members.

Applications Applications are the systems that users interact with: for example, scheduling, billing, and EHR systems. In addition to developing an inventory of applications, the organization may need to develop strategies regarding properties of the overall portfolio of applications.

For example, if the organization is an integrated delivery system, decisions will need to be made about the degree to which applications should be the same across the organization. E-mail systems ought to be the same, but is there a strategic reason to have the same pharmacy system across all hospitals? Should an organization buy or build its applications? Building applications is risky and often requires skills that most health care organizations do not possess. However, internally developed applications can be less expensive and can be tailored to an organization's needs.

Strategic thinking may center on the form and rigor of the justi�ication process for new applications. Formal return on investment analyses may be emphasized so that all application decisions will emphasize cost reduction or revenue gain. Or the organization may decide to have a decision process that takes a more holistic approach to acquisition decisions, so that factors such as improving quality of care must also be considered.

In general, strategy discussions surrounding the application asset as a whole focus on, in addition to the application inventory, a few key areas:

Sourcing. What are the sources for our applications? And what criteria determine the source to be used for an application? Should we get all applications from the same vendor or will we use a small number of approved vendors?

Application uniformity. For large organizations with many subsidiaries or locations, to what degree should our applications be the same at all locations? If some have to be the same but some can be different, how do we decide where we allow autonomy? This discussion often involves a trade-off between local autonomy and the central desire for ef�iciency and consistency.

Application acquisition. What processes and steps should we use when we acquire applications? Should we subject all acquisitions to rigorous analyses? Should we use a request for proposal for all application acquisitions? This discussion is generally an assessment of the extent to which the IT acquisition process should follow the degree of rigor applied to non-IT acquisitions (of diagnostic equipment, for example).

Infrastructure Infrastructure needs may arise from the strategic-planning process. An organization desiring to extend its IT systems to community physicians will need to ensure that it can deliver low-cost and secure network connections. Organizations placing signi�icant emphasis on clinical information systems must ensure very high reliability of their infrastructure; computerized provider order entry systems cannot go down.

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In addition to initiatives designed to add speci�ic components to the infrastructure—for example, new software to monitor network utilization—architecture strategies will focus on the addition or enhancement of broad infrastructure capabilities and characteristics.

Capabilities are de�ined by completing this sentence: “We want our applications to be able to …” Organizations might complete that sentence with phrases such as “be accessed from home,” “have logic that guides clinical decision making,” or “share a pool of consistently de�ined data.”

Characteristics refer to broad properties of the infrastructure, such as reliability, security, agility, supportability, integratability, and potency. An organization may be heading into the implementation of mission-critical systems and hence must ensure very high degrees of reliability in its applications and infrastructure. The organization may be concerned about the threats posed by ransomware and denial of service attacks and decide to strengthen the security of its infrastructure. The asset plans in these cases involve discussions and analyses that are intended to answer the question, What steps do we need to take to signi�icantly improve the reliability of our systems or improve security?

Data Data and information were discussed in Chapter Two (c02.xhtml) . Strategies concerning data may center on the degree of data standardization across the organization, accountability for data quality and stewardship, data sources, and determination of database management and analyses technologies.

Data strategy conversations may originate with questions such as, We need to better understand the costs of our care. How do we improve the linkage between our clinical data and our �inancial data? Or, we have to develop a much quicker response to outbreaks of epidemics. How do we link into the city's emergency rooms and quickly get data on chief complaints?

In general, strategies surrounding data focus on acquiring new types of data, de�ining the meaning of data, determining the organizational function responsible for maintaining that meaning, integrating existing sets of data, and obtaining technologies used to manage, analyze, and report data.

IT Staff Members IT staff members are the analysts, programmers, and computer operators who, day in and day out, manage and advance information systems in an organization. IT staff members were discussed in Chapter Eight (c08.xhtml) . IT strategy discussions may highlight the need to add IT staff members with speci�ic skills, such as mobile application developers and population health implementation staff members. Organizations may decide that they need to explore outsourcing the IT function in an effort to improve IT performance or obtain dif�icult-to-�ind skills. The service orientation of the IT group may need to be improved.

In general, the IT staff member strategies focus on the acquisition of new skills, the organization of the IT staff, the sourcing of the IT staff, and the characteristics of the IT department—is it, for example, innovative, service oriented, and ef�icient?

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12.4 A Normative Approach to Developing Alignment and IT Strategy You may now be asking yourself, how do I bring all of this together? In other words, is there a suggested approach an organization can take to develop its IT strategy that takes into account these various vectors? And by the way, what does an IT strategic plan look like?

Across health care organizations the approaches taken to developing, documenting, and managing an IT strategy are quite varied. Some organizations have well-developed, formal approaches that rely on the deliberations of multiple committees and leadership retreats. Other organizations have remarkably informal processes. A small number of medical staff members and administrative leaders meet in informal conversations to de�ine the organization's IT strategy. In some cases the strategy is developed during a speci�ic time in the year, often preceding development of the annual budget. In other organizations, IT strategic planning goes on all the time and permeates a wide range of formal and informal discussions.

There is no single right way to develop an IT strategy and to ensure alignment. However, the process of developing IT strategy should be similar in approach and nature to the process used for overall strategic planning. If the organization's core approach to strategy development is informal, its approach to IT strategy development should also be informal.

Recognizing this variability, a normative approach to the development of IT strategy can be described.

Strategy Discussion Linkage Organizational strategy is generally discussed in senior leadership meetings. These meetings may focus speci�ically on strategy, or strategy may be a regular agenda item. These meetings may be supplemented with retreats centered on strategy development and with task forces and committees that are asked to develop recommendations for speci�ic aspects of the strategy. (For example, a committee of clinical leadership members might be asked to develop recommendations for improving patient safety.) These discussions will examine the organization's external environment —such as changes in reimbursement and competitive position—and internal environment—such as operational ef�iciency, �inancial health, and clinical strengths. This examination invariably results in the identi�ication of gaps between the organization's desired position and role and its current status. This examination usually includes a review of the status and capabilities of the organization's IT capabilities and application portfolio.

Regardless of their form, the organization's CIO should be present at such meetings or kept informed of the discussion and its conclusions. If task forces and committees supplement strategy development, an IT manager should be asked to be a member. The CIO (or the IT member of a task force) should be expected to develop an assessment of the IT rami�ications of strategic options and to identify areas where IT can enable new approaches to carrying out the strategy.

The CIO will not be the only member of the leadership team who will perform this role. Chief �inancial of�icers (CFOs), for example, will frequently identify the IT rami�ications of plans to improve the revenue cycle. However, the CIO should be held accountable for ensuring the linkage does occur.

As strategy discussions proceed, the CIO must be able to summarize and critique the IT agenda that should be put in place to carry out the various aspects of the strategy. Exhibit 12.1 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-5#c12-exh-0001) displays an IT agenda that might emerge. Exhibit 12.2 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-5#c12-exh-0002) displays a health plan IT agenda that could result from a strategy designed to improve patient access to health information and self-service administrative tasks for a health plan.

Exhibit 12.1 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-5#backE1) IT Initiatives Necessary to Support a Strategic Goal for a Provider

Article I. Strategic Goal

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Improve service to outpatients

Article II. Problem

Patients have to call many locations to schedule a series of appointments and services.

The quality of the response at these locations is highly variable.

Locations inconsistently capture necessary registration and insurance information.

Some locations are over capacity, whereas others are underutilized.

Article III. IT Solution

Common scheduling system for all locations

A call center for “one-stop” access to all outpatient services

Development of master schedules for common service groups such as preoperative testing

Integration of scheduling system with electronic data interchange connection to payers for eligibility determination, referral authorization, and copay information

Patient support material, such as maps and instructions, to be mailed to patients

Exhibit 12.2 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-5#backE2) IT Initiatives Necessary to Support a Strategic Goal for a Health Plan

Article IV. Strategic Goal

Improve service to subscribers

Reduce costs

Article V. Problem

Subscribers have dif�iculty �inding high-quality health information.

The costs of performing routine administrative transactions such as change of address and responding to bene�its questions is increasing.

Subscriber perceptions of the quality of service in performing these transactions is low.

Article VI. IT Solution

A plan portal that provides:

Health content from high-quality sources

Access to chronic disease services and discussion groups

Subscriber ability to use self-service to perform routine administrative transactions

Subscriber access to bene�it information

Functions that enable subscribers to ask questions

Plan ratings of provider quality

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A plan-sponsored provider portal that enables:

Subscribers to conduct routine transactions with their provider, such as requesting an appointment or renewing a prescription

Electronic visits for certain conditions such as back pain

Subscribers to ask care questions of their provider

IT Liaisons All major departments and functions (for example, �inance, nursing, and medical staff administration) should have a senior IT staff person who serves as the function's point of contact. Because these functions examine ways to address their needs (for example, lower their costs and improve their services), the IT staff person can work with them to identify IT activities necessary to carry out their endeavors. This identi�ication often emerges with recommendations to implement new applications that advance the performance of a function, such as a medication administration record application to improve the nursing work�low. Exhibit 12.3 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-5#c12-exh-0003) provides an example of output from a nursing leadership discussion on improving patient safety through the use of a nursing documentation system.

New Technology Review The CIO should be asked to discuss, as part of the strategy discussion or in a periodic presentation in senior leadership forums, new technologies and their possible contributions to the goals and plans of the organization. These presentations may lead to suggestions that the organization form a task force to closely examine a new technology. For example, a multidisciplinary task force could be formed to examine the ability of telehealth to support the organization's strategies. Table 12.3 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-5#c12-tbl-0003) provides an overview of different types of telehealth and an overall assessment of strategic importance.

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Table 12.3 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-5#backT3) Assessment of telehealth strategic opportunities

Type of Telehealth

Potential Strategic Value Level of Support of Organization's Strategy

Semi-urgent care

Enables patients to reach a clinician at any time to get advice on addressing low acuity health issues, for example, a modest fever of a child

Moderate

Remote patient monitoring

Supports efforts to manage patient's with a chronic disease High

Fitness monitoring

Provides information on a patient's exercise program Low

Visit substitution

Supports conducting visits, for example, surgery follow-up through video rather than requiring a face-to-face visit

High

Clinician consultation

Enables clinicians to seek a consult from a remote specialist High

Critical care Provides ability to perform remote stroke assessments and ICU monitoring

Moderate

Exhibit 12.3 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-5#backE2) System Support of Nursing Documentation

Section 6.1. Problem Statement

Both the admitting physician(s) and nurse document medication history in their admission note.

Points of failure have been noted:

Incompleteness due to time or recall constraints, lack of knowledge, or lack of clear documentation requirements

Incorrectness due to errors in memory, transcription between documents, and illegibility

Multiple inconsistent records due to failure to resolve con�licting accounts by different caregivers

Most of the clinical information required to support appropriate clinician decision making is obtained during the history-taking process.

Section 6.2. Technology Interventions and Goals

A core set of clinical data should be made available to the clinician at the point of decision making:

Demographics

Principle diagnoses and other medical conditions

Drug allergies

Current and previous relevant medications

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Laboratory and radiology reports

Required information should be gathered only once:

Multidisciplinary system of structured, templated documentation

Clinical decision support rules, associated to speci�ic disciplines, should guide gathering

Work�low should support the mobile care giver with integrated wireless access to clinical information

Needed applications could be implemented in phases:

Nursing admission assessment

Multidisciplinary admission assessment

Planning and progress

Nursing discharge plan

Multidisciplinary discharge plan

Synthesis of Discussions The CIO should be asked to synthesize or summarize the conclusions of these discussions. This synthesis will invariably be needed during development of the annual budget. And the synthesis will be a necessary component of the documentation and presentation of the organization's strategic plan. Table 12.4 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-5#c12-tbl-0004) presents an example of such a synthesis.

Table 12.4 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-5#backT4) Summary of IT strategic planning

Strategic Challenge IT Agenda

Capacity and growth management Emergency department tracking Inpatient electronic bed board Ambulatory clinic patient tracking

Quality and safety Inpatient order entry Anticoagulation therapy unit Online discharge summaries Medication administration record

Performance improvement Registration system overhaul Anatomic pathology Pharmacy Order communication Transfusion and donor services

Budget management and external reviews Disaster recovery Joint Commission preparation Privacy policy review

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The organization should expect the process of synthesis will require debate and discussion; for example, trade-offs will need to be reviewed, priorities set, and the organization's willingness to implement embryonic technologies determined. This synthesis and prioritization process can occur during the course of leadership meetings, through the work of a committee charged to develop an initial set of recommendations, and during discussions internal to the IT management team.

An example of an approach to prioritizing recommendations is to give each member of the committee $100 to be distributed across the recommendations. The amount a member gives to each recommendation re�lects his or her sense of its importance. For example, a member could give one recommendation $90 and another $10 or give �ive recommendations $20 each. In the former case, the committee member believes that only two recommendations are important and that the �irst recommendation is nine times more important than the second. In the latter case, the member believes that �ive recommendations are of equal importance. The distributed dollars are summed across the members, with a ranking of recommendations emerging.

The leadership should not feel compelled to accept the ranking as a de�initive output. Rather, the process of scoring will reveal that members of the leadership team will rate recommendations differently. For example, some members will rate a project as having a high contribution to patient quality and others will view that contribution as low. The discussion that investigates these discrepancies can help the team understand the recommendation more fully and lead to a consensus that strengthens political support for the recommendation. Moreover, if the leadership team decides to approve a recommendation with a low score, it should ask itself why it views the recommendation as more important than the score would suggest.

For an example of the scoring of proposed IT initiatives, see Figure 12.2 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-5#c12-�ig-0002) . It lists categories of organizational goals (for example, enhance patient care), along with goals within the categories. The leadership of the organization, through a series of meetings and presentations, has scored the contribution of the IT initiative to the strategic goals of the organization. The contribution to each goal may be critical (must do), high, moderate, or none. These scores are based on data but nonetheless are fundamentally judgment calls. The scoring and prioritization will result in a set of initiatives deemed to be the most important. The IT staff members will then construct preliminary budgets, staff needs, and timelines for these projects.

Figure 12.3 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-5#c12-�ig-0003) provides an overview of the timeline for these initiatives and the cost of each. Management will discuss various timeline scenarios, consider project interdependence, and ensure that the IT department and the organization are not overwhelmed by too many initiatives to complete all at once. The organization will use the budget estimates to determine how much IT it can afford. Often there is not enough money to pay for all the desired IT initiatives, and some initiatives with high and moderate scores will be deferred or eliminated as projects. The �inal plan, including timelines and budgets, will become the basis for assessing progress throughout the year.

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Figure 12.2 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-5#backF2) IT initiative priorities

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Figure 12.3 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-5#backF3) IT plan timetable and budget

Note: Annual recurring is the ongoing operating cost of the system

On the right of the �igure, the approximate project timeline can be seen. The numbers below the timeline (0.5 and 1) indicate the number of IT staff members needed to implement the project.

Overall, a core role of the organization's CIO is to work with the rest of the leadership team to develop the process that leads to alignment and strategic linkage.

Once all is said and done, the alignment process should produce these results:

An inventory of the IT initiatives that will be undertaken (These initiatives may include new applications and projects designed to improve the IT asset.)

A diagram or chart that illustrates the linkage between the initiatives and the organization's strategy and goals

An overview of the timeline and the major interdependencies between initiatives

A high-level analysis of the budget needed to carry out these initiatives

An assessment of any material risks to carrying out the IT agenda and a review of the strategies needed to reduce those risks

It is important to recognize the amount and level of discussion, compromise, and negotiation that go into the strategic alignment process. Producing these results without going through the preceding thoughtful process will be of little real bene�it.

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12.5 IT Strategy and Alignment Challenges Creating IT strategy and alignment is a complicated and critical organizational process. The following sections present a series of observations about that process.

Planning Methodologies Formal processes and methodologies that help organizations develop IT plans, whether based on derived linkage or the examination of more fundamental characteristics of organizations, can be very helpful. If well executed, they can do all of the following:

Lead to the identi�ication of a portfolio of IT applications and initiatives that are well linked to the organization's strategy.

Identify alternatives and approaches that might not have been understood without the process.

Contribute to a more thorough analysis of the major aspects of the plan.

Enhance and ensure necessary leadership participation and support.

Help the organization be more decisive.

Ensure the allocation of resources among competing alternatives is rational and politically defensible.

Enhance communication of the developed plan.

In addition to formal IT strategic planning methodologies, organizations will often use strategy frameworks that help them frame issues and opportunities. For example, Porter's Competitive Forces Model (Porter, 1980) identi�ies strategic options such as competing on cost, differentiating based on quality, and attempting to raise barriers to the entry of other competitors. By using this model, the organization will make choices about its overall competitive position.

Models such as these help the leadership engage in a broader and more conceptual approach to strategy development.

Persistence of the Alignment Problem Despite the apparent simplicity of the normative process we have described and the many examinations of the topic by academics and consultants, achieving IT alignment has been a top concern of senior organizational leadership for several decades. For example, a survey of CIOs from across multiple industries found improving IT alignment with business objectives to be the number one IT top management priority in 2007 (Alter, 2007). A survey of CIOs in 2015 (Information Management, 2016) found alignment to be, once again, the top concern. There are several reasons for the persistent dif�iculty of achieving alignment (Bensaou & Earl, 1998):

Business strategies are often not clear or are volatile.

IT opportunities are poorly understood and new technologies emerge constantly.

The organization is unable to resolve the different priorities of different parts of the organization.

Weill and Broadbent (1998) note that effective IT alignment requires organizational leadership to clearly understand and strategically and tactically integrate (1) the organization's strategic context (its strategies and market position), (2) the organization's environment, (3) the IT strategy, and (4) the IT portfolio (for example, the current applications, technologies, and staff skills). Understanding and integrating these four continuously evolving and complex areas is exceptionally dif�icult.

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At least two more reasons can be added to this listing of factors that make alignment dif�icult. First, the organization may �ind it has not achieved the gains apparently achieved by others it has heard or read about, nor have the vendors' promises of the technologies materialized. Second, the value of IT, particularly infrastructure, is often dif�icult to quantify, and the value proposition is fuzzy and uncertain; for example, what is the value of improved security of applications?

In both these cases the organization is unsure whether the IT investment will lead to the desired strategic gain or value. This is not strictly an alignment problem. However, alignment does assume the organization believes it has a reasonable ability to achieve desired IT gains.

The Limitations of Alignment Although alignment is important, it will not guarantee effective application of IT. Planning methodologies and effective use of vectors cannot, by themselves, overcome weaknesses in other factors that can signi�icantly diminish the likelihood that IT investments will lead to improved organization performance. These weaknesses include poor relationships between IT staff members and the rest of the organization, incompetent leadership, weak �inancial conditions, and ill-conceived IT governance mechanisms. IT strategy also cannot overcome unclear overall strategies and cannot necessarily compensate for material competitive weaknesses.

If one has mediocre painting skills, a class on painting technique will make one a better painter but will not turn one into Picasso. Similarly, superb alignment techniques will not turn an organization limited in its ability to implement IT effectively into one brilliant at IT use. Perhaps this reason, more than any other, is why the alignment issue persists as a top-ranked IT issue. Organizations are searching for IT excellence in the wrong place; it cannot be delivered purely by alignment prowess.

Alignment at Maturity Organizations that have a history of IT excellence appear to evolve to a state in which their alignment process has become deeply intertwined with the normal management strategy and operations discussions. A study by Earl (1993) of organizations in the United Kingdom with a history of IT excellence found that their IT planning processes had several characteristics.

IT Planning Was Not a Separate Process IT planning and the strategic discussion of IT occurred as an integral part of the organization's strategic planning processes and management discussions.

In these organizations, management did not think of separating out an IT discussion during the course of strategy development any more than it would run separate �inance or human resource planning processes. IT planning was an unseverable, intertwined component of the usual management conversation. This would suggest not having a separate IT steering committee.

IT Planning Had Neither a Beginning nor an End In many organizations, IT planning processes start in a particular month every year and are completed within a more or less set period. In the studied organizations, the IT planning and strategy conversation went on all the time. This does not mean that an organization doesn't have to have a temporally demarked, annual budget process. Rather, it means that IT planning is a continuous process that re�lects the continuous change in the environment.

IT Planning Involved Shared Decision Making and Shared Learning IT leadership informed organizational leadership of the potential contribution of new technologies and the constraints of current technologies. Organizational leadership ensured that IT leadership understood the business plans, strategies, and their constraints. The IT budget and annual tactical plan resulted from shared analyses of IT opportunities and a set of IT priorities.

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The IT Plan Emphasized Themes A provider organization may have themes of improving care quality, reducing costs, and improving patient service. During the course of any given year, IT will have initiatives that are intended to advance the organization along these themes. The mixture of initiatives will change from year to year, but the themes endure for many years. Because themes endure year after year, organizations develop competence in these themes. They become, for example, progressively better at managing costs and improving patient service. This growing prowess extends into IT. Organizations become more skilled at understanding which IT opportunities hold the most promise and at managing implementation of these applications. And the IT staff members become more skilled at knowing how to apply IT to support such themes as improving care quality and at helping leadership assess the value of new technologies and applications.

IT Strategy Is Not Always Necessary There are many times in IT activities when the goal, or the core approach to achieving the goal, is not particularly strategic, and strategy formulation and strategy implementation are not needed. Replacing an inpatient pharmacy system, enhancing help desk support, and upgrading the network, although requiring well-executed projects, do not always require leadership to engage in conversations about organizational goals or to take a strategic look at organizational capabilities and skills.

There are many times when it is unlikely that the way an organization achieves a goal will create a distinct competitive advantage. For example, an organization may decide it needs to provide personal health records to patients, but it does not expect that that application, or its implementation, will be so superior to a competitor's personal health record that an advantage accrues to the organization.

Much of what IT does is not strategic, nor does it require strategic thinking. Many IT projects do not require thoughtful discussions of fundamental approaches to achieving organizational goals or signi�icant changes in the IT asset.

The Challenge of Emerging Technology The information technology industry in general and the health information technology industry in particular are ever- changing and evolving. New technologies are being introduced every day. How does a health care executive know when to support the adoption of the “latest and greatest” technologies? When does the organization acknowledge its current technologies are out-of-date and need upgrading? How much of the current literature about new technologies is “hype”? Which new technologies are likely to survive to become industry standards?

In this textbook we cover speci�ic methods for selecting health care information systems to meet the health care organizations' operational needs. The questions posed here are more general in nature and relate to the technologies on which these systems are built. Take, for example, the use of smartphones and tablets by health care providers.

Individuals adopted those technologies for personal use with signi�icant spillover into the work environment. Now hospitals and other health care organizations are purchasing these devices as a part of their overall information system infrastructure and are facing the challenges associated with incorporating these devices into their overall systems. At what point should the health care executives have known that these technologies were here to stay and were something to be managed? Do the early adopters of the technologies have an advantage or a disadvantage in the market?

There are no easy answers to these questions, but Gartner, Inc., has developed a useful framework for health care executives to think about when considering adopting new technologies. The hype cycle presents a view of how a technology will evolve over time. The stated purpose is to “provide a sound source of insight to manage its deployment within the context of . . . speci�ic business goals.” The hype cycle (Figure 12.4 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-6#c12-�ig-0004) ) supports organizations in their decisions to adopt the technology early or wait for further maturation. There are �ive key phases to the cycle:

Technology trigger. A potential technology breakthrough kicks things off. Early proof-of-concept stories and media interest trigger signi�icant publicity. Often no usable products exist and commercial viability is unproven.

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Peak of in�lated expectations. Early publicity by proponents of the technology reaches a crescendo; often with little practical experience using the technology. Some companies take action; many do not.

Trough of disillusionment. Interest wanes as experiments and implementations fail to deliver on the hype of the peak. The technology is often immature and users of the technology are just beginning to learn how to apply the technology to further organizational goals. Producers of the technology shake out or fail. Investments continue only if the surviving vendors improve their products to the satisfaction of early adopters.

Slope of enlightenment. More instances of how the technology can bene�it the enterprise start to crystallize and become more widely understood. Second- and third-generation mature products appear from technology providers. More enterprises fund pilots; conservative companies remain cautious. The real value of the technology begins to emerge.

Plateau of productivity. Mainstream adoption starts to take off. Criteria for assessing vendor and product viability are more clearly de�ined. The technology's broad market applicability and relevance are clearly paying off.

Figure 12.4 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c12anchor-6#backF4) Hype cycle for emerging technologies, 2014

Source: Gartner (2014). Used with permission.

In the strategic discussion of new technologies it is prudent to identify where the technology sits on the hype cycle. It may be premature to invest at scale in technologies that are the peak of in�lated expectations. The organization may be well served to let the market evolve and the products mature before it initiates signi�icant investment.

However, the organization may decide that the technology, although immature and cloaked in a fog of hype, has signi�icant potential and that there is merit to conducting pilots so that the organization begins to understand the potential of the technology and develop prowess in its use. For example, the Internet of Things mentioned previously is solidly at the peak of in�lated expectations. However, the organization's strategy may identify this class of technologies as a potentially very important contributor to its goal of monitoring the health of people with a chronic disease. Hence the organization will pilot the technology to better understand the impact of the technology in improving disease management.

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Summary The development of IT alignment and strategic linkage is a complex undertaking. Four vectors, each complex, must converge. The dif�iculty of this undertaking is manifest in the frequent citing of IT alignment in surveys of major organizational issues and problems. There are no simple answers to this problem. At the end of the day, good alignment requires talented leaders (including the CIO) who have effective debates and discussions regarding strategies and who have very good instincts and understandings about the organization's strategy and the potential contribution of IT.

Perspective Hype Cycle for Healthcare Provider Technologies and Standards

On the Rise

FHIR

Blue Button+

Real-time health care system

Voice user interface

At the Peak

Natural-language processing (clinical enterprise)

E-prescribing of controlled substances

Logical data warehouse

C-CDA

Clinical communications and collaboration

Consent management

Enterprise �ile synchronization and sharing

Enterprise fraud and misuse management

Secure text messaging

Health care master data management

IT GRCM

Sliding into the Trough

Continua

Business continuity management planning

Uni�ied communications

Semantic interoperability/healthcare

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Legacy decommissioning

End-user experience monitoring

ICD-10 (US)

Direct messaging

HIE

GS1 Healthcare (GDSN)

HL7 Infobutton

Climbing the Slope

Desktop virtualization

Patient self-service kiosks

Positive patient identi�ication

Vendor-neutral archive

Enterprise mobility services

Information life cycle management

IHE XDS.b

Location- and condition-sensing technologies

User administration/provisioning

Enterprise content management

Patient portals

Entering the Plateau

Strong authentication for enterprise access

Medical device connectivity

Source: Gartner (2015). Used with permission.

It appears that organizations that are mature in their IT use have evolved these IT alignment processes to the point at which they are no longer distinguishable as separate processes. This observation should not be construed as advice to cease using planning approaches or disband effective IT steering committees. Such an evolution, to the degree that it is normative, may occur naturally, just as kids will eventually grow up (at least most of them will).

Key Terms

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IT alignment Strategy formulation

IT asset Strategy implementation

IT strategy vectors

Learning Activities Describe how a population health system can advance the strategies of a health care provider organization.

Describe how a customer relationship management system can advance the strategies of a payer organization.

Pick an example of a new technology, such as the Internet of Things. Discuss how this technology might leverage the strategy of a provider or a payer organization.

If a health care organization has a strategy of lowering its costs of care, what types of IT applications might it consider? If the organization has a strategy of improving the quality of its care, what types of IT applications might it consider? Compare the two lists of applications.

References Alter, A. (2007, Dec.). Top trends for 2008. CIO Insight, 88, 37–40.

Bensaou, M., & Earl, M. (1998). The right mind-set for managing information technology. Harvard Business Review, 76(5), 119–128.

Chandler, A. (1962). Strategy and structure. Cambridge, MA: MIT Press.

Earl, M. (1993). Experiences in strategic information systems planning. MIS Quarterly, 17(1), 1–24.

Gartner. (2014, Aug.). Hype cycle for emerging technologies, 2014. Retrieved May 2016 from http://www.gartner.com/newsroom/id/2819918 (http://www.gartner.com/newsroom/id/2819918)

Gartner. (2015, July). Hype cycle for healthcare provider technologies and standards, 2015. Retrieved May 2016 from https://www.gartner.com/doc/3086917/hype-cycle-healthcare-provider-technologies (https://www.gartner.com/doc/3086917/hype-cycle-healthcare-provider-technologies)

Henderson, J., & Venkatraman, N. (1993). Strategic alignment: Leveraging information technology for transforming organizations. IBM Systems Journal, 32(1), 4–16.

Information Management. (2016). Top 10 CIO concerns. Retrieved April 2016 from http://www.information- management.com/gallery/data-in-2016-top-10-cio-concerns-10027647-1.html (http://www.information- management.com/gallery/data-in-2016-top-10-cio-concerns-10027647-1.html)

Porter, M. (1980). Competitive strategy. New York, NY: Free Press.

Weill, P., & Broadbent, M. (1998). Leveraging the new infrastructure. Boston, MA: Harvard Business School Press.

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Chapter 13 IT Governance and Management

Learning Objectives

To be able to understand the scope and importance of IT governance.

To review the IT roles and responsibilities of users, the IT department, and senior management.

To be able to discuss the components of an IT budget and the processes for developing the budget.

To review the factors that enable sustained excellence in the application of IT.

To understand how IT can contribute to an organization's IT competitiveness.

In this chapter we discuss an eclectic but important set of information technology (IT) management processes, structures, and issues. Developing, managing, and evolving IT management mechanisms is often a central topic for organizational leadership. In this chapter we will cover the following areas:

IT governance. IT governance is composed of the processes, reporting relationships, roles, and committees that an organization develops to make decisions about IT resources and activities and to manage the execution of those decisions. These decisions involve issues such as setting priorities, determining budgets, de�ining project management approaches, and addressing IT problems.

IT budget. Developing the IT budget is a complex exercise. Organizations always have more IT proposals than can be funded. Some proposals are strategically important and others involve routine maintenance of existing infrastructure, making proposal comparison dif�icult. Although complex and dif�icult, the effective development of the IT budget is a critical management responsibility.

Management role in major IT initiatives. Senior management has an extremely important role in ensuring that major IT initiatives succeed and result in desired organizational performance gains. In other chapters of this book, management process for system selection, implementation, and value realization were discussed. In this section we discuss risk factors facing major initiatives and steps management can take to mitigate those risks.

IT effectiveness. Over the years several organizations have demonstrated exceptional effectiveness in applying IT: American Express, Bank of America, Uber, Amazon, Schwab, and American Airlines. This chapter discusses what the management of these organizations did that led to such effectiveness. It also examines the attributes of IT-savvy senior leadership.

IT to improve an organization's competitive position. IT is often used as a means to improve an organization's ability to compete. In this section we will discuss lessons learned from other industries from their efforts to use IT as a competitive asset.

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13.1 IT Governance IT governance refers to the principles, processes, and organizational structures that govern the IT resources (Drazen & Straisor, 1995). When solid governance exists, the organization is able to give a coherent answer to the following questions:

Which committees and processes are used to de�ine the IT strategy?

Who sets priorities for IT, and how are those priorities set?

Who is responsible for implementing information system plans, and what principles will guide the implementation process?

How are IT responsibilities distributed between IT and the rest of the organization and between centralized and decentralized (local) IT groups in an integrated delivery system?

How are IT budgets developed?

At its core, governance involves the following functions:

Determining the distribution of the responsibility for making decisions, the scope of the decisions that can be made by different organizational functions, and the processes to be used for making decisions

De�ining the roles that various organizational members and committees ful�ill for IT—for example, which committee should monitor progress in an EHR implementation and what is the role of a department head during the implementation of a new system for his or her department?

Developing IT-centric organizational processes for making decisions in key areas such as these:

IT strategy development

IT prioritization and budgeting

IT project management

IT architecture and infrastructure management

De�ining policies and procedures that govern the use of IT—for example, if a user wants to buy a new network for use in his or her department, what policies and procedures govern that decision?

Developing and maintaining an effective and ef�icient IT governance structure is a complex exercise. Moreover, governance is never static. Continuous re�inements may be needed as the organization discovers imperfections in roles, responsibilities, and processes.

Perspective The Foundation of IT Governance

Peter Weill and Jeanne Ross have identi�ied �ive major areas that form the foundation of IT governance. The organization's governance mechanisms need to create structures and processes for these areas.

IT principles: high-level statements about how IT is used in the business

IT architecture: an integrated set of technical choices to guide the organization in satisfying business needs. The architecture is a set of policies, procedures, and rules for the use of IT and for evolving IT in a direction that improves IT support for the organization.

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IT infrastructure strategies: strategies for the existing technical infrastructure (and IT support staff) that ensure the delivery of reliable secure and ef�icient services

Business application needs: processes for identifying the needed applications

IT investment and prioritization: mechanism for making decisions about project approvals and budgets

Source: Weill and Ross (2004, p. 27).

Governance Characteristics Well-developed governance mechanisms have several characteristics.

They are perceived as objective and fair. No organizational decision-making mechanisms are free from politics, and some decisions will be made as part of side deals. It is exceptionally rare for all managers of an organization to agree with any particular decision. Nonetheless, organizational participants should generally view governance as fair, objective, well-reasoned, and having integrity. The ability of governance to govern is highly dependent on the willingness of organizational participants to be governed.

They are ef�icient and timely. Governance mechanisms should arrive at decisions quickly, and governance processes should be ef�icient, removing as much bureaucracy as possible.

They make authority clear. Committees and individuals who have decision authority should have a clear understanding of the scope of their authority. Individuals who have IT roles should understand those roles. The organization's management must have a consistent understanding of its approach to IT governance. There always will be occasions when decision rights are murky, roles are confusing, or processes are unnecessarily complex, but these occasions should be few.

They can change as the organization, its environment, and its understanding of technology changes. For example, efforts to implement regional interoperability between EHRs will require new governance mechanisms that bring representatives from the partnering organizations together to deal with inter- organizational IT issues such as the allowable uses of shared data.

Governance mechanisms evolve as IT technology and the organization's use of that technology evolve.

IT, User, and Senior Management Responsibilities Effective application of IT involves the thoughtful distribution of IT responsibilities among the IT department, users of applications and IT services, and senior management. In general, these responsibilities address decision-making rights and roles. Although different organizations will arrive at different distributions of these responsibilities, and an organization's distribution may change over time, there is a fairly normative distribution (Applegate, Austin, & McFarlan, 2007).

IT Department Responsibilities The IT department should be responsible for the following:

Developing and managing the long-term architectural plan and ensuring that IT projects conform to that plan.

Developing a process to establish, maintain, and evolve IT standards in several areas:

Telecommunications protocols and platforms

Client devices, such as workstations and mobile devices, and client software con�igurations

Server technologies, middleware, and database management systems

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Programming languages

IT documentation procedures, formats, and revision policies

Data de�initions (this responsibility is generally shared with the organization function, such as �inance and health information management, that manages the integrity and meaning of the data)

IT disaster and recovery plans

IT security policies and incident response procedures

Developing procedures that enable the assessment of sourcing options for new initiatives, such as building versus buying new applications or leveraging existing vendor partner offerings versus utilizing a new vendor when making an application purchase

Maintaining an inventory of installed and planned systems and services and developing plans for the maintenance of systems or the planned obsolescence of applications and platforms

Managing the professional growth and development of the IT staff [members]

Establishing communication mechanisms that help the organization understand the IT agenda, challenges, and services and new opportunities to apply IT

Maintaining effective relationships with preferred IT suppliers of products and services (Applegate, Austin, & McFarlan, 2007, p. 429)1 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c13anchor-7#c13-note-0001)

The scope and depth of these responsibilities may vary. Some of the responsibilities of the IT group may be delegated to others. For example, some non-IT departments may be permitted to have their own IT staff members and manage their own systems. This should be done only with the approval of senior management. And the IT department should be asked to provide oversight of the departmental IT group to ensure that professional standards are maintained and that no activities that comprise the organization's systems are undertaken. For example, the IT department can ensure that virus control procedures and software are effectively applied.

In general, the IT department is responsible for making sure that individual and organizational information systems are reliable, secure, ef�icient, current, and supportable. IT is also usually responsible for managing the relationship with suppliers of IT products and services and ensuring that the processes that lead to new IT purchases are rigorous.

User Responsibilities IT users (primarily middle managers and supervisors) have several IT-related user responsibilities:

Understanding the scope and quality of IT activities that are supporting their area or function

Ensuring that the goals of IT initiatives re�lect an accurate assessment of the function's needs and challenges and that the estimates of the function's resources (personnel time, funds, and management attention) needed by IT initiatives—to support the implementation of a new system, for example—are realistic

Developing and reviewing speci�ications for IT projects and ensuring that ongoing feedback is provided to the IT organization on implementation issues, application enhancements, and IT support, ensuring, for example, that the new application has the functionality needed by the user department

Ensuring that the applications used by a department are functioning properly, such as by periodically testing the accuracy of system-generated reports and checking that passwords are deleted when staff [members] leave the organization

Participating in developing and maintaining the IT agenda and priorities (Applegate, Austin, & McFarlan, 2007, p. 431)2 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c13anchor-7#c13-note-0002)

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These responsibilities constitute a minimal set. In Chapters Six (c06.xhtml) and Seven (c07.xhtml) , we discussed an additional, and more signi�icant, set of responsibilities during the selection and implementation of new applications.

Senior Management Responsibilities The primary IT senior management responsibilities are as follows:

Ensuring that the organization has a comprehensive, thoughtful, and �lexible IT strategy

Ensuring an appropriate balance between the perspectives and agendas of the IT organization and the users— for example, the IT organization may want a new application that has the most advanced technology, [and] the user department wants the application that has been used in the industry for a long time

Establishing standard processes for budgeting, acquiring, implementing, and supporting IT applications and infrastructure

Ensuring that IT purchases and supplier relationships conform to organizational policies and practices—for example, contracts with IT vendors need to use standard organizational contract language

Developing, modifying, and enforcing the responsibilities and roles of the IT organization and users

Ensuring that the IT applications and activities conform to all relevant regulations and required management controls and risk mitigation processes and procedures

Encouraging the thoughtful review of new IT opportunities and appropriate IT experimentation (Applegate, Austin, & McFarlan, 2007, p. 432)3 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c13anchor-7#c13-note-0003)

Although organizations will vary in the ways they distribute decision-making responsibility and roles and the ways in which they implement them, problems may arise when the distribution between groups is markedly skewed (Applegate, Austin, & McFarlan, 2007).

Too much user responsibility can lead to a series of uncoordinated and undermanaged user investments in information technology. This can result in these problems:

An inability to achieve integration between highly heterogeneous systems

Insuf�icient attention to infrastructure, resulting in application instability

High IT costs because of insuf�icient economies of scale, signi�icant levels of redundant activity, and the cost of supporting a high number of heterogeneous systems

A lack of, or uneven, rigor applied to the assessment of the value of IT initiatives—for example, insuf�icient homework may be done and an application selected that has serious functional limitations

Too much IT responsibility can lead to these problems:

Too much emphasis on technology, to the detriment of the �it of an application with the user function's need: for example, when a promising application does not completely satisfy the IT department's technical standards, IT will not allow its acquisition

Perspective Principles for IT Investments and Management

Charlie Feld and Donna Stoddard have identi�ied three principles for effective IT investments and management. They note that the responsibility for developing and implementing these principles lies with the organization's senior leadership.

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A long-term IT renewal plan linked to corporate strategy. Organizations need IT plans that are focused on achieving the organization's overall strategy and goals. The organization must develop this IT renewal plan and remain focused, often over the course of many years, on its execution.

A simpli�ied, unifying corporate technology platform. This IT platform must be well architected and be de�ined and developed from the perspective of the overall organization rather than the accumulation of the perspectives of multiple departments and functions.

A highly functional, performance-oriented IT organization. The IT organization must be skilled, experienced, organized, goal-directed, responsive, and continuously work on establishing great working relationships with the rest of the organization.

Source: Feld and Stoddard (2004, p. 73).

A failure to achieve the value of an application because of user resistance to a solution imposed by IT: “We in the IT department have decided that we know what you need. We don't trust your ability to make an intelligent decision.”

Too much rigor applied to IT investment decisions; excessive bureaucracy can sti�le innovation

A very high proportion of the IT budget devoted to infrastructure to the detriment of application initiatives as the IT department seeks to achieve ever greater (though perhaps not necessary) levels of reliability, security, and agility

Reduction in business innovation when IT is unwilling to experiment with new technologies that might have stability and supportability problems

Either extreme can clearly create problems. And no compromise position will make the IT department and the IT users happy with all facets of the outcome. An outcome of “the best answer we can develop but not an answer that satis�ies all” is an inevitable result of the leadership discussion of responsibility and role distribution.

Speci�ic Governance Structures In any organization there may be a plethora of committees and a series of complex reporting relationships and accountabilities, all of which need to operate with a fair degree of harmony in order for governance to be effective. Among them should be �ive core structures for governing IT:

A board committee responsible for IT

A senior leadership forum that guides the development of the IT agenda, �inalizes the IT budget, develops major IT-centric policies, and addresses any signi�icant IT issue that cannot be resolved elsewhere

Initiative- and project-speci�ic committees and roles (this was discussed in the chapters on implementation and value)

IT liaison relationships

A chief information of�icer (CIO) and other IT staff members (described in Chapter Eight (c08.xhtml) )

The Board The health care organization's board holds the fundamental accountability for the performance of the organization, including the IT function. The board must decide how it will carry out its responsibility with respect to IT.

At a minimum this responsibility involves receiving a periodic update (perhaps annually) at a board meeting from the CIO about the status of the IT agenda and the issues confronting the effective use of IT. In addition, �inancial information

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system controls and IT risk mitigation are often identi�ied and discussed by the board's audit committee, and the IT budget is discussed by the �inance committee.

Some organizations create an IT committee on the board. Realizing that the usual board agenda might not always allow suf�icient time for discussion of important IT issues and that not all board members have deep experience in IT, the board can appoint a committee of board members who are seasoned IT professionals (IT academics, CIOs of regional organizations, and leaders in the IT industry). The committee, chaired by a trustee, need not be composed entirely of board members. IT professionals who are not on the board may serve as members, too. This committee informs the board of its assessments of a wide range of IT challenges and initiatives and makes recommendations about these issues.

The charter for such a committee might charge the committee to do the following:

Review and critique IT application, technical, and organizational strategies.

Review and critique overall IT tactical plans and budgets.

Discuss and provide advice on major IT issues and challenges.

Explore opportunities to leverage vendor partnerships.

Senior Leadership Organizational Forum Most health care organizations have a committee called something similar to the executive committee. Composed of the senior leadership of the organization, this committee is the forum in which strategy discussions occur and major decisions regarding operations, budgets, and initiatives are made. It is highly desirable to have the CIO be a member of this committee.

Major IT decisions should be made at the meetings of this committee. These decisions will cover a gamut of topics, such as approving the outcome of a major system selection process, de�ining changes in direction that may be needed during the course of signi�icant implementations, setting IT budget targets, and ratifying the IT component of the strategic-planning efforts.

This role does not preclude the executive committee from assigning IT-related tasks or discussions to other committees. For example, a medical staff leadership committee may be asked to develop policies regarding physician documentation of the problem list. A committee of department heads may be asked to select a new application to support registration and scheduling. A committee of human resource staff members may be charged with developing policies regarding organizational staff member use of social media sites.

The executive committee, major departments and functions, and several high-level committees will regularly be confronted with IT topics and issues that do not arise from the organization's IT plan and agenda. For example, a board member may ask if the organization should outsource its IT function. Several in�luential physicians may suggest that the organization assess a new information technology that seems to be getting a lot of hype. The CEO may ask how the organization should (or whether it should) respond to an external event: for example, a new Institute of Medicine report. The organization may need to address new regulations: for example, rules being issued by CMS.

Some organizations create an IT steering committee and charge this committee with addressing all IT issues and decisions. The use of such committees is uneven in health care organizations. Approximately half have such a committee.

IT Liaison Relationships All major functions and departments of the organization—for example, �inance, human resources, member services, medical staff affairs, and nursing—should have an IT liaison. The IT liaison is responsible for the following:

Developing effective working relationships with the leadership of each major function

Ensuring that the IT issues and needs of these functions are understood and communicated to the IT department and the executive committee

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Working with function leadership to ensure appropriate IT representation on function task forces and committees that are addressing initiatives that will require IT support

Ensuring that the organization's IT strategy, plans and policies, and procedures are discussed with function leadership

The IT liaison role is an invaluable one. It ensures that the IT department and the IT strategy receive needed feedback and that function leaders understand the directions and challenges of the IT agenda. It also promotes an effective collaboration between IT and the other functions and departments.

Variations The speci�ic governance structures just described are typical in medium-sized and large provider or payer organizations. In other types of health care settings, these structures will be different.

A medium-sized physician group might not have a separate board. The physicians and the practice manager might make up the board and the senior leadership forum. The group might not need a CIO. Instead the practice administrator might manage contracts and relationships with companies that provide practice management systems and support workstations and printers. The practice administrator also might perform all user liaison functions.

Perspective Improving Coordination and Working Relationships

Carol Brown and Vallabh Sambamurthy have identi�ied �ive mechanisms used by IT groups to improve their coordination and working relationships with the rest of the organization.

Integrators are individuals who are responsible for linking a particular organization department or function with the IT department. An integrator might be a CIO who is a participant in senior management forums. An integrator might also be an IT person who is responsible for working with the �inance department on IT initiatives that are centered on that function; such a person might have a title such as manager, �inancial information systems.

Groups are committees and task forces that regularly bring IT staff [members] and organization staff [members] together to work collectively on IT issues. These groups could include, for example, the information systems steering committee or a standing joint meeting between IT and nursing to address current IT issues and review the status of ongoing IT initiatives.

Processes are organizational approaches to management activity such as developing the IT budget, selecting new applications, and implementing new systems. These processes invariably involve both IT and non-IT staff [members].

Informal relationship building includes a series of activities such as one-on-one meetings, IT staff presentations at department head meetings, and co-location of IT staff [members] and user staff [members].

Human resource practices include training IT staff [members] on team building, offering user feedback to IT staff [members] during their reviews, and having IT staff [members] spend time in a user area observing work.

Source: Brown and Sambamurthy (1999, p. 68).

A division within a state department of public health would not have a board, but it should have a forum where division leadership can discuss IT issues. IT decisions might be made there or at meetings of the leadership of the overall department. Similarly, the CIO for the department might not have organized IT in a way that results in a division CIO. And the staff members of the department CIO might provide user liaison functions for the division.

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Despite these variations, effective management of IT still requires

A senior management forum where major IT decisions are made

A person responsible for day-to-day management of the IT function and for ensuring that an IT strategy exists

Mechanisms for ensuring that IT relationships have been established with major organizational functions

In addition, although the structures will vary, the guidance for the respective roles of the IT group, users, and management remains the same. The desirable attributes of the person responsible for IT are unchanged. And the properties of good governance do not change.

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13.2 IT Budget Developing budgets is one of the most critical management undertakings; it is the process that makes strategy real because it involves the commitment of resources. The budget process forces management to make choices between initiatives and investments and requires analysis of the scope and impact of any initiative—for example, it forces answers to questions such as, do we really believe that this initiative enables us to reduce supply costs by 3 percent?

Developing the IT budget is challenging for several reasons:

The IT projects proposed at any one time are eclectic. In addition to the IT initiatives proposed as a result of the alignment and strategic planning process, other initiatives may be put forward by clinical or administrative departments that desire to improve some aspect of their performance. Also on the table may be IT projects designed to improve infrastructure—for example, a proposal to upgrade servers. These initiatives will all be different in character and in the return they offer, making them dif�icult to compare.

Dozens, if not hundreds, of IT proposals may be made, making it challenging to fully understand all the requests.

The aggregate request for capital and operating budgets can be too expensive. It is not unusual for requests to total three to four times more money than the organization can afford. Even if it wanted to fund all of the requests, the organization doesn't have enough money to do so.

And yet the budget process requires that the organization grapple with these complexities and arrive at a budget answer.

Basic Budget Categories To facilitate the development of the IT budget, the organization should develop some basic categories that organize the budget discussion.

Capital and Operating

The �irst category distinguishes between capital and operating budgets. Financial management courses are the best place to learn about these two categories. In brief, however, capital budgets are the funds associated with purchasing and deploying an asset. Common capital items in IT budgets are hardware and applications. Operating budgets are the funds associated with using and maintaining the asset. Common operating items in IT budgets are hardware maintenance contracts and the salaries of IT analysts. In an analogous fashion, the purchase of a car is a capital expense. Gasoline and tune-ups are operating expenses. Both capital and operating budgets are prepared for IT initiatives.

Support, Ongoing, and New IT

Support refers to those IT costs (staff members, hardware, and software licenses) necessary to support and maintain the applications and infrastructure that are in place now. Software maintenance contracts ensure that applications receive appropriate upgrades and bug �ixes. Staff members are needed to run the computer room and perform minor enhancements. Disk drives may need to be replaced. Failure to fund support activities can make it much more dif�icult to ensure the reliability of systems or to evolve applications to accommodate ongoing needs—for example, adding a new test to the dictionary for a laboratory system or introducing a new plan type into the patient accounting system.

Ongoing projects are those application implementations begun in a prior year and still under way. The implementation of a patient accounting system or a care coordination application can take several years. Hence a capital and operating budget is needed for several years to continue the implementation.

New projects are just that—there is a proposal for a new application or infrastructure application. The IT strategy may call for new systems to support nursing. Concerns over network security may lead to requests for new software to deter the efforts of hackers.

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Improve Current Operations or Strategic Plan

Proposals may be directed to improving current operations, perhaps by responding to new regulations or streamlining the work�low in a department. Proposals may also be explicitly linked to an aspect of the health care organization's strategic plan—they might call for applications to support a strategic emphasis on disease management, for example.

Budget Targets During the budget process, organizations de�ine targets for the budget overall and for its components. For example, the organization might state that it would like to keep the overall growth in its operating budget to 2 percent but is willing to allow 5 percent growth in the IT operating budget. The organization might also direct that within that overall 5 percent growth, the budget for support should not grow by more than 3 percent, but the budget for new projects and ongoing projects combined can grow by 11 percent. Table 13.1 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c13anchor-3#c13-tbl-0001) illustrates the application of overall and selective operating budget targets.

Table 13.1 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c13anchor-3#backT1) Target increases in an IT operating budget

Support Operations Strategic Initiatives Overall Target

Ongoing and new 9% 15% 11%

Support 3% 3% 3%

OVERALL TARGET 4% 7% 5%

Similarly, targets can be set for the capital budget. For example, perhaps it will be decided that the capital budget for support should remain �lat but that given the decision to invest in an EHR system, the overall capital budget will increase to accommodate the capital required by the EHR investment.

IT Budget Development In addition to formulating the categories just described, organizational leadership will need to develop the process through which the IT budget is discussed, prioritized, and approved. In other words, it must answer the governance question, what processes will we use to decide which projects will be approved subject to our targets? An example of a budget process is outlined in this section and illustrated in Figure 13.1 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c13anchor-3#c13-�ig-0001) .

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Figure 13.1 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c13anchor-3#backF1) IT budget decision-making process

This process example has �ive components.

First, the IT department submits an operating budget to support the applications and infrastructure that will be in place as of the beginning of the �iscal year (the support budget). This budget might be targeted to a 3 percent increase over the support budget for the prior �iscal year. The 3 percent increase re�lects in�lation, salary increases, a recognition that new systems were implemented during the �iscal year and will require support, and an acknowledgment that infrastructure (workstations, remote locations, and storage) consumption will increase. A �igure for capital to support applications and infrastructure is also submitted, and it might be targeted to be the same as that budgeted in the prior �iscal year. If the support operating and capital budgets achieve their targets, there is minimal management discussion of those budgets.

Second, IT leadership reviews the strategic IT initiatives (new and ongoing) with the senior leadership of the organization. This review may occur in a forum such as the executive committee. This committee, mindful of its targets, determines which strategic initiatives will be funded. If the budget being sought to support strategic IT initiatives is large or a major increase over the previous year, there may be discussions about the budget with the board.

Third, the organization must decide which new and ongoing initiatives that improve current operations—for example, a new clinical laboratory or contract management system—will be funded. These discussions must occur in the forum where the overall operations budget is discussed, generally organizational meetings that routinely discuss operations and that include among their members the managers of major departments and functions. Budget requests for new IT applications are reviewed in the same conversation that discusses budget requests for new clinical services or improvement of the organization's physical plant.

Fourth, the IT strategy budget discussion and the IT operations budget discussion follow a set of ground rules:

The IT budget is discussed in the same conversations that discuss non-IT budget requests. This will result in trade-offs between IT expenditures and other expenditures. This integration forces the organization to examine where it believes its monies are best spent, asking, for example, Should we invest in this IT proposal or should we invest in hiring staff members to expand a clinical service? Following this process also means that IT requests and other budget requests are treated no differently.

The level of analytical rigor required of the IT projects is the same as that required of any other requested budget item.

When appropriate, a sponsor—for example, a clinical vice president or a CFO—defends the IT requests that support his or her department in front of his or her colleagues. The IT staff members or CIO should be asked to defend infrastructure investments—for example, major changes to the network—but should not be asked to defend applications.

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The ground rule that sponsors should present their own IT requests deserves a bit more discussion, because the issue of who defends the request has several important rami�ications, particularly for initiatives designed to improve current operations. Having this ground rule has the following results:

It forces assessment of trade-offs between IT and non-IT investments. The sponsor will determine whether to present the IT proposal or some other, perhaps non-IT, proposal. Sponsors are choosing which investments are the most important to them.

It forces accountability for investment results. The sponsor and his or her colleagues know that if the IT proposal is approved, there will be less money available for other initiatives. The defender also knows that the value being promised must be delivered or his or her credibility in next year's budget discussion will be diminished.

It improves management comfort when dealing with IT proposals. Managers can be more comfortable with the IT proposal if one of their operations colleagues is defending it. The defender also learns how to be comfortable when presenting IT proposals.

It gets IT out of the role of defending other people's operation improvement initiatives. However, the IT function must still support the budget requests of others by providing data on the costs and capabilities of the proposed applications and the time frames and resources required to implement them. If the IT function believes that the proposed initiative lacks merit or is too risky, IT staff members need to ensure that this opinion is heard during the budget approval process.

In the �ifth and �inal step of the process, the operations and strategic budget recommendations are reviewed and discussed at an executive committee meeting. The executive committee can accept the recommendations, request further re�inement (perhaps cuts) of the budget, or determine that a discussion of the budget is required at an upcoming board meeting.

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13.3 Management Role in Major IT Initiatives The failure rate of IT initiatives is surprisingly high. Project failure occurs when a project is signi�icantly over budget, takes much longer than the estimated timeline, or has to be terminated because so many problems have occurred that proceeding is no longer judged to be viable. Cook (2007) �inds that 35 percent of IT projects were successful, whereas 19 percent failed. The remaining 46 percent delivered a useful product but suffered from budget overruns, prolonged timetables, and application feature shortfalls.

Cash, McFarlan, and McKenney (1992) note that two major categories of risk confront signi�icant IT investments: strategy failures and implementation failures. The project failure rates suggest that management should be more worried about IT implementation than IT strategy. IT strategy is sexier and more visionary than implementation. However, a very large number of strategies and visions go nowhere or are diminished because the organization is unable to implement them.

It is rare that leaders plan to fail. And yet they often do things or don't do things that increase the likelihood that a major initiative will fail. At times they don't appreciate the myriad ways that projects can go south and hence they fail to take steps to mitigate those risk factors. In the sections that follow we discuss factors that imperil implementations, factors that can be managed.

Lack of Clarity of Purpose Any project or initiative is destined for trouble if its objectives and purpose are unclear. Sometimes the purpose of a project is only partially clear. For example, an organization may have decided that it should implement an EHR in an effort to “improve the quality and ef�iciency of care.” However, it is not really clear to the leadership and staff members how the EHR will be used to improve care. Will problems associated with �inding a patient's record be solved? Will the record be used to gather data about care quality? Will the record be used to support outpatient medication ordering and reduce medication error rates?

All these questions can be answered yes, but if the organization never gets beyond the slogan of “improve the quality and ef�iciency of care,” the scope of the project will be murky. The de�inition of care improvement is left up to the project participant to interpret. And the scope and timetable of the project cannot possibly be precise because project objectives are too fuzzy.

Lack of Belief in the Project At times the objectives are very clear, but the members of the organization are not convinced that the project is worth doing at all. Because the project will change the work life of many members and require that they participate in design and implementation, they need to be suf�iciently convinced that the project will improve their lives or is necessary if the organization is to thrive. They will legitimately ask, what's in it for me? Unconvinced of the need for the project, they will resist it. A resistant organization will likely doom any project. Projects that are viewed as illegitimate by a large portion of the people in an organization rarely succeed.

Insuf�icient Leadership Support The organization's leaders may be committed to the undertaking yet not demonstrate that commitment. For example, leaders may not devote suf�icient time to the project or may decide to send subordinates to meetings. This broadcasts a signal to the organization that the leaders have other, “more important” things to do. Tough project decisions may get made in a way that shows the leaders are not as serious as their rhetoric, because when push came to shove, they caved in.

Members of the leadership team may have voted yes to proceed with a project, but their votes may not have included their reservations about the utility of the project or the way it was put together. Once problems are encountered in the project (and all projects encounter problems), this quali�ied leadership support evaporates, and the silent reservations become public statements such as, “I knew that this would never work.”

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Organizational Inertia Even when the organization is willing to engage in a project, inertia can hinder it. People are busy. They are stressed. They have jobs to do. Some of the changes are threatening. Staff members may believe these changes leave them less skilled or with reduced power. Or they may not have a good understanding of their work life after the change, and they may imagine that an uncertain outcome cannot be a good outcome.

Projects add work on top of the workload of often already overburdened people. Projects add stress for often already stressed people. As a result, despite the valiant efforts of leadership and the expenditure of signi�icant resources, a project may slowly grind to a halt because too many members �ind ways to avoid or not deal with the efforts and changes the initiative requires. Bringing signi�icant change to a large portion of the organization is very hard because, if nothing else, there is so much inertia to overcome.

Organizational Baggage Organizations have baggage. Baggage comes in many forms. Some organizations have no history of competence in making signi�icant organizational change. They have never learned how to mobilize the organization's members. They do not know how to handle con�lict. They are unsure how to assemble and leverage multidisciplinary teams. They have never mastered staying the course over years during the execution of complex agendas. These organizations are “incompetent,” and this incompetence extends well beyond IT, although it clearly includes IT initiatives.

An organization may have tried initiatives “like this” before and failed. The proponents of the initiative may have failed at other initiatives. Organizations have very long memories, and their members may be thinking something like, “The same clowns who brought us that last �iasco are back with an even ‘better’ idea.” The odor from prior failures signi�icantly taints the credibility of newly proposed initiatives and helps to ensure that organizational acceptance will be weak.

Lack of an Appropriate Reward System Aspects of organizational policies, incentives, and practices can hinder a project. The organization's incentive system may not be structured to reward multidisciplinary behavior—for example, physicians may be rewarded for research prowess or clinical excellence but not for sitting on committees to design new clinical processes. An integrated delivery system may have encouraged its member hospitals to be self-suf�icient. As a result, management practices that involve working across hospitals never matured, and the organization does not know how (even if it is willing) to work across hospitals.

Lack of Candor Organizations can create environments that do not encourage healthy debate. Such environments can result when leadership is intolerant of being challenged or has an in�lated sense of its worth and does not believe that it needs team effort to get things done. The lack of a climate that encourages con�lict and can manage con�lict means that initiative problems will not get resolved. Moreover, organizational members, not having had their voices heard, will tolerate the initiative only out of the hope that they will outlast the initiative and the leadership.

Sometimes the project team is uncomfortable delivering bad news. Project teams will screw up and make mistakes. Sometimes they really screw up and make really big mistakes. Because they may be embarrassed or worried that they will be admonished, they hide the mistakes from the leadership and attempt to �ix the problems without “anyone having to know.” This attempt to hide bad news is a recipe for disaster. It is unrealistic to expect problems to go unnoticed; invariably the leadership team �inds out about the problem and its trust in the project team erodes. At times leadership has to look in the mirror to see if its own intolerance for bad news in effect created the problem.

Project Complexity Project complexity is determined by many factors:

The number of people whose work will be changed by the project and the depth of those changes

The number of organizational processes that will be changed and the depth of those changes

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The number of processes linking the organization and other organizations that will be changed and the depth of those changes

The interval over which all this change will occur: for example, will it occur quickly or gradually?

If the change is signi�icant in scale, scope, and depth, then it becomes very dif�icult (often impossible) for the people managing the project to truly understand what the project needs to do. The design will be imperfect. The process changes will not integrate well. And many curves will be thrown in the project's way as the implementation unfolds and people realize their mistakes and understand what they failed to understand initially.

Sometimes complex projects disappear in an organizational mushroom cloud. The complexity overwhelms the organization and causes the project to crash suddenly. More common is “death by ants”—no single bite (or project problem) will kill the project, but a thousand will. The organization is overwhelmed by the thousand small problems and inef�iciencies and terminates the undertaking.

Managers should remember that complexity is relative. Organizations generally have developed a competency to manage projects up to a certain level and type of complexity. Projects that require competency beyond that level are inherently risky. A project that is risky for one organization may not be risky for another. For example, an organization that typically manages projects that cost $2 million, take ten person-years of effort, and affect three hundred people will struggle with a project that costs $20 million and takes one hundred person-years of effort (Cash, McFarlan, & McKenney, 1992).

Failure to Respect Uncertainty Signi�icant organizational change brings a great deal of uncertainty with it. The leadership may be correct in its understanding of where the organization needs to go and the scope of the changes needed. However, it is highly unlikely that anyone really understands the full impact of the change and how new processes, tasks, and roles will really work. At best, leadership has a good approximation of the new organization. The belief that a particular outcome is certain can be a problem in itself.

Agility and the ability to detect when a change is not working and to alter its direction are very important. Detection requires that the organization listens to the feedback of those who are waist-deep in the change and is able to discern the difference between the organizational noise that comes with any change and the organizational noise that re�lects real problems. Altering direction requires that the leadership not cling to ideas that cannot work and also be willing to admit to the organization that it was wrong about some aspects of the change.

Initiative Undernourishment There may be a temptation, particularly as the leadership tries to accomplish as much as it can with a constrained budget, to tell a project team, “I know you asked for ten people, but we're going to push you to do it with �ive.” The leadership may believe that such bravado will make the team work extra hard and, through heroic efforts, complete the project in a grand fashion.

However, bravado may turn out to be bellicose stupidity. This approach may doom a project, despite the valiant efforts of the team to do the impossible. Another form of undernourishment involves placing staff members other than the best people on the initiative. If the initiative is very important, then it merits using the best people possible and freeing up their time so they can focus on the initiative. An organization's best staff members are always in demand, and there can be a temptation to say that it would be too dif�icult to pull them away from other pressing issues.

They are needed elsewhere and this decision is dif�icult. However, if the initiative is critical to the organization, then those other demands are less important and can be given to someone else. Critical organizational initiatives should not be staffed with the junior varsity.

Failure to Anticipate Short-Term Disruptions Any major change will lead to short-term problems and disruptions in operations. Even though current processes can be made better, they are working and staff members know how to make them work. When processes are changed, there is a shakeout period as staff members adjust and learn how to make the new processes work well. At times, adjusting to the

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new application system is the core of the disruption. A shakeout can go on for months and degrade organizational performance. Service will deteriorate. Days in accounts receivable will climb. Balls will be dropped in many areas. The organization can misinterpret these problems as a sign that the initiative is failing.

Listening closely to the issues and suggestions of the front line is essential during this time. These staff members need to know that their problems are being heard and that their ideas for �ixing these problems are being acted on. People often know exactly what needs to be done to remove system disruptions. Listening to and acting on their advice also improves their buy-in to the change.

Although working hard to minimize the duration and depth of disruption, the organization also needs to be tolerant during this period and to appreciate the low-grade form of hell that staff members are enduring. It is critical that this period be kept as short and as pain free as possible. If the disruption lasts too long, staff members may conclude that the change is not working and abandon their support.

Lack of Technology Stability and Maturity Information technology may be obviously immature. New technologies are being introduced all the time, and it takes time for them to work through their kinks and achieve an acceptable level of stability, supportability, and maturity. Some forms of social networking are current examples of information technologies that are in their youth.

Organizations can become involved in projects that require immature technology to play a critical role. This clearly elevates the risk of the project. The technology will suffer from performance problems, and the organization's IT staff members and the technology supplier may have a limited ability to identify and resolve technology problems. Organizational members, tired of the instability, become tired of the project and it fails.

In general, it is not common, nor should it often be necessary, for a project to hinge on the adequate performance of new technology. A thoughtful assessment that a new technology has potentially extraordinary promise and that the organization can achieve differential value by being an early adopter should precede any such decision. Even in these cases, pilot projects that provide experience with the new technology while limiting the scope of its implementation (which minimizes potential damage) are highly recommended.

Projects can also get into trouble when the amount of technology change is extensive. For example, the organization may be attempting to implement, over a short period of time, applications from several different vendors that involve different operating systems, network requirements, security models, and database management systems. This broad scope can overwhelm the IT department's ability to respond to technology misbehavior.

How to Avoid These Mistakes Major IT projects fail in many ways. However, a large number of these failures can be mitigated by management attention to risk factors. Few management teams and senior leaders start IT projects hoping that failure is the outcome. Summarizing our discussion in this section produces a set of recommendations that can help organizations reduce the risk of IT initiative failure:

Ensure that the objectives of the IT initiative are clear.

Communicate the objectives and the initiative, and test the degree to which organizational members have bought into them.

Publicly demonstrate conviction by “being there” and showing resolve during tough decisions.

Respect organizational inertia, and keep hammering away at it.

Distance the project from any organizational baggage, perhaps through a thoughtful choice of project sponsors and managers.

Change the reward system if necessary to create incentives for participants to work toward project success.

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Accept and welcome the debate that surrounds projects, invite bad news, and do not hang those who make mistakes.

Address complexity by breaking the project into manageable pieces, and test for evidence that the project might be at risk from trying to do too much all at once.

Realize that there is much you do not know about how to change the organization or the form of new processes; be prepared to change direction and listen and respond to those who are on the front line.

Supply resources for the project appropriately, and assign the project to your best team.

Try to limit the duration and depth of the short-term operational disruption, but accept that it will occur.

Ensure and communicate regular, visible progress.

Be wary of new technology and projects that involve a broad scope of information technology change.

These steps, along with solid project management, can dramatically reduce the risk that an IT project will fail. However, these steps are not foolproof. Major IT projects, particularly those accompanied by major organizational change, will always have a nontrivial level of risk.

There will also be times when a review of the failure factors indicates that a project is too risky. The organization may not be ready; there may be too much baggage, too much inertia to overcome; the best team may not be available; the organization may not be good at handling con�lict; or the project may require too much new information technology. Projects with considerable risk should not be undertaken until progress has been made in addressing the failure factors. Management of IT project risk is a critical contributor to IT success.

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13.4 IT Effectiveness Several studies have examined organizations that have been particularly effective in the use of IT (McAfee & Brynjolfsson, 2008; McKenney, Copeland, & Mason, 1995; Ross, Beath, & Goodhue, 1996; Sambamurthy & Zmud, 1996; Weill & Broadbent, 1998). Determining effectiveness is dif�icult, and these studies have de�ined organizations that show effectiveness in IT in a variety of ways. Among them are organizations that have developed information systems that de�ined an industry (as Amazon has altered the retail industry, for example), organizations that have a reputation for being effective over decades (such as Bank of America), and organizations that have demonstrated exceptional IT innovation (Amazon.com (http://Amazon.com) for example).

The studies have attempted to identify those organizational factors or attributes that have led to or created the environment in which effectiveness has occurred. In other words, the studies have sought to answer the question, what are the organizational attributes that result in some organizations developing truly remarkable IT prowess?

If an organization understands these attributes and desires to be very effective in its use of IT, then it is in a position to develop strategies and approaches to create or modify its own attributes. For example, one attribute is having strong working relationships between the IT function and the rest of the organization. If an organization �inds that its own relationships are weak or dysfunctional, strategies and plans can be created to improve them.

The studies suggest that organizations that aspire to high levels of effectiveness and innovation in their application of IT must take steps to ensure that the core capacity of the organization to achieve such effectiveness is developed. It is a critical IT responsibility of organizational leadership to continuously (year in and year out) identify and accomplish the steps needed to improve overall effectiveness in IT. The development of this capacity is a challenge different from the challenge of identifying speci�ic opportunities to use IT in the course of improving operations or enhancing management decision making. For an analogy, consider running. A runner's training, injury management, and diet are designed to ensure the core capacity to run a marathon. This capacity development is different from developing an approach to running a speci�ic marathon, which must consider the nature of the course, the competing runners, and the weather.

Although having somewhat different conclusions (resulting in part from somewhat different study questions), the studies have much in common regarding capacity development.

Individuals and Leadership Matter It is critical that the organization possess talented, skilled, and experienced individuals. These individuals will occupy a variety of roles: CEO, CIO, IT staff members, and user middle managers. These individuals must be strong contributors.

Although such an observation may seem trite, too often organizations, dazzled by the technology or the glori�ied experiences of others, embark on technology crusades and substantive investments that they have insuf�icient talent or leadership to effect well. The studies found that leadership is essential. Leaders must understand the vision, communicate the vision, be able to recruit and motivate a team, and have the staying power to see large IT implementations through several years of work with disappointments, setbacks, and political problems along the way.

Relationships Are Critical Not only must the individual players be strong but also the team must be strong. There are critical senior executive, IT executive, and project team roles that must be �illed by highly competent individuals, and great chemistry must exist between the individuals in these distinct roles. Substitutions among team members, even when involving a replacement by an equally strong individual, can diminish the team. This is as true in IT innovation as it is in sports. Political turbulence diminishes the ability to develop a healthy set of relationships among organizational players.

The Technology and the Technical Infrastructure Both Enable and Hinder New technologies can provide new opportunities for organizations to embark on major transformations of their activities. We have seen this in retail and music distribution. This implies that the health care CIO must have not only superior

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business and clinical understanding but also superior understanding of the technology. This does not imply that CIOs must be able to rewrite operating systems as well as the best system programmers, but it does mean that they must have superior understanding of the maturity, capabilities, and possible evolution of various information technologies. Several innovations have occurred because an IT group was able to identify and adopt an emerging technology that could make a signi�icant contribution to addressing a current organizational challenge. The studies also stress the importance of well- developed technical architecture. Great architecture matters. Possessing state-of-the-art technology can be far less important than having a well-architected infrastructure.

The Organization Must Encourage Innovation The organization's (and the IT department's) culture and leadership must encourage innovation and experimentation. This encouragement needs to be practical and goal directed: a real business problem, crisis, or opportunity must exist, and the project must have budgets, political protection, and deliverables.

True Innovation Takes Time Creating visionary applications, making major organizational changes, or establishing an exceptional IT asset takes time and a lot of work. In the organizations studied it often took �ive to seven years for the innovation to fully mature and for the organization to recast itself. Innovation will proceed through phases that are as normative as the passage from being a child to being an adult. Innovation, similar to the maturation of a human being, will see some variations in timing, depth, and success in moving through phases.

Evaluation of IT Opportunities Must Be Thoughtful Visionary and even more pedestrian IT innovations should be analyzed and studied thoroughly. Nonetheless, organizations engaged in launching a major IT initiative should also understand that a large amount of vision, management instinct, and “feel” often guides the decision to initiate investment and continue investment. For example, what is the strategic and clinical value of an integrated EHR across the continuum? The organization that has had more experiences with IT, and more successful experiences, will be more effective in the evaluation (and execution) of IT initiatives.

Processes, Data, and Business Model Change Form the Basis of an IT Innovation All the strategic initiatives studied were launched from management's fundamental understanding of current organizational limitations. Strategic initiatives should focus on the core elements to be discussed following in this chapter as the basis for achieving an IT-based advantage: signi�icant leveraging of processes, expanding and capitalizing on the ability to gather critical data, and enabling new business models. Often an organization can pursue all three simultaneously.

Alignment Must Be Mature and Strong The alignment between the IT activities and the business challenges or opportunities must be strong. It should also be mature in the sense that it depends on close working relationships rather than methodologies.

The IT Asset Is Critical Strong IT staff members, well-crafted architecture, and a superb CIO are critical contributors to success. There is substantial overlap between the factors identi�ied in these studies and the components of the IT asset.

An overall critical factor in organizations being effective in using IT is the skills and orientation of senior leadership. Earl and Feeney (2000) assessed the characteristics and behaviors of senior leaders (in this case CEOs) who were actively engaged and successful in the strategic use of IT. These leaders were convinced that IT could and would change the organization. They placed the IT discussion high on the strategic agenda. They looked to IT to identify opportunities to

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make signi�icant improvements in organizational performance, rather than viewing the IT agenda as secondary to strategy development. They devoted personal time to understanding how their industry and their organization would evolve as IT evolved. And they encouraged other members of the leadership team to do the same.

Perspective Principles for Higher Performance

Robert Dvorak, Endre Holen, David Mark, and William Meehan have identi�ied six principles at work in a high- performance IT function:

IT is a business-driven line activity and not a technology-driven IT staff function. Non-IT managers are responsible for selecting, implementing, and realizing the bene�its of new applications. IT managers are responsible for providing cost-effective infrastructure to enable the applications.

IT funding decisions are made on the basis of value. Funding decisions require thorough business cases. IT decisions are based on business judgment and not technology judgment.

The IT environment emphasizes simplicity and �lexibility. IT standards are centrally determined and enforced. Technology choices are conservative, and packaged applications are used wherever possible.

IT investments have to deliver near-term business results. The 80-20 rule is followed for applications, and projects are monitored relentlessly against milestones.

The IT operation engages in year-to-year operation productivity improvements.

A business-smart IT function and an IT-smart business organization are created. Senior leadership is involved in and conversant with IT decisions. IT managers spend time developing an understanding of the business.

Source: Dvorak, Holen, Mark, and Meehan (1997, p. 166).

Earl and Feeney (2000) observed �ive management behaviors in these leaders:

They studied, rather than avoided, IT. They devoted time to learning about new technologies and, through discussion and introspection, developed an understanding of the ways in which new technologies might alter organizational strategies and operations.

They incorporated IT into their vision of the future of the organization and discussed the role of IT when communicating that vision.

They actively engaged in IT architecture discussions and high-level decisions. They took time to evaluate major new IT proposals and their implications. They were visibly supportive of architecture standards. They established funds for the exploration of promising new technologies.

They made sure that IT was closely linked to core management processes:

They integrated the IT discussion tightly into the overall strategy development process. This often involved setting up teams to examine aspects of the strategy and having both IT and business leaders at the table.

They made sure IT investments were evaluated as one component of the total investment needed by a strategy. The IT investments were not relegated to a separate discussion.

They ensured strong business sponsorship for all IT investments.

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Business sponsors were accountable for managing the IT initiatives and ensuring the success of the undertaking.

They continuously pressured the IT department to improve its ef�iciency and effectiveness and to be visionary in its thinking.

CEOs and other members of the leadership team have an extraordinary impact on the tone, values, and direction of an organization. Hence, their beliefs and daily behaviors have a signi�icant impact on how effectively and strategically information technology is applied within an organization.

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13.5 The Competitive Value of IT For many years organizations across many industries have attempted to use (and at times succeeded in using) IT to achieve a competitive advantage. Decades ago airlines used travel reservation systems as an advantage, listing their �lights before those of a competitor. At one time banks used personal computer–based banking as an IT-based advantage, making it easier for customers to manage their assets from home and reducing the need to visit a branch bank. Amazon is a superb example of an organization that used IT to achieve an advantage over its retail rivals. Amazon was able to offer a very broad range of products without incurring the expense of setting up hundreds of retail stores.4 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c13anchor-7#c13-note-0004)

Sources of Advantage These efforts have shown that IT can enable a signi�icant improvement in organizational performance and assist in achieving an advantage, especially when it is used to leverage core organizational processes, support the collection of critical data, or enable the development of new business models.

Leverage of Organizational Processes

Information technology can be applied in an effort to improve organizational processes by making them faster, less error prone, less expensive, and more convenient. However, improved organizational competitive position through process gains is not an automatic result of IT implementation.

The right processes must be chosen. The leverage of processes is most effective when the processes being addressed are critical, core processes that customers use to judge the performance of the organization or to de�ine the core business of the organization.

For example, patients are more likely to judge a provider organization on the basis of its ambulatory scheduling processes and billing processes than they are on its accounts payable and human resources processes. Making diagnostic and therapeutic decisions is a core provider organization process that is the backbone of its business.

Organizations must also examine and redesign processes. If underlying problems with processes are not remedied, the IT investment can be wasted or diluted. IT applications can result in existing processes continuing to perform poorly, only faster. Moreover, it can be harder to �ix �lawed processes after the application of IT because the new IT-supported process now has an additional source of complexity, cost, and ossi�ication to address: the new computer system.

IT can be applied to signi�icant competitive advantage if processes are chosen wisely and are reengineered skillfully.

Rapid and Accurate Provision of Critical Data

Organizations de�ine critical elements of their plans, operations, and environment. These elements must be monitored to ensure the plan is working, service and care quality are high, the organization's �iscal situation is sound, and the environment is behaving as anticipated. Clearly data are required to perform such monitoring.

In addition to their utility in monitoring, data can be used to guide management actions. Internet-based retailers use purchase data to target their advertisements. Providers use data on care costs and quality to devise initiatives to improve outcomes. However, obtaining and reporting critical data is not easy.

Data quality may be limited and incomplete. For example, although physicians are using an EHR, they may not be recording all of a patient's problems, and many of their entries are unstructured free text. There may be confusion about which patients belong on speci�ic physician panels. There can be signi�icant disagreements about the de�inition of “a visit.”

Using IT to improve performance through the capture of critical data requires addressing process problems that hinder data capture, developing user incentives to record good data, and engaging in dif�icult conversations about data meaning.

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Developing New Business Models

A business model refers to an organization's plans about what it will do, how it will do it, and why that “what and how” will lead to revenue that will enable the organization to sustain itself. For example, a hospital will have a business model that looks something like this:

We will cure you of your disease or repair you if you experience trauma (the what).

We will do so by hiring clinicians, providing acute care beds, developing ancillary services such as the laboratory, and implementing clinical protocols (the how).

You will pay us for doing so (primarily through health insurance).

When IT is used competitively to enable new business models, most of these efforts focus on the how. For example:

Telehealth visits can be conducted virtually rather than face-to-face, which improves convenience.

Uber uses information technology to replace taxi cab employees with renting of driver capacity by independent contractors and providing a very easy way to order a ride and pay for it (which lowers Uber's costs and improves rider convenience).

The Internet of Things enables manufacturers of equipment to monitor equipment performance to detect potential issues and dispatch repair staff members before the equipment breaks, which improves the how of maintaining equipment.

At times IT can enable capabilities that were previously impractical. Gathering real-time physiological data from a patient at home was not practical until the advent of mobile devices and the Internet. eBay enabled the development of a global auction using the Internet.

Observations on IT Use for Competitive Advantage IT has been used competitively by hundreds of organizations across a range of industries over the course of multiple decades. These experiences have taught us several overall lessons.

Obtaining and Sustaining an Advantage

It is very dif�icult to obtain a competitive advantage based solely on the implementation of a particular application or technology. Competitors, noting the advantage, are quick to attempt to copy the application, lure away the original developers, or obtain a version of the application from the same or different vendor. Moreover, the advantage rarely results from the acquisition of a system but from skilled process changes that thoughtfully understand how to differentiate an organization from its competitors.

The advantage does not come from the application system. In an industry in which most applications can be purchased from a vendor, it is almost impossible for the application to provide an advantage. If you can buy an EHR from vendor x, so can your competitor, and any advantage is short-lived.

Any IT-enabled advantage results from using the technology to improve processes, gather critical data, and de�ine new business models. Advantage lies in the application of the technology and not the possession of the technology.

Technology Is a Tool

Information technology can provide a competitive advantage. However, IT has no magic properties. In particular, technology cannot overcome poor strategies, inadequate management, inept execution, or major organizational limitations. IT implementation cannot overcome badly managed process change, insuf�icient political will to standardize data, or faulty business models.

The early experiences of Internet-based retailers have highlighted the problems created by sloppy inventory management, poor understanding of customer buying behaviors such as returning purchases, and insuf�icient knowledge

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of customer price tolerance.

Referring physicians will not �ind valuable and probably will not use a system that gives them access to hospital data if the consulting physicians at the hospital are remiss in getting their consult notes completed on time or at all.

McAfee and Brynjolfsson (2008) note a signi�icant separation in the spread in the gross margin, over time, between those companies performing in the top 25 percent of their industry versus those performing in the bottom 25 percent as measured by variables such as return on capital (see Figure 13.2 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c13anchor-6#c13-�ig-0002) ). Beginning in the late 1990s the gap between winners and losers was widening.

Figure 13.2 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c13anchor-6#backF2) Gross margin performance differences in high IT–use industries

Source: McAfee and Brynjolfsson (2008). Reproduced with permission of Harvard Business School Publishing.

McAfee and Brynjolfsson (2008) made two major observations. First, IT had become suf�iciently potent that its ability to advance organizational performance had become very signi�icant. The personal computers of the 1980s were important but were not powerful enough to enable one organization to signi�icantly outperform another. However, the Internet, which began to be used by business in the late 1990s, was powerful enough. Information technology had come of age. Second, although potent technologies had become available, they were available to all. So why did the separation in performance occur? Why didn't all organizations see improvement? The answer is simple—some organizations were very skilled at leveraging the technology to improve competitive performance and others were not.

As an analogy, a skilled carpenter and a novice will be similarly effective in constructing a house if both use crude tools. But if you give them sophisticated tools, the skilled carpenter will signi�icantly outperform the novice.

When one looks back at organizations that have been effective in the strategic application of IT over a reasonably long time, one sees what looks like a series of singles punctuated by an occasional leap, a grand slam (McKenney, Copeland, & Mason, 1995). One doesn't see a progression of grand slams or, in the parlance of the industry, killer applications (Downes & Mui, 1998).

In the course of improving processes, changing business models, and gathering data, organizations carry out a series of initiatives that improve their performance. The vast majority of these initiatives do not by themselves fundamentally alter the competitive position of the organization, but in the aggregate they make a signi�icant contribution, just as the difference between a great hotel and a mediocre hotel is not solely the presence of clean sheets or hot water but one thousand such things.

In addition, at various points in time, the organization may have an insight that leads to a major leap in its application of IT to its performance. For example, airlines, having developed their initial travel reservation systems, continued to improve them. At some point they realized that the data gathered by a reservation system had enormous potency and frequent �lyer programs resulted. Google realized that it had a very large base of users that accessed the site often for

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searches. Google could capitalize on this base by introducing other, nonsearch offerings such as YouTube. No organization has ever delivered a series of killer, or grand slam, applications in rapid succession.

Organizations must develop their IT asset in such a way that they can affect the types of continuous improvement that managers and medical staff members will see as possible, day in and day out. For example, in an ideal world an organization would be able to capitalize on the improvements in ambulatory scheduling that a middle manager thinks up and also be able to capitalize on a thousand other good ideas and opportunities. The organization must also develop antennae that sense the possibility of a leap and the ability to focus that enables it to bring about the systems needed to make the leap. Ensuring that these antennae are working is one of the key functions of the CIO. The resulting pattern may look like the graph line in Figure 13.3 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c13anchor-6#c13- �ig-0003) —continuous improvement (singles) in performance using IT punctuated by periodic leaps or grand slams.

Figure 13.3 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c13anchor-6#backF3) Singles and grand slams

It is also clear that organizations have a limited ability to see more than one leap at a time. Hence, they should be cautious about visions that are too visionary or that have a very long time horizon. Organizations have great dif�iculty understanding a world that is signi�icantly different from the one they inhabit now or that can be only vaguely understood in the context of the next leap. We might understand frequent �lyer programs now, but they were not well understood, nor was their competitive value well understood, at the time they were conceived. Moreover, the organizational changes required to support and capitalize on a leap can take years—�ive to seven years at times (McKenney, Copeland, & Mason, 1995).

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Summary The management and leadership of an organization play signi�icant roles in determining the effectiveness of information technology. This chapter discussed the role of developing and maintaining IT governance mechanisms—the processes, procedures, and roles that the organization uses to make IT decisions. These decisions cover diverse terrain: budgets, roles, and responsibility distribution and the process for resolution of IT issues.

The processes and structure of developing the IT budget were reviewed. Budgets are critical. They turn strategy into reality by providing (or not) the resources needed to carry out the strategy.

Management is a major contributor to the success or failure of IT initiatives. The chapter discusses factors, under management's control, that often derail IT initiatives and suggested steps that can be taken to mitigate those factors. The chapter also reviewed attributes of organizations that have been highly effective in their use of IT for many years.

Perpsective How Great Companies Use IT

In his seminal book Good to Great, Jim Collins (2001) identi�ied companies that made and sustained a transition from being a good company to being a great company. His research noted that these companies had several consistent orientations to IT:

They avoided IT fads but were pioneers in the application of carefully selected technologies.

They became pioneers when the technology showed great promise in leveraging that which they were already good at doing (their core competency) and that which they were passionate about doing well.

They used IT to accelerate their momentum toward being a great company but did not use IT to create that momentum. In other words, IT came after the vision had been set and the organization had begun to move toward that vision. IT was not used to create the vision and start the movement.

They responded to technology change with great thoughtfulness and creativity driven by a burning desire to turn unrealized potential into results. Mediocre companies often reacted to technology out of fear, adopting it because they were worried about being left behind.

They achieved dramatically better results with IT than did rival companies using the exact same technology.

They rarely mentioned IT as being critical to their success.

They “crawled, walked, and then ran” with new IT even when they were undergoing radical change.

Finally, the chapter reviewed lessons learned from the use of IT to improve an organization's competitive position. Increased competiveness can occur when IT issues are applied to leverage critical organizational processes, address information needs, and enable new business models. However, we are reminded that IT is a tool and its use requires skill.

Key Terms Effectiveness in IT

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IT budget

IT governance

IT responsibilities

IT steering committee

Senior management responsibilities

User responsibilities

Learning Activities Interview a member of the senior leadership team of a health care organization on the subject of IT governance. Describe the organization's approach to IT governance and assess its effectiveness.

Interview a health care CIO and a member of the senior leadership team of the same health care organization separately. Ask each of them to describe the process of preparing the IT budget. Compare and discuss their responses.

Interview senior leaders of a health care organization and ask them to describe how they apply IT to improve their competitiveness.

Interview a health care CIO and a member of the senior leadership team of a health care organization separately. Ask each of them to describe the distribution of IT and user responsibilities. Compare and discuss their responses.

Assume that you are a consultant who has been asked to assess the effectiveness of an organization in applying IT. Construct a questionnaire (twenty questions) to guide the interviews of organizational leaders that you would conduct to determine effectiveness.

Notes 1. (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c13anchor-2#backTNT1) List quoted from Applegate,

Austin, & McFarlan, 2007, McGraw-Hill © 2007, is reproduced with permission of The McGraw-Hill Companies.

2. (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c13anchor-2#backTNT2) List quoted from Applegate, Austin, & McFarlan, 2007, McGraw-Hill © 2007, is reproduced with permission of The McGraw-Hill Companies.

3. (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c13anchor-2#backTNT3) List quoted from Applegate, Austin, & McFarlan, 2007, McGraw-Hill © 2007, is reproduced with permission of The McGraw-Hill Companies.

4. (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c13anchor-6#backTNT4) This section adapted with permission of Healthcare Financial Management Association from J. Glaser, “The Competitive Value of Healthcare IT,” Healthcare Financial Management, July 2007, 61(7), 36–40.

References Applegate, L., Austin, R., & McFarlan, W. (2007). Corporate information strategy and management (7th ed.). Boston, MA: McGraw-Hill.

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Brown, C., & Sambamurthy, V. (1999). Repositioning the IT organization to enable business transformation. Chicago, IL: Society for Information Management.

Cash, J., McFarlan, W., & McKenney, J. (1992) Corporate information systems management: The issues facing senior executives. Chicago, IL: Irwin.

Collins, J. (2001). Good to great. New York, NY: HarperCollins.

Cook (2007, July 20). How to spot a failing project. CIO. Retrieved November 2008 from http://www.cio.com/article/124309/How_to_Spot_a_Failing_Project (http://www.cio.com/article/124309/How_to_Spot_a_Failing_Project)

Downes, L., & Mui, C. (1998). Unleashing the killer app. Boston, MA: Harvard Business School Press.

Drazen, E., & Straisor, D. (1995). Information support in an integrated delivery system. Paper presented at the annual Healthcare Information and Management Systems (HIMSS) conference, Chicago.

Dvorak, R., Holen, E., Mark, D., & Meehan, W., III. (1997). Six principles of high- performance IT. McKinsey Quarterly, 3, 164–177.

Earl, M., & Feeney, D. (2000). How to be a CEO for the information age. MIT Sloan Management Review, 41(2), 11–23.

Feld, C., & Stoddard, D. (2004). Getting IT right. Harvard Business Review, 82(2), 72–79.

McAfee, A., & Brynjolfsson, E. (2008). Investing in the IT that makes a competitive difference. Harvard Business Review, 86(7–8), 98–107.

McKenney, J., Copeland, D., & Mason, R. (1995). Waves of change: Business evolution through information technology. Boston, MA: Harvard Business School Press.

Ross, J., Beath, C., & Goodhue, D. (1996). Develop long-term competitiveness through IT assets. MIT Sloan Management Review, 38(1), 31–42.

Sambamurthy, V., & Zmud, R. (1996). Information technology and innovation: Strategies for success. Morristown, NJ: Financial Executives Research Foundation.

Weill, P., & Broadbent, M. (1998). Leveraging the new infrastructure. Boston, MA: Harvard Business School Press.

Weill, P., & Ross, J. (2004). IT governance: How top performers manage IT decision rights for superior results. Boston, MA: Harvard Business School Press.

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Chapter 14 Health IT Leadership Case Studies

Faculty members and others who teach health administration students are often in search of case studies that can be used to help students apply theory and concepts to real-life IT management situations, encourage problem-solving and critical thinking, and foster discussion and collaboration among students. This chapter provides a compendium of case studies from a variety of health care organizations and settings. It is intended to serve as a supplement to the preceding chapters and as a resource to faculty members and students. Many of these case studies were originally written by working health care executives enrolled as students in the doctoral program in health administration offered at the Medical University of South Carolina. We wish to acknowledge and thank these students for allowing us to share their stories and experiences with you:

Penney Burlingame Randall Jones

Barbara Chelton Catrin Jones-Nazar

Stuart Fine Ronald Kintz

David Freed George Mikatarian

David Gehant Michael Moran

Patricia Givens Lorie Shoemaker

Shirley Harkey Gary Wilde

Victoria Harkins

Most of the cases begin with background information that includes a description of the setting, the current information system (IS) challenge facing the organization, and the factors that are felt to have contributed to the current situation. (All real names and identifying information have been changed from the original cases to protect the identity of the individuals and organizations involved.) Following each case is a set of recommended discussion questions. To the extent possible, the cases are organized by the corresponding chapter(s) to which they relate (see Table 14.1 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c14start#c14-tbl-0001) ).

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Table 14.1 (http://content.thuzelearning.com/books/Wager.8743.17.1/sections/c14start#backT1) List of cases and corresponding chapters

Title of Case Corresponding Chapter(s)

Case 1: Population Health Management in Action Chapter 4 (c04.xhtml)

Case 2: Registries and Disease Management in the PCMH Chapter 4 (c04.xhtml)

Case 3: Implementing a Capacity Management Information System

Chapter 5 (c05.xhtml)

Case 4: Implementing a Telemedicine Solution Chapter 5 (c05.xhtml)

Case 5: Selecting an EHR for Dermatology Practice Chapter 5 (c05.xhtml)

Case 6: Watson's Ambulatory EHR Transition Chapter 5 (c05.xhtml)

Case 7: Concerns and Workarounds with a Clinical Documentation System

Chapter 6 (c06.xhtml)

Case 8: Conversion to an EHR Messaging System Chapter 6 (c06.xhtml)

Case 9: Strategies for Implementing CPOE Chapter 6 (c06.xhtml)

Case 10: Implementing a Syndromic Surveillance System Chapters 6 (c06.xhtml) and 12 (c12.xhtml)

Case 11: Planning an EHR Implementation Chapters 6 (c06.xhtml) and 12 (c12.xhtml)

Case 12: Replacing a Practice Management System Chapters 6 (c06.xhtml) and 13 (c13.xhtml)

Case 13: Implementing Tele-psychiatry in a Community Hospital Emergency Department

Chapters 6 (c06.xhtml) , 7 (c07.xhtml) , and 13 (c13.xhtml)

Case 14: Assessing the Value and Impact of CPOE Chapter 7 (c07.xhtml)

Case 15: Assessing the Value of Health IT Investment Chapter 7 (c07.xhtml)

Case 16: The Admitting System Crashes Chapter 10 (c10.xhtml)

Case 17: Breaching the Security of an Internet Patient Portal Chapter 10 (c10.xhtml)

Case 18: The Decision to Develop an IT Strategic Plan Chapter 12 (c12.xhtml)

Case 19: Selection of a Patient Safety Strategy Chapter 12 (c12.xhtml)

Case 20: Strategic IS Planning for the Hospital ED Chapter 12 (c12.xhtml)

Case 21: Board Support for a Capital Project Chapters 12 (c12.xhtml) and 13 (c13.xhtml)

We hope you �ind the cases thought-provoking and useful in applying the concepts covered in this book to what is happening in health care organizations throughout our nation. We have also included at the end of the chapter a listing of other published cases and webinars that may be useful to you and your students.

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14.1 Case 1: Population Health Management in Action Although the integration of patient-centered medical homes and accountable care organizations into the health system is still emerging—as are best practices and key learnings from these early efforts—there have been myriad examples demonstrating encouraging returns and improvement in quality of care. The Patient-Centered Primary Care Collaborative recently pro�iled several organizations that have adopted patient health management (PHM) tools and strategies to address the preventive and chronic care needs of their patient populations.

Bon Secours Virginia Medical Group

Richmond, VA

Provider Type: Multispecialty group practice

Locations: 140

Patients: 25,000 (Virginia)

A pioneer in implementing medical home and accountable care initiatives, Bon Secours has dedicated itself to executing a sustainable care delivery model that is in alignment with health care reform across its providers and locations. Bon Secours's transformation into an organization that embraces PHM is the result of a systematic strategy to reengineer primary care practices, integrate new technologies into care team work�lows, and engage patients in their care.

Bon Secours took a leap of faith in implementing these changes, acting on the belief that payers would come to them if they built a viable model. And payers did. The organization was selected as an early participant in the Medicare Shared Savings Program. It has also signed value-based contracts with two commercial payers—CIGNA and Anthem—and is in negotiations with several more. These contracts provide a �inancial mechanism to expand and scale the medical home initiative and support ACO models. This case study examines in more detail Bon Secours's approach to position itself to achieve quality outcomes and �inancial success in the changing health care environment.

Bon Secours's Care Team Model The foundation of Bon Secours's strategy for value-based care is its medical home initiative—the Advanced Medical Home Project. The project began as a pilot �ive years ago. Since that time, eleven practices have earned NCQA recognition as patient-centered medical homes. One of the most signi�icant objectives of the Advanced Medical Home Project is to improve capacity—making it possible for care teams to double the size of their patient panel without overburdening themselves or sacri�icing quality of care.

At the heart of this medical home strategy is the effort to reengineer practices by creating high-performance physician-led care teams, which requires changes in work�low, new care coordination activities, and designed delegation of clinical responsibilities across the care team. To facilitate this process, Bon Secours has invested signi�icantly in embedding care managers into the primary care team. These nurse navigators are registered nurses (RNs) who are either board-certi�ied case managers or actively working toward certi�ication.

Each nurse navigator is assigned a panel of approximately 150 high-risk patients. He or she cultivates a personal relationship with these patients, usually through repeated phone contacts. Although most outreach is telephonic, navigators have the skill to assess which patients require face-to-face intervention. And because they are embedded in the practice, they can spend time with these patients doing assessments, care planning, and education.

Bon Secours's eHealth Strategies An important aspect of Bon Secours's strategy is implementing health information technology that empowers the care team to ef�iciently manage the health of their populations. They consider this technology—standardized across the medical group—as the key to enable them to scale their system for value-based care. As a �irst step, Bon Secours

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implemented an EHR and all its modules in every practice within the system. This gave them a strong foundation for documenting care and accessing health records across the enterprise.

Risk strati�ication. They were able to build a registry that could identify high-risk and high-utilization patients based on data such as number of medications or frequent visits to the emergency department. However, the organization recognized the need for a more robust, scalable registry that would drive ef�icient population health work�lows in their practices and enable analytics and predictive modeling across multiple clinical conditions.

Integrating their EHR with a PHM platform, Bon Secours is able to aggregate all source data into a population-wide registry that enables the organization to implement multiple quality-improvement programs simultaneously. The registry strati�ies the population by risk—providing a total population view while enabling each care team to drill down to the data they need about cohorts and individual patients. The system enables care teams within the practice to monitor their patients' health status and take action by delivering timely and appropriate care interventions. Because the system automates these interventions, care teams are able to communicate with many patients at once.

Automated outreach. A signi�icant priority for Bon Secours has been preventing thirty-day readmissions. The medical group uses an automated outreach system to identify discharged patients, link them to a primary care provider (PCP), and pinpoint those who are at high risk for readmission. Flagged patients are then called within twenty-four to seventy-two hours to reinforce discharge instructions, make sure their medications are reconciled, and set up an appointment with the primary care team within �ive to ten days of discharge. Bon Secours will soon implement a readmissions solution to automate the process of calling discharged patients, asking them to complete a short assessment, and escalating cases as needed based on their feedback.

Personal health records. Another strategy for patient engagement is activating patients on an electronic personal health record (PHR), which allows patients to view clinical results and communicate conveniently with their caregivers via e- mail. Bon Secours works to gain physician consensus on policies that drive the use of PHR: physicians agreed to allow automatic release of normal results to the PHR, but abnormal results are held for 24 hours to enable the care team to contact the patient. The organization is relying on physicians and staff members to get patients active on the PHR to help them sign up on the spot in the exam room.

Challenges and Lessons Learned Gaining physician buy-in for reengineering practice work�low. The concept of the care team can be dif�icult for some physicians because they see themselves as the clinician and the rest of the team as support staff members. To help physicians embrace the care team and delegate patient-care tasks, Bon Secours placed tremendous emphasis on physician education. The organization also allows physicians to adjust some of the standardized care team protocols to meet the needs of their practice, which fosters ownership of the process and assures physicians that they remain in control.

Paying for the transition to value-based care. As mentioned previously, Bon Secours implemented its medical home model with the hope that payers would come to them if they built a viable program. CIGNA currently gives the organization a per-member per-month (PMPM) adjustment for care coordination. Anthem, the group's biggest payer, pays a care coordination fee and will change to PMPM in the coming year. Several more commercial payers are lined up to sign contracts with the group. However, this payer involvement is a relatively new development. For the �irst few years of the project, Bon Secours shouldered the expense. The organization is now poised to reap the rewards of its investment.

Bon Secours is also demonstrating signi�icant progress managing its CIGNA population. In the �irst six months of their value-based contract, they have achieved a 27 percent reduction in readmissions and are $1.8 million below their projected spend. They have hit many of their care quality metrics and need to improve their gap-in-care metrics only slightly to achieve the index necessary to qualify for gain sharing with CIGNA—a development that will bring a projected annual savings of $4 million.

Bon Secours's mantra for the future is “health care without walls.” The organization is aggressively pursuing remote, noninvasive monitoring for highly acute case management. Their vision is to bring care outside the four walls of the hospital into the patient's home using technology. They are operationalizing a geriatric medical home that will enable patients to age in place with home visits for preventive and acute management. They are also expanding their implementation of the PHM platform to include performance measurement at the group, site, and provider levels; feedback to providers on variance in care; and quality reporting. This added functionality for analytics and insight on the clinical and administrative levels will help the organization ensure that it is meeting the triple aim (to improve the patient

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experience of care, including quality and satisfaction; to improve the health of populations; and to reduce the per capita cost of health care).

Innovation Impact Thirty-day readmission rate for medical home patients was < 2 percent for two years.

Patient engagement scores were in the 97th percentile.

Patient outreach efforts generated approximately forty thousand unique patient visits for preventive, follow-up, or acute care, leading to $7 million increased revenue.

Source: Shaljian, M., & Nielsen, M. (2013). Managing populations, maximizing technology: Population health management in the medical neighborhood. Patient-Centered Primary Care Collaborative. Retrieved from https://pcpcc.org/resource/managing- populations-maximizing-technology (https://pcpcc.org/resource/managing-populations-maximizing-technology) . Used with permission.

Discussion Questions What do you think are the important take-home messages in this case?

What is your assessment of the approach Bon Secours has taken in embracing its commitment to population health management by investigating in different IT capabilities? How useful are capabilities such as risk strati�ication, automated outreach, and PHRs in improving quality while managing costs? Are there other tools that could have been useful? If so, what are they? How might they be used?

Bon Secours's mantra for the future is “health care without walls.” What might success in achieving this vision look like? What challenges may they face? How might they overcome these challenges?

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14.2 Case 2: Registries and Disease Management in the PCMH Union Health Center (UHC)

New York, NY

Provider Type: Community Health Center

Medical Home NCQA Level 3

Patients: 11,000

Of�ice Visits: 55,000

UHC's Care Team Model Union Health Center (UHC) embraced the patient-centered care team model very early on, which helped ease the transition to new work�lows, processes, and features that are critical to change management and quality improvement. UHC clinicians and staff members are assigned to clinical care teams, composed of physicians, nurse practitioners, physician assistants, nurses, medical assistants, and administrative staff members. The practice uses a full capitation model with standard fee-for-service and a fee-for-service plus care management payment model.

Ten years ago, UHC instituted the California Health Care Foundation's Ambulatory Intensive Caring Unit (AICU) model, which emphasizes intensive education and self-management strategies for chronic disease patients. The model relies heavily on the role of medical assistants (called patient care assistants or PCAs) and health coaches. Working closely with other members of the care team, PCAs and health coaches review and update patient information in the record, conducting personal outreach and self-management support, and providing certain clinical tasks. For instance, all PCAs have been trained to review measures (e.g., HgbA1C, blood pressure, and LDL cholesterol), provide disease education, and set and review patient health goals. A subset of higher-trained health coaches works more intensely with recently diagnosed diabetic patients or those patients whose condition is not well managed.

UHC's eHealth Strategies Patient registries. UHC uses patient registries to identify patients with speci�ic conditions to ensure that those patients receive the right care, in the right place, at the right time. In some instances, they use registries to target cases for chart reviews and assess disease management strategies. For example, patients with uncontrolled hypertension are reviewed to help identify treatment patterns, reveal any need for more provider engagement, and may indicate the need for care team work�low changes. In the future, UHC would like to construct queries that combine diagnosis groups with control groups and stratify patients by risk group. For example, care teams could pull a report of all patients over the age of sixty-�ive with multiple chronic conditions or recent emergency room admissions.

Maximizing time and expertise. UHC uses technology such as custom EHR templates to support PCAs and free up clinicians for more specialized tasks and complex patients. For example, a PCA or health coach taking the blood pressure of a high-risk diabetic patient has been trained to determine whether or not BP is controlled. If it is not controlled, the health coach checks the electronic chart for standard instructions on how to proceed and may carry out instructions noted in the record. Or, if no information is available he or she will consult with another provider to adjust and complete the note. Following all visits with PCAs or health coaches, the patient's record is electronically �lagged for review and signed by the primary care physician.

Working with medical neighbors. The teams also collaborate with on-site specialists, pharmacists, social workers, physical therapists, psychologists, and nutritionists to enhance care coordination and whole-patient care. UHC has also adopted curbside consultations and e-consults to reduce specialty of�ice visits. For example, if a hypertensive patient has uncontrolled blood pressure, the record is �lagged by the PCA for further follow-up with a physician or nurse practitioner, who may opt for an e-consult with the nephrologist to discuss recommendations. UHC also has a specialty coordination

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team—composed of two primary care physicians, one registered nurse, one PCA, and one health coach—which functions as a liaison between primary and specialty providers.

Customized reporting. With their most recent upgrade to a Meaningful Use–certi�ied version of their EHR, UHC will have the capacity to generate standardized Meaningful Use reports. UHC intends to construct queries that generate reports that group diagnosis groups with control groups and identify and manage subgroups of high-risk patients (or risk strati�ication). For example, care teams can run a report of all patients with diabetes that have an elevated LDL and have not been prescribed a statin.

Challenges and Lessons Learned Recruiting staff members with IT and clinical informatics expertise. Over the years, UHC has faced challenges in identifying and recruiting staff members with the right mix of IT and clinical informatics skills. Although effective in troubleshooting routine issues and hardware maintenance, UHC felt there was a clinical data analysis gap. To resolve this, UHC works closely with an IT consultant and also recruited a clinical informatics professional to work with providers and performance improvement staff members.

Consistent data entry. UHC's lack of consistent data entry rules and structured data �ields led to several challenges in producing reports and tracking patient subgroups. The problem stems from UHC's lack of internal data entry policies as well as the record's design. For instance, UHC cannot run reports on patients taking aspirin because this information may have been entered inconsistently across patient records. Moving forward, UHC will be implementing data entry rules and working closely with their vendor to maximize data capture.

Real-time data capture. UHC realized that by the time data reach the team, they may no longer be current. As a workaround they considered disseminating raw reports to clinical teams in real time, followed by tabulated, reformatted data. They are exploring the possibility of purchasing report writing software to streamline the process.

Managing multiple data sources. Similar to many practices, UHC pulls data from its billing system and clinical records, causing issues with data extraction. For example, pulling by billing codes does not provide the most accurate data when it comes to clinical conditions, health status, or population demographics. UHC recognized that to reduce errors in identifying patients and subgroups this will require custom reports.

Innovation Impact Forty-six percent reduction in overall annual health costs

Eighteen percent reduction in total cost of care

Signi�icant decline in emergency room visits, hospitalizations, and diagnostic services

Signi�icant improvements in clinical indicators for diabetic patients

Source: Shaljian, M., & Nielsen, M. (2013). Managing populations, maximizing technology: Population health management in the medical neighborhood. Patient-Centered Primary Care Collaborative. Retrieved from https://pcpcc.org/resource/managing- populations-maximizing-technology (https://pcpcc.org/resource/managing-populations-maximizing-technology) . Used with permission.

Discussion Questions Identify and discuss the various IT tools and staff resources UHC used to deploy its education and self- management strategies among patients with chronic disease. What are their strengths? Limitations?

UHC identi�ied several challenges and lessons learned in this case. Discuss each of these including UHC's approach to overcoming the challenges. What other strategies or approaches might you have considered? Why? Explain your rationale.

UHC used curb-side consultations and e-visits to reduce specialty of�ice visits. To what extent are these used by provider organizations in your community? Or others as evidenced by the literature? How effective have e-

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visits been? Are patients open to them?

How might other health care provider organizations learn from UHC's experiences? What are the critical take- home messages?

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14.3 Case 3: Implementing a Capacity Management Information System Doctors' Hospital is a 162-bed, acute care facility located in a small city in the southeastern United States. The organization had a major �inancial upheaval six years ago that resulted in the establishment of a new governing structure. The new governing body consists of an eleven-member authority board. The senior management of Doctors' Hospital includes the CEO, three senior vice presidents, and one vice president. During the restructuring, the CIO was changed from a full-time staff position to a part-time contract position. The CIO spends two days every two weeks at Doctors' Hospital.

Doctors' Hospital is currently in Phase 1 of a three-phase construction project. In Phase 2 the hospital will build a new emergency department (ED) and surgical pavilion, which are scheduled to be completed in eleven months.

Information Systems Challenge The current ED and outpatient surgery department have experienced tremendous growth in the past several years. ED visits have increased by 50 percent, and similar increases have been seen in outpatient surgery. Management has identi�ied that inef�icient patient �low processes, particularly patient transfers and discharges, have resulted in backlogs in the ED and outpatient areas. The new construction will only exacerbate the current problem.

Nearly a year ago Doctors' Hospital made a commitment to purchase a capacity management software suite to reduce the inef�iciencies that have been identi�ied in patient �low processes. The original timeline was to have the new system pilot- tested prior to the opening of the new ED and surgical pavilion. However, with the competing priorities its members face as they deal with major construction, the original project steering committee has stalled. At its last meeting nearly six months ago, the steering committee identi�ied the vendor and product suite. Budgets and timelines for implementation were proposed but not �inalized. No other steps have been taken.

Discussion Questions Do you think the absence of a full-time CIO has had an impact on this acquisition project? Why or why not?

What steps should the CIO take to ensure that the capacity management system will be purchased and implemented? What do you see as the critical �irst step in this process? Why?

Discuss who you think should serve on the project steering committee. Who should serve as chair? Why?

At this point, what do you think is a realistic time frame for implementation of the capacity management system? What steps can be taken to ensure the new timeline is met despite competing priorities?

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14.4 Case 4: Implementing a Telemedicine Solution Grand Hospital is located in a somewhat rural area of a Midwestern state. It is a 209-bed, community, not-for-pro�it entity offering a broad range of inpatient and outpatient services. Employing approximately 1,600 individuals (1,250 full-time equivalent personnel) and having a medical staff of more than 225 practitioners, Grand has an annual operating budget that exceeds $130 million, possesses net assets of more than $150 million, and is one of only a small number of organizations in this market with an A credit rating from Moody's, Standard & Poor's, and Fitch Ratings. Operating in a remarkably competitive market (there are roughly one hundred hospitals within seventy-�ive minutes' driving time of Grand), the organization is one of the few in the region—proprietary or not-for-pro�it—that has consistently realized positive operating margins. Grand attends on an annual basis to the health care needs of more than 11,000 inpatients and 160,000 outpatients, addressing more than 36 percent of its primary service area's consumption of hospital services. In expansion mode and currently in the midst of $57 million in construction and renovation projects, the hospital is struggling to recruit physicians to meet the health care needs of the expanding population of the service area and to succeed retiring physicians.

Grand has been an early adopter of health care information systems and currently employs a proprietary health care information system that provides (among other components) these services:

Patient registration and revenue management

EHRs with computerized physician order entry

Imaging via a PACS

Laboratory management

Pharmacy management

Information Systems Challenge Since 1995, Grand Hospital has transitioned from being an institution that consistently received many more inquiries than could be accommodated concerning physician practice opportunities to a hospital at which the average age of the medical staff members has increased by eight years. There is a widespread perception among physicians that because of such factors as high malpractice insurance costs, an absence of substantive tort reform, and the comparatively unfavorable rates of reimbursement being paid physician specialists by the region's major health insurer, this region constitutes a “physician-unfriendly” venue in which to establish a practice. Consequently, a need exists for Grand to investigate and evaluate creative approaches to enhancing its physician coverage for certain specialty services. These potential approaches include the effective implementation of IT solutions.

The �indings and conclusions of a medical staff development plan, which has been endorsed and accepted by Grand's medical executive committee and board of trustees, have indicated that because of needs and circumstances speci�ic to the institution, the �irst areas of medical practice on which Grand should focus in approaching this challenge are radiology, behavioral health crisis intervention services, and intensivist physician services. In the area of radiology, Grand needs quali�ied and appropriately credentialed radiologists available to interpret studies twenty-four hours per day, seven days per week. Similarly, it needs quali�ied and appropriately credentialed psychiatrists available on a 24/7 basis to assess whether behavioral health patients who present in the hospital's emergency room are a danger to themselves or to others, as de�ined by state statute, and whether these patients should be released or committed against their will for further assessment on an inpatient basis. Finally, inasmuch as Grand is a community hospital that relies on its voluntary medical staff members to attend to the needs of patients admitted by staff members such as some ED personnel, it also needs to have intensivist physicians available around the clock to assist in assessing and treating patients during times when members of the voluntary attending staff members are not present within or immediately available to the intensive care unit.

The leadership at Grand Hospital is investigating the potential application of telemedicine technologies to address the organization's need for enhanced physician coverage in radiology, behavioral health, and critical care medicine.

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Discussion Questions What are the ways in which Grand's early adoption of other health care information system technologies might affect its adoption of telemedicine solutions?

What do you see as the most likely barriers to the success of telemedicine in the areas of radiology, behavioral health, and intensive care? Which of these areas do you think would be the easiest to transition into telemedicine? Which would be the hardest? Why?

If you were charged by Grand to bring telemedicine to the facility within eighteen months, what are the �irst steps you would take? Whom would you involve in the planning process? Defend your response.

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14.5 Case 5: Selecting an EHR for Dermatology Practice Suppose you've just been hired as the practice administrator of an eight-physician dermatology practice. After several years of contemplation and serious deliberations, the physicians have made the strategic decision to invest in the selection and implementation of a facility-wide EHR system. They also want to replace their practice management system (which includes patient scheduling and billing). It's an older system that is rather clunky. Ideally, they'd like to �ind an integrated practice management system that has an EHR component.

Dan Brown, the current CEO of the physician organization, has very little knowledge of information systems technology. He has been reluctant to move toward an EHR system for many years, primarily because he heard stories from a few his colleagues in other specialty areas who have implemented EHRs in their practices and have found the systems to be highly cumbersome and disruptive to the patient care process. One of his best friends claims he “spends an extra hour or two a night in the of�ice because of the additional time demands of the EHR. He claims the system never seemed to work right.” Brown is convinced that there are not any great dermatology-related EHR products on the market, but with value-based payment looming, and the opportunity to improve quality of patient care, he's open to taking another look. In addition, one of their newest partners, Pam Martin, just �inished her residency program where EHRs were an integral part of her training. She is a big champion of the effort to select and implement an EHR. She has offered to help lead the effort. One of the other partners, John Harris, came back from a conference impressed with the vendor presentation from Allscripts and convinced it's the way the practice ought to go. The other physicians are nearing retirement and a little nervous about the possible disruption to the of�ice.

Information Systems Challenge Even though the patient records at the dermatology practice are paper-based, the practice has been using computerized practice management systems for patient scheduling and billing for years. Six months ago, they started to have a nurse enter physician-dictated notes into the paper record while in the examination room with the patient. The physician then reviews the notes at the end of the visit or day and signs off on them. This is in an effort to decrease the dictation and transcription that the practice had historically done and to get the nurses and physicians ready for the EHR. The expectation is that nurses will do the bulk of the data entry in the exam room while the physicians are seeing the patients. However, the physicians will have to review the documentation and sign off on all entries.

The practice currently has approximately four thousand patient visits per month, including 40 percent Medicare and 10 percent Medicaid.

Discussion Questions You are tasked with leading the team charged with the selection of the new practice management system, including EHR, for the practice.

You begin by convening a practice management–EHR selection team. Who would serve on the team? Who would serve as executive sponsor? Explain your rationale.

How might you conduct an EHR-readiness assessment for this practice? What factors will be important to consider? Why?

Develop a draft system selection plan for this practice. What do you envision will be the practice's greatest challenges in selecting a replacement practice management system and a new EHR? Explain your rationale.

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14.6 Case 6: Watson's Ambulatory EHR Transition Primary care physicians play a key role in the US health care delivery system. These providers integrate internal and external information with their clinical knowledge to determine the patient's treatment options. An effective ambulatory EHR is critical to supply physicians with the information they need to provide quality care and maximize their ef�iciency. This case involves the decision-making process to replace an inadequate EHR system in a primary care network owned by a community hospital. The IT challenge reviewed in this case will be the decision-making process that optimizes provider support for the new EHR while addressing the strategic plan requirements of data integration, clinical application, and practice management functionality.

Watson Community Association is a private, not-for-pro�it corporation that operates Watson Community Hospital (WCH), a two hundred–bed acute care facility located in Arizona. WCH has pursued a strategy of employing primary care physicians in their primary service area to provide convenient points of access for patients and to secure a primary care base for the specialists who use the hospital. WCH employs thirty-six physicians and seven mid-level providers in eight clinics, specializing in internal medicine, family practice, infectious disease, and gynecology.

Several years ago, the WCH board of directors adopted a plan to implement a system-wide EHR to, among other things, improve patient safety, integrate information from ancillary systems, and provide access to patient information for all WCH caregivers. In addition, the plan calls for an evaluation of the effectiveness of the WCH physician clinic organization's EHR.

The WCH clinics currently use the XYZ Data Systems Integrated EHR and Practice Management System. This system has been operational for four years. The XYZ system was chosen because of its compatibility with the hospital's Meditech platform. Physician needs and application functionality were secondary considerations. As a result, physician system adoption and support has been poor. Under prior leadership, the hospital IT department provided limited support for the XYZ EHR. The clinic organization was left to develop its own internal IT capabilities to manage the XYZ system and, as a result, the system has not been routinely updated.

The hospital has decided to stay with the Meditech platform to address the IT strategic plan for an integrated EHR. The clinic organization must now evaluate whether it is in their best interest to stay with the XYZ system, with strong Meditech compatibility, or move to a different EHR platform. The path of least resistance from the IT perspective would be to upgrade the XYZ system. This option offers the greatest integration and could be implemented much sooner. A new platform would require an evaluation and selection process and a signi�icant conversion. With either scenario, physician support will be critical to a successful transition.

EHR Project Plan The following sections detail a description of the planning process developed by the leadership team to transition to a replacement EHR. Read and critique the plan by answering the questions that follow it.

Project Organization

The organizational phase of the project will involve establishing a project steering committee and identifying the leadership members who will ensure the project's success. WCH operates eight separate clinics, each with their unique teams and EHR experience. By necessity, the steering committee will need representation from each of these clinics. The project steering committee will likely have twenty to twenty-�ive members. In addition to provider representatives, the steering committee will also include nurses, medical assistants, and of�ice managers from each clinic. IT representation is critical to the success of the project, and because the department provided poor IT support in the past, the CIO will play an active role on the steering committee. A representative from �inance should also participate on the committee, given the importance of billing and collections and other practice management issues.

The leadership of the steering committee will ensure that the committee addresses key steps in the process and does so in a timely fashion. Ideally, the committee should be chaired by a provider who is respected within the group, is objective, and is a supporter of EHR technology. Although the clinic organization does not have a provider who meets all of these criteria, a physician with strong peer support and credibility will be selected to cochair the steering committee. To

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complement the clinical leadership, the CIO will serve as a cochair for the committee, providing technical expertise. This individual has implemented other EHR systems and will bring a structured process to the committee to ensure a thorough evaluation process.

Committee Development

Organizations often overlook the importance of understanding the emotional climate of a medical practice when implementing an EHR. Therefore, although the �irst task of the steering committee will be to de�ine the project objectives, the existing concerns about an EHR transition require that a fair amount of time be devoted to addressing the emotional needs of the participants. Listening to practitioners and empathizing with their concerns will be critical to establish trust and overcome resistance during the EHR conversion.

To address this important issue, a series of discussion exercises will be used to encourage open dialogue and participant engagement. The �irst exercise will break the large group into teams of four to �ive members, and each team will discuss the lessons learned from the XYZ implementation that took place four years previously. Team leaders will be handpicked for their facilitation skills and ability to listen. The group discussions will address the “change readiness” and will surface the major issues associated with the implementation. It will also enable the group members to get to know each other in a less formal setting than the large group. The larger committee will reconvene to discuss their �indings and prepare a master list of implementation lessons learned.

Although this exercise may raise a number of issues related to implementation, it is also important to openly discuss the current issues with the existing EHR. Once again, small groups will be asked to discuss these issues to ensure participation by all members of the steering committee. Small groups will report out to the large group, and a summary of issues will be developed. This list, as well as the list of implementation issues, will set the stage for a later discussion regarding the scope of the project.

Project Scope and Objectives

Once the group has had the opportunity to express personal concerns and key issues have been identi�ied, the group can turn its attention to de�ining the project objectives. Anxious committee members are often tempted to begin discussing whether the steering committee should upgrade this system or consider alternatives. When this occurs, discussions and conclusions are usually based on the emotional attachment to or disappointment with the current system. A more systematic review process will help frame this discussion to ensure the conclusion is based on facts and the needs of the clinic organization.

The leadership must guide the committee in developing project objectives that are based on the needs of the organization, not individuals. Returning to the list of implementation and current issues, the group will be asked to prioritize the concerns that were raised. This prioritization will focus the committee on the most pressing issues that must be addressed. With this background work, the committee will be positioned to articulate the goals of the committee. It will also de�ine the scope of the project by determining what the project is and isn't intended to address. Invariably, users will raise issues that may not be solved by an EHR application. It is important that the end users review all issues, even though some of those issues may not prove to be within the scope of the project. Users with unrealistic expectations can end up frustrated and disengaged as the process unfolds. De�ining the scope and the objectives clari�ies expectations before options are considered.

Communication

The steering committee will need to establish plans to communicate with the larger audience of clinic users and stakeholders. A plan will be developed that provides this audience with regular updates. The plan must also address how the committee can solicit feedback from stakeholders during the evaluation and selection process. Regular minutes establish the record of the committee's work and provide a means for communicating with stakeholders. Special meetings with individual clinic groups will also be necessary to address rumors or provide more detailed information regarding the process. The steering committee must communicate regularly to ensure information is �lowing to individuals.

Plan of Work

Once project objectives are established, the committee will prepare a plan of work. This plan will outline the speci�ic action steps required to achieve the project objectives and the timeline for their completion. The plan of work focuses on

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the decision to upgrade the existing XYZ application and remain with a Meditech platform or move to a different software solution. The plan of work provides the steering committee with the road map to achieve its goals.

The key steps in the plan of work are identifying possible vendors, establishing system requirements, and completing a request-for-proposal (RFP) process. Vendor identi�ication can occur simultaneously with establishing the project goals. This is a reasonable assertion because it will save time and will engage the clinic representatives in the process. The steering committee will select individuals to attend trade shows to maximize exposure to EHR products. IT staff members will also participate in this review process to address technical requirements and issues.

Establishing system requirements is a critical step in the EHR decision-making process. The system requirements identify the needs of the organization and are the basis for the vendor evaluation process. The implementation and current issues lists developed by the committee will be used to develop the system requirements. Each clinic employee will receive a summary of these lists, and staff members will be asked to provide additional input to steering committee representatives. In addition, the IT department will conduct a thorough evaluation of new advancements in EHRs and regulatory requirements that may affect the EMR choice. The �irst draft of the system requirements will be preliminary. As the steering committee begins to interact with vendors and complete site visits, additional functionality may be added to the requirements. It would not be prudent to submit RFPs to all vendors who claim to have a functional EHR. The steering committee will need to determine the top �ive to seven vendors, judging by the initial survey of quali�ied vendors, trade shows, and market information.

Well-de�ined system requirements will need to be established and included in the RFPs. Packaging the system requirements in a format that provides structure for vendor responses and steering committee evaluations of vendor responses will be important, as will establishing a record of documentation throughout the acquisition process. The RFP document will provide the following:

Instructions for vendors

Organizational objectives

Organization background information

System goals and requirements

The vendors will be required to submit the following:

Vendor quali�ications

Proposed solutions

Criteria for evaluating proposals

Contractual requirements

Pricing and support

The vendor review process will also encompass technical calls, vendor fairs, reference checks, site visits, and vendor presentations. These elements of the review process are designed to ensure that suf�icient information is gathered to augment the proposals submitted by the vendors. It will not be feasible for all steering committee members to participate in these activities; therefore, individuals will be appointed to participate on their behalf.

Prior to reviewing the vendor proposals, the steering committee will develop vendor criteria that can be used to evaluate the proposals. Each member of the steering committee will be asked to score the proposals based on the criteria, and a summary score report will be developed. The WCH CEO will give the �inal approval to proceed with the conversion based on the report and recommendation from the steering committee. However, the �inal recommendation of the committee will not be based solely on the score report. Ideally, the �inal deliberations will involve a robust dialogue based on the mutual trust that has developed over time. Ultimately, the committee will balance its objective assessment of options with its intuition and considerable knowledge of the clinic organization.

Conclusion

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The WCH clinic organization will undergo a signi�icant EHR transition if they upgrade the XYZ system or purchase another product. The process that is outlined in this plan provides the organization the best opportunity to make the right decision for the organization and establish support with key stakeholders for an EHR conversion. A good IT decision- making process requires discipline and objectivity. The structural elements of the process involve leadership, committee structure, system requirements, and a thorough RFP and evaluation process.

Discussion Questions What are the strengths of this plan? What aspects do you think are particularly important?

How could the plan be improved? What, if anything, might you do differently if you were leading the effort? Explain your rationale.

What factors should the leadership team consider when deciding whether to stay with a single vendor for supporting the hospital and primary care settings?

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14.7 Case 7: Concerns and Workarounds with a Clinical Documentation System Garrison Children's Hospital is a 225-bed hospital. Its seventy-seven-bed neonatal intensive care unit (NICU) provides care to the most fragile patients, premature and critically ill neonates. The twenty-eight-bed pediatric intensive care unit (PICU) cares for critically ill children from birth to eighteen years of age. Patients in this unit include those with life- threatening conditions that are acquired (trauma, child abuse, burns, surgical complications, and so forth) or congenital (congenital heart defects, craniofacial malformations, genetic disorders, inborn errors of metabolism, and so forth).

Garrison is part of Premier Health Care, an academic medical center complex located in the Southeast. Premier Health Care also includes an adult hospital, a psychiatric hospital, and a full spectrum of adult and pediatric outpatient clinics. Within the past six months or so, Premier has implemented an electronic clinical documentation system in its adult hospital. More recently the same clinical documentation system has been implemented at Garrison in pediatric medical and surgery units and intensive care units. Electronic scheduling is to be implemented next.

The adult hospital drives the decisions for the pediatric hospital, a circumstance that led to the adult hospital's CPOE vendor being chosen as the documentation vendor for both hospitals. A CPOE system was implemented at Garrison Children's Hospital several years prior to implementation of the electronic clinical documentation system.

Information Systems Challenge A pressing challenge facing Garrison Children's Hospital is that nurses are very concerned and dissatis�ied with the new clinical documentation system. They have voiced concerns formally to several nurse managers, and one nurse went directly to the chief nursing of�icer (CNO) stating that the �low sheets on the new system are grossly inadequate and she fears using them could lead to patient safety issues. Lunchroom conversations among nurses tend to center on their having no clear understanding of why the organization is automating clinical documentation or what it hopes to achieve. Nurses in the NICU and PICU seem to be most vocal about their concerns. They claim there is inconsistency in what is being documented and a lack of standardization of content. The computer workstations are located outside the patients' rooms, so nurses generally document their notes on paper and then enter the data at the end of the shift or when they have time.

The system support team, consisting of nurses as well as technology specialists, began the work�low analysis, system installation, staff training, and go-live �irst with a small number of units in the adult hospital and the children's hospital beginning in January. The NICU and PICU did not implement the system until May and June of that year. System support personnel moved rapidly through each unit, working to train and manage questions. The timeline for each unit implementation was based on the number of beds in the unit and the number of staff members to be trained. No consideration was given to staff members' prior experience with computers and keyboarding skills or to complexity of documentation and existing work processes.

Although there are similarities between the adult and pediatric settings, there are also many differences in terms of unit design, computer resources (hardware), level of computer literacy, information documented, and work processes, not to mention patient populations. Little time was spent evaluating or planning for these differences and completing a thorough work�low analysis. After the initial units went live, less and less time was spent on training and addressing unit- speci�ic needs because of the demands placed on training staff members to stay on the timeline in preparation for the next system implementation involving electronic scheduling.

The clinical documentation system was implemented to the great consternation and dissatisfaction of the end users (physicians, nurses, social workers, and so forth) at Garrison, yet the Premier clinicians are happy with it. Many Garrison physicians and nurses initially refused to use the system, stating it was “unsafe,” “added to workload,” and was not intuitive. A decision to stop using the system and return to the paper documentation process was not then and is not now an option. Physician “champions” were encouraged to work with those who were recalcitrant, and nursing staff members were encouraged to “stick it out” with the hope that system use would “get easier.”

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As a result, with their concerns and complaints essentially forced underground, Garrison clinical staff members developed workarounds, morale was negatively affected, and the expectation that everyone would eventually “get it” and adapt has not become a reality. Instead, staff members are writing on a self-created paper system and then translating those notes to the computer system; physicians are unable to retrieve important, timely patient information; and the time team members spend trying to retrieve pertinent patient information has increased. There have been clear instances when patient safety has been affected because of the problems with the appropriate use of this system.

Discussion Questions What is the major problem in this case? What factors seem to have contributed to the current situation?

The nurses at Garrison argue that pediatric hospitals and intensive care units, in particular, are different from adult hospitals and that these differences should be clearly addressed in the implementation of a new clinical documentation system. Do you agree with this argument? Why or why not? Give examples from the literature to support your views.

How might the work�low issues and concerns mentioned in this case have been detected earlier?

Assume you are part of the leadership team at Garrison. How would you assess the current situation? What would you do �irst? Next? Explain the steps you would take and why you feel your approach is necessary.

What lessons can be learned from this case and applied to other settings?

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14.8 Case 8: Conversion to an EHR Messaging System Goodwill Health Care Clinic is the clinical arm of Jefferson Health Sciences Center in a large Southern city. The clinic was founded in the early 1950s as a place for faculty physicians to engage in clinical practice. Over the years the clinic has grown to nine hundred faculty physicians and two thousand employees, with over one million patient visits per year. Clinic services are spread across eleven primary care and specialty care units. Each unit operates somewhat independently but shares a common medical record numbering system that enables consolidation of all documentation across units. Paper charts were used until two years ago, when the clinic adopted an EHR system.

Goodwill Health Care Clinic uses a centralized call center to receive all patient calls. Patients call a central switchboard to schedule appointments, request medication re�ills, or speak to anyone in any of the eleven units. Call center staff members are responsible for tracking all calls to ensure that each is dealt with appropriately. Currently the call center uses a customized Lotus Notes system that can be accessed by anyone in the system who needs to process messages. Messages can be tracked and then closed when the appropriate action has been taken. Notes created from closed messages are printed and �iled in the appropriate patients' paper records. These notes cannot be accessed via the EHR.

Clinic staff members are very comfortable with the current Lotus Notes system, and it is used routinely by all units.

Information Systems Challenge Goodwill Health Care Clinic requires all medication lists and re�ill information to be kept up-to-date in the EHR. Therefore, the existence of the current Lotus Notes system means that the same information must be documented in two locations— �irst in the call center note and then in the EHR. This leads to duplication of effort and documentation errors. The potential for serious error is present. Physicians and other health care providers look in the EHR for the most up-to-date medication information.

Although the adoption of the EHR has been fairly successful, not all units use all of the available components of the EHR. A companion paper record is needed for miscellaneous notes, messages, and so forth. All units are recording of�ice visits into the EHR, but not all have activated the lab results or the prescription writing features. Several units have been experiencing physician resistance to adding more EHR functions.

The EHR system has a messaging component that works similar to a closed e-mail system. Messages can be sent, received, and stored by EHR-authenticated users. Pertinent patient care messages are automatically stored in the correct patient record. In addition, the EHR messaging system works seamlessly with the prescription writing module, which includes patient safety checks such as allergy checks and drug interactions.

The challenge for Goodwill Health Care Clinic is to implement the messaging feature and prescription writing component (where it is not currently being used) of their current EHR in the call center and the clinical units, replacing the existing Lotus Notes system and improving the quality of the documentation, not only of medication re�ills but also of all patient- related calls. The long-term goal is to add a patient portal feature where patients can schedule appointments, send messages to their providers, and re�ill prescriptions electronically.

Discussion Questions Outline the steps that you would take to ensure a successful conversion from the existing call center system to the new EHR-compatible system. Defend your response.

Who should be involved in the conversion planning and implementation? Discuss the roles of the people on your list and your reasons for selecting them.

What are some strategies that you would employ to minimize physicians' and other users' resistance to the conversion?

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Do you think that making sure all units are running the same EHR functions is a necessary precursor to the conversion to the messaging and prescription writing components? What information would be helpful in making this determination?

How might the implementation of the patient portal feature address some of the current issues? What work�low considerations will need to be made?

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14.9 Case 9: Strategies for Implementing CPOE Health Matters is a newly formed nonpro�it health system comprising two community hospitals (Cooper Memorial Hospital and Ashley Valley Hospital), nine ambulatory care clinics, and three imaging centers. Since its inception two years ago, the information services (IS) department has merged and consolidated all computer systems under one umbrella. Each of the facilities within the health system is connected electronically with the others through a �iber optic network. The organizational structure of the two hospitals is such that each has its own executive leadership team and board.

Seven years ago, the leadership team at Cooper Memorial Hospital made the strategic decision to choose Meditech as the vendor of choice for its clinical and �inancial applications. The philosophy of the leadership team was to solicit a single- vendor solution so that the hospital could minimize the number of disparate systems and interfaces. Since then, Meditech has been deployed throughout the health system and applications have been kept current with the latest releases. Most nursing and clinical ancillary documentation is electronic, as is the medication administration record. Health Matters does have several ancillary systems that interface with Meditech; these include a picture archiving and communication system (PACS), a fully automated laboratory system, an emergency department tracking board, and an electronic bed board system. The leadership team at Ashley Valley Hospital chose to select non-Meditech products, because at the time Meditech did not offer these applications or its products were considered inadequate by clinicians. However, the current sentiment among the leadership team is to continue to go with one predominant vendor, in this case, Meditech, for any upgrades, new functionality, or new products.

The IS group at Health Matters consists of a director of information systems (who reports to the chief �inancial of�icer) and �ifteen staff members. The IS staff members are highly skilled in networking and computer operations but have only moderate skills as program analysts and project managers. The CEO, Steve Forthright, plans to hire a CIO to provide senior-level leadership in developing and implementing a strategic IS plan that is congruent with the strategic goals of Health Matters.

Currently, the senior leadership team at Health Matters has identi�ied the following as the organization's top three IS challenges. The current director of IS has been somewhat involved in discussions related to the establishment of these priorities.

To implement successfully computerized provider order entry (CPOE)

To increase the variety and availability of computing devices (workstations or handheld devices) at each nursing station

To implement successfully medication administration using bar-coding technology

Information Systems Challenge The most pressing IS challenge is to move forward with the implementation of CPOE. The decision has already been made to implement the Meditech CPOE application. Several internal and external driving forces are at play. Internally, the physician leaders believe that CPOE will further reduce medication errors and promote patient safety. The board has established patient safety as a strategic goal for the organization. Externally groups such as Leapfrog and the Paci�ic Business Group on Health have strongly encouraged CPOE implementation. CEO Steve Forthright has concerns, however, because Health Matters does not yet have a CIO on board and he feels the CIO should play a pivotal role. Much of Steve's concern stems from his experience with CPOE implementation at another institution, with a different vendor and product. Steve had organized a project implementation committee, established an appropriate governance structure, and the senior leadership team thought it had “covered the bases.” However, according to Steve, “The surgeons embraced the new CPOE system, largely because they felt the postoperative order sets were easy to use, but the internists and hospitalists rebelled. The CPOE project stalled and the system was never fully implemented.” Steve is not the only person reeling from a failed implementation. The clinical information committee at Health Matters is chaired by Mary White, who was involved in a failed CPOE rollout at another hospital several years ago. She was a strong supporter of the system at the time, but she now speaks of the risks and challenges associated with getting physician buy-in and support throughout the health system.

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Members of the medical staff at Cooper Memorial Hospital have access to laboratory and radiology results electronically. They have access through workstations in the hospital; most physicians also access clinical results remotely through smartphones. An estimated 35 percent of the physicians take full advantage of the system's capabilities. Almost all active physicians use the PACS to view images, and most use a computer to look up lab values. Fewer than half of the physicians use electronic signatures to sign transcribed reports.

Discussion Questions Assume you are part of a team charged with leading the implementation of CPOE within Health Matters. How would you approach the task? What would you do �irst? Next? Who should be involved in the team? Lead the team?

The CIO hasn't been hired yet. Do you see that as a problem? Why or why not? What role, if any, might the CIO have in the CPOE implementation project?

To what extent does the fact that Health Matters is a relatively new health system simplify or complicate the CPOE implementation project? How do other health systems typically implement CPOE or other clinical information system projects of this magnitude?

How might you solicit the wisdom and expertise of others who may have undergone CPOE projects similar to this one? Or who have used Meditech's CPOE application? How might Steve Forthright's and Mary White's prior experiences with partially and fully failed implementations affect their views in this case?

Develop a high-level implementation plan of key tasks and activities that will need to be done. How will you estimate the time frame? The resources needed? What role does the vendor have in establishing this plan?

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14.10 Case 10: Implementing a Syndromic Surveillance System Syndromic surveillance systems collect and analyze pre-diagnostic and nonclinical disease indicators, drawing on preexisting electronic data that can be found in systems such as EHRs, school absenteeism records, and pharmacy systems. These surveillance systems are intended to identify speci�ic symptoms within a population that may indicate a public health event or emergency. For example, the data being collected by a surveillance system might reveal a sharp increase in diarrhea in a community and that could signal an outbreak of an infectious disease.

The infectious disease epidemiology section of a state's public health agency has been given the task of implementing the Early Aberration Reporting System of the Centers for Disease Control and Prevention. The agency views this system as signi�icantly improving its ability to monitor and respond to potentially problematic bioterrorism, food poisoning, and infectious disease outbreaks.

The implementation of the system is also seen as a vehicle for improving collaboration among the agency, health care providers, IT vendors, researchers, and the business community.

Information Systems Challenge The agency and its infectious disease epidemiology section face several major challenges.

First, the necessary data must be collected largely from hospitals and in particular emergency rooms. Developing and supporting necessary interfaces to the applications in a large number of hospitals is very challenging. These hospitals have different application vendors, diverse data standards, and uneven willingness to divert IT staff members and budget to the implementation of these interfaces.

To help address this challenge, the section will acquire a commercial package or build the needed software to ease the integration challenge. In addition, the section will provide each hospital with information it can use to assess its own mix of patients and their presenting problems. The agency is also contemplating the development of regulations that would require the hospitals to report the necessary data.

Second, the system must be designed so that patient privacy is protected and the system is secure.

Third, the implementation and support of the system will be funded initially through federal grants. The agency will need to develop strategies for ensuring the �inancial sustainability of the application and related analysis capabilities, should federal funding end.

Fourth, the agency needs to ensure that the section has the staff members and tools necessary to appropriately analyze the data. Distinguishing true problems from the noise of a normal increase in colds during the winter, for example, can be very dif�icult. The agency could damage the public's con�idence in the system if it overreacts or underreacts to the data it collects.

Discussion Questions If you were the head of the agency's epidemiology section, how would you address the four challenges described here?

Which of the challenges is the most important to address? Why?

If you were a hospital CEO being asked to redirect IT resources for this project, what would you want in return from the agency to ensure that this system provided value to your organization and clinicians?

A strong privacy advocacy group has expressed alarm about the potential problems that the system could create. How would you respond to those concerns?

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14.11 Case 11: Planning an EHR Implementation The Leonard Williams Medical Center (LWMC) is a 240-bed, community acute care hospital operating in a small urban area in upstate New York. The medical center offers tertiary services and has a captive professional corporation, Williams Medical Services (WMS). WMS is a multispecialty group employing approximately �ifty primary care and specialty physicians.

WMS has its own board, made up of representatives of the employed physicians. The WMS board nominations for members and of�icers are subject to the approval of the medical center board. The capital and operating budgets of WMS are reviewed and approved during the LWMC budget process. The WMS board is responsible for governing the day-to-day operations of the group. LWMC serves a population of approximately 215,000. There are �ive other hospitals in the region. One of these, aligned with a large clinic, is viewed as the primary competitor.

In its most recent �iscal year, LWMC had an operating margin of 0.4 percent. LWMC has $40 million in investments and has a long-term debt-to-equity ratio of 25 percent.

Information Systems Challenge LWMC has been very effective in its IT efforts. It was the �irst hospital in its region to have a clinical information system. Bedside computing has been available on the inpatient units since the 1990s. The CIO and IT department are highly regarded. LWMC has received several industry recognitions for its efforts.

The LWMC information systems steering committee recently approved the acquisition and implementation of a CPOE system. This decision followed a thorough analysis of organizational strategies, the efforts of other hospitals, and the vendor offerings. LWMC is poised to begin this major initiative.

During a recent steering committee meeting, it was learned that the WMS physicians were anxious to acquire an EHR system. Two years ago a rival physician group had purchased an EHR system. WMS, concerned about a competitive threat, obtained approval of $300,000 to acquire its own EHR. The rival group has since encountered serious dif�iculties with implementation and has de-installed the system. This troubled path caused WMS to slow down its efforts.

Now WMS has decided to return to its plans to implement a certi�ied EHR. The physicians have begun to look at vendor offerings but have not involved the LWMC CIO and IT staff members. The physicians have ignored the CIO's technical and integration advice and requirements during their EHR search.

The CEO is concerned about the EHR process and its disconnect from the medical center's IT plans.

Discussion Questions What is your assessment of this situation? What are the physician group's possible reasons for deciding to proceed on an independent path?

If you were the CEO, what steps would you take to bring the hospital and physician group IT plans back into alignment? Should the EHR effort proceed or wait until the CPOE initiative is complete? Should you require that both systems come from the same vendor? Explain your rationale.

The LWMC board is concerned that the physicians are being naive about the challenges of EHR implementation, have established no measurable goals for the system, and have only weak incentives to make the implementation successful. How would you address these concerns?

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14.12 Case 12: Replacing a Practice Management System University Physician Group (UPG) is a multispecialty group practice plan associated with the College of Osteopathic Medicine (COM). UPG employs 90 physicians and 340 clinical and business support personnel.

UPG has recently been pro�itable (with revenue from operations this �iscal year of $32 million and a retained pro�it of $500,000 from operations). However, prior year losses make UPG a break-even organization.

Management and the physicians are focusing on strengthening the �iscal position of the organization. This focus has led to plans to restructure physician compensation, establish a self-insurance trust for professional liability, and improve the �inancial budgeting and reporting processes.

UPG has entered into a preliminary agreement to merge with Northern Af�iliated Medical Group (NAMG). NAMG is a 150- physician multispecialty group located in the same city as UPG. NAMG holds a contract with the local county hospital to provide indigent care and serve as the faculty for the graduate medical education programs in family medicine.

Both organizations believe that the merged organization would be able to reduce expenses through the elimination of redundant functions and, because of greater geographical coverage and size, would improve their ability to obtain more favorable payer contracts.

Information Systems Challenge For many years UPG has obtained practice management systems from Gleason Solutions (GS). The applications are hosted in a GS data center, reducing UPG's need for IT staff members.

Prior to the merger, UPG was in the process of examining replacements for GS. UPG had become displeased because of the GS application failure to incorporate new technologies and application features, limited ability to generate reports, and in�lexible integration approaches to other applications.

Despite its displeasure, UPG now appears to be on the path to renewing the GS contract. GS executives have effectively lobbied several important physicians and administrators, and UPG's limited cash position makes the GS low-cost �inancial proposal attractive.

NAMG uses the GS applications and has also been examining replacing the system. NAMG has a strong IT department and will be providing IT support to the newly merged organization. After examining the market, NAMG has identi�ied four potential vendors, including GS.

Discussion Questions Would you suspend both organizations' pursuit of a new system until an IT strategic plan for the merged organization has been developed? Why?

What steps would you take to integrate the system selection processes of the two organizations?

Implementing a practice management system is always challenging. What additional implementation risks are introduced by the merger?

Both organizations expect the result of the merger to be lower costs, improved patient service, and increased market power. What steps would you take to make sure that the new practice management system furthers these objectives?

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14.13 Case 13: Implementing Tele-Psychiatry in a Community Hospital Emergency Department Westend Hospital is a midsize, not-for-pro�it, community hospital in the Southeast. Each year, the hospital provides care to more than twelve thousand inpatients and sixty thousand emergency department (ED) patients. Over the past decade, the hospital has seen increasing numbers of patients with mental illness in the ED, largely because of the implementation of the state's mental health reform act, which shifted care for patients with mental illness from state psychiatric hospitals to community hospitals and outpatient facilities. Westend ED has in essence become a safety net for many individuals living in the community who need mental health services.

Largely considered a farming community, Westend County has a population of 120,000. Westend Hospital is the third largest employer in the county. However, Westend is not the only hospital in the county. The state still operates one of three psychiatric facilities in the county. Within a �ive-mile radius of Westend Hospital is a 270-bed inpatient psychiatric hospital, Morton Hospital. Morton Hospital serves the citizens of thirty-eight counties in the eastern part of the state.

Westend Hospital is �iscally strong with a stable management team. Anika Lewis has served as president-CEO for the past �ifteen years. The remainder of the senior management team has been employed with Westend for eight to thirteen years. There are more than 150 active or af�iliate members of the organized hospital medical staff and approximately 1,600 employees. The hospital has partnered with six outside management companies for services when the expertise is not easily found locally, including HighTech for assistance with IT services.

In terms of its information systems, Westend Hospital has used Meditech since the 1990s, including for nursing documentation, order entry, and diagnostic results. The nursing staff members use bar-coding technology for medication administration and have done so for years. CPOE was implemented in the ED four years ago and hospital-wide two years ago along with a certi�ied EHR system.

The Challenge Westend Hospital has seen increasing numbers of mental health patients in the ED over the past decade. For the past three years, the ED has averaged one hundred mental health patients per month. Depending on the level of patient acuity and availability of state- or community-operated behavioral health beds, the patient may be held in the ED from two hours to eight days before a safe disposition plan can be implemented.

The ED mental health caseload is also rapidly growing in acuity. Between 20 percent and 25 percent of the behavioral health patients are arriving under court order (involuntary commitment). The involuntary commitment patients are the most dif�icult in terms of developing a safe plan for disposition from the ED. The Westend Hospital's inpatient behavioral health unit is currently an adult, voluntary admission unit and does not admit involuntary commitment patients. The length of stay for involuntary commitment patients in the ED can be quite long. In some cases, it may take three to four days to stabilize the patient on medication (while in the ED) before the patient meets criteria for discharge to outpatient care. Approximately 40 percent of the mental health patients in the ED, both involuntary commitment and voluntary, are discharged either to home or outpatient treatment.

The psychiatrists and the emergency medicine physicians have met multiple times during the past six years to develop plans to improve the care of the mental health patients in the ED. De�ining the criteria for an appropriate Westend psychiatrist consultation remains a challenge. The daily care needs of the mental health patients boarding in the ED are complex. The physicians have not been able to reach an agreement on this topic. Senior leaders have suggested that tele- psychiatry may be a partial solution to address this challenge.

Tele-psychiatry as a Strategy Westend Hospital has chosen to consider contracting with a tele-psychiatry hospital network to provide tele-psychiatry services in the ED. The network has demonstrated good patient outcomes and is considered �inancially feasible at a rate of $4,500 per month. This fee includes the equipment, management fees, and physician fees. The director of tele-psychiatry

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in the hospital network has verbally committed to work very closely with the Westend Hospital team to ensure a smooth implementation.

Technology to support tele-psychiatry uses two-way, real-time, interactive audio and video through a secure encrypted wireless network. The patient and the psychiatric provider interact in the same manner as if the provider were physically present. The provider performing the patient consultation uses a desktop video conferencing system in the psychiatric of�ice.

Tele-psychiatry as a solution to the mental health crisis in the ED was not immediately embraced by the medical staff members. They did agree to the implementation of tele-radiology four years previously. However, the most recent revision of the medical staff bylaws to support telemedicine explicitly states that the medical executive committee must approve, by a two-thirds vote, any additional telemedicine programs that may be introduced at the hospital. The medical staff leaders wanted to preserve their ability to maintain a �inancially viable medical practice in the community as well as protect the quality of care.

The idea of tele-psychiatry was introduced to portions of the medical staff. The psychiatrists realized that tele-psychiatry could relieve them of the burden of daily rounds in the ED for boarding patients. They were also concerned about their workload when tele-psychiatry was not available.

The emergency medicine physicians immediately verbalized their disapproval on several levels. First, they were concerned about the reliability of the technology based on their experiences over the past several years with video remote interpreting. Then, the emergency medicine physicians were skeptical about the continued support from the psychiatrists when an in-person consultation might be clinically necessary.

Physicians outside of the ED and psychiatry could not understand why the current psychiatrists could not meet the needs of the ED. The barriers to adoption of tele-psychiatry crossed three arenas: �inancial, behavioral, and technical. Subsequently, many conversations were conducted. Eventually, the medical executive committee approved tele-psychiatry as a new patient care service on June 25 of this year.

Implementation Plan The CEO appointed the vice president of patient services as the executive sponsor. The implementation team includes the IT hardware and networking specialist, IT interface specialists, nursing informatics analyst, ED nurse director, behavioral health nurse director, assistant vice president patient services, physician clinical systems analyst, and the medical staff services coordinator. These individuals represent the major activities for implementation: provider credentialing, physician documentation, equipment and technical support, and patient care activities. Because of competing projects and psychiatry subject matter expertise, the executive sponsor will also serve as the project manager.

The mental health crisis affecting the ED is the focal driver for change. Patient safety is at risk. Barriers to implement tele- psychiatry have been well documented. The strategies to overcome the barriers include de�ining the new role for the Westend psychiatrists, developing a process for ease of access and reliability of equipment for the ED physicians, and development of a plan when the tele-psychiatry program is not available.

An unexpected barrier has been recently identi�ied. On initiation of the tele-psychiatry provider credentialing process, the medical staff services coordinator discovered that the bylaws do not have a provision for credentialing of physician extenders in the telemedicine category. The tele-psychiatry providers include six board-certi�ied psychiatrists and twelve mental health–trained nurse practitioners. The medical executive committee has agreed to ask the medical staff bylaws committee to convene and revise the bylaws accordingly. The original go-live date of September has been changed to December.

The executive sponsor along with the implementation team will be responsible for managing the organizational changes necessary to support the introduction of technology and new patient care �low processes. Managing organizational change will be essential to the success of this project. Some items in the project will be viewed as incremental change and other items will be viewed as step-shift change. Communication strategies will be developed to support the change.

Discussion Questions

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What are the bene�its associated with using tele-psychiatry services in the ED? To the patient? To the hospital? To the medical staff members? What are the potential barriers or challenges?

Based on the information provided in this case, how equipped is Westend Hospital to implement tele- psychiatry services? What resources do they have in place? What other resources might they consider?

How might the Westend Hospital evaluate or measure the success of its tele-psychiatry services? What metrics might they use?

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14.14 Case 14: Assessing the Value and Impact of CPOE The University Health Care System is an academic medical center with more than 1,200 licensed beds and more than 9,000 employees. The system comprises the University Hospital, Winston Geriatric Hospital, Jefferson Rehabilitation Hospital, and two outpatient centers in the metropolitan area. The system has a history of being a patriarchal, physician- driven organization. When University Health Care �irst started taking patients, it was viewed as a mecca to which community physicians throughout the South referred dif�icult-to-treat patients. That referral mentality persisted for decades, so physicians within the system had a dif�icult time making the transition to an organization that had to compete for patients with other health care entities in the region.

In recent years, University Health Care System has evolved and has given physicians proportionately more clout in decision making, in part because the health care leadership team has not stepped forward. Creating a balance between clinician providers and administrative leadership is a real issue. In the midst of the dif�iculty, both groups have agreed to embark on the EHR journey. Currently about 55 percent of the system's patient record is electronic; the remainder is on paper. The physicians as a whole, however, have embraced technology and view the EHR as the right road to take in achieving the organization's goal of providing high-quality, safe, cost-effective patient care.

Information Systems Challenge Currently, the University Health Care System is in the midst of rolling out the CPOE portion of the EHR project. A multidisciplinary decision-making project was established before beginning the initiative, and leaders and clinicians tried to educate themselves on what the CPOE project would entail. They were familiar with cases such as one at Cedars-Sinai in which CPOE was halted after physician uproar over the time it took to use it and patient safety concerns. To help ensure this did not happen at the University Health Care System, the leadership team decided to take a slower, phased-in approach. Team members visited similar organizations that had implemented CPOE, attended vendor user-group conferences, consulted with colleagues from across the nation, and articulated the following project goals:

Optimize patient safety.

Improve quality outcomes and reduce variation in practice through the use of evidence-based practice guidelines.

Reduce risk for errors.

Accommodate regulatory standards expectations.

Enhance patient satisfaction.

Standardize processes.

Improve ef�iciency.

The board has made it very clear that it wants regular updates on the progress of the project and expects to see what the return on the investment has been.

Discussion Questions How might you evaluate the CPOE implementation process at University Health Care System? Give examples of different methods or strategies you might employ.

How would you respond to the board's desire for a “return on investment” from this initiative? Is it a reasonable request? Why or why not?

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Assume you are to lead the evaluation component of this project. You have reviewed the goals for the project. What process would you use to develop a plan for assessing the value of CPOE? Who would be involved? What roles would they play? How would you decide on the best metrics to use? What baseline data would you want to collect or review?

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14.15 Case 15: Assessing the Value of Health IT Investment Five years ago, senior leadership at the Southeast Medical Center made the decision to embark on the implementation of a host of new clinical applications in the inpatient units enterprise-wide. The four hospitals that comprise Southeast Medical Center include the Main Adult Hospital, the Children's Hospital, McKinsey Hospital, and the Institute of Psychiatry. They contracted with McKesson to implement the following applications:

ED tracking system

Replacement pharmacy information system

Clinical documentation system (for all nurses and ancillary personnel; does not include physician notes)

Medication administration using bar-coding technology

Computerized provider order entry (CPOE)

In addition, several administrative applications were implemented, including a new operative scheduling system and materials management system. They also upgraded their clinical data repository viewer (referred to as Oacis). All applications are now operational.

Most recently, the board of trustees has approved replacement of Southeast's ambulatory care EHR. A system known as EasyDoc (a McKesson product) has been in use for years. However, the system was viewed by clinicians and IT staff members as antiquated and cumbersome to navigate. It is also very dif�icult to retrieve aggregate data from the system. Much of this is apparently because of its underlying database architecture and structure. EasyDoc also did not interface with the hospital clinical applications, and leaders were concerned that the system was not going to enable Southeast to achieve meaningful use criteria.

Clinicians have also been frustrated that Southeast has been using two different EHR systems, one for inpatient and another for outpatient, and the two don't interface or give a complete picture of the patient's health record. With payment reform and the need to be able to more effectively manage patient care quality and outcomes, senior leaders recommended, and the board approved, replacement of the EasyDoc EHR with Epic ambulatory care EHR. The patient registration and billing system used in ambulatory care will also be replaced with Epic's practice management application. Long-term plans are to eventually replace the McKesson clinical applications with Epic in the inpatient sector as well.

The total cost of ownership for the replacement ambulatory EHR and practice management system is approximately $30 million. Included in this estimate are not only the software and hardware upgrades but also the staff members needed to implement and support the new applications. Replacing the McKesson clinical products with Epic inpatient EHR will cost an additional $90 million. Again, this is an estimated total cost of ownership.

The primary purpose of the Epic EHR project is to provide clinicians with access to a single, complete EHR that spans the patient's continuum of care and improves collaboration and coordination of care. Community providers and patients will have access to the system. Community partners (such as primary care providers) will be able to retrieve important patient information. Currently a local HIE exists that provides ED visit information to all local hospitals. This is to be expanded to include continuity of care documents (CCDs) and other relevant health information. Patients will be given access to their health information such as lab tests, X-ray results, and medications. They will also be able to schedule appointments and pay their bills online through a patient portal known as MyChart. Southeast physician leaders view patients as partners in their own care and are pleased to provide them access to information electronically.

Southeast providers treat a large population of patients with multiple chronic conditions. Managing chronic diseases using evidence-based, real-time support is considered essential. In addition, Southeast Medical Center has available a secure data warehouse of patient data that researchers and clinicians will be using more fully in the future to ensure that clinical research drives best care.

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Discussion Questions Assume you've been tasked with developing a plan to assess the value of Southeast's investment in the Epic outpatient and inpatient systems and expansion of its use of the data warehouse. The board is interested in knowing how these new and replacement systems have affected or will affect Southeast's ability to offer coordinated, collaborative care in a cost- effective manner. The facility fully intends to meet Meaningful Use criteria and report on quality outcomes. They realize that the traditional fee-for-service system in which providers are paid on volume will be a thing of the past.

How would you determine which metrics to use? Who would be involved in the process?

How would you know that a change is attributable to the EHR or data warehouse system and not something else?

Do you think traditional return-on-investment methods are useful in this case? Why or why not?

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14.16 Case 16: The Admitting System Crashes Jones Regional Medical Center is a large academic health center. With nine hundred beds, Jones had forty-seven thousand admissions last year. Jones frequently has occupancy in excess of 100 percent, requiring diversion of ambulances. In addition, Jones had 1,300,000 ambulatory and emergency room visits in the past three years.

Jones is internationally renowned for its research and teaching programs. The IT staff members at Jones are highly regarded. They support more than three hundred applications and twelve thousand workstations.

The admitting system at Jones is provided by the vendor Technology Med (TechMed). The TechMed system supports the master patient index; registration; inpatient charge and payment entry; medical records abstracting and coding; hospital billing and patient accounting; reporting; and admission, discharge, and transfer capabilities.

The TechMed system was implemented twelve years ago and uses now-obsolete technology, including a rudimentary database management system. The organization is concerned about the fragility of the application and has begun plans to replace the TechMed system two years from now.

Information Systems Challenge On December 20, the link between the main data center (where the TechMed servers were housed) and the disaster recovery center was taken down to conduct performance testing.

On December 21, power was lost to the disaster recovery center, but emergency power was instantly put in place. However, as a precaution, a backup of the TechMed database was performed.

During the afternoon of December 21, the TechMed system became sluggish and then unresponsive. Database corruption was discovered. The backup performed earlier in the day was also corrupt. The link to the disaster recovery data center had not been restored following the performance testing.

Because there was no viable backup copy of the database, the Jones IT and hospital staff members began the arduous process of a full database recovery from journaled transactions. This process was completed the evening of December 22.

The loss of the TechMed system for more than thirty-six hours and the failure during that time of registration transactions to update patient care and ancillary department systems resulted in a wide variety of operational problems. The patient census had to be maintained manually. Reports of results were delayed. Paper orders were needed for patients who were admitted on December 21 and 22. Charge collection lagged.

Once the TechMed system was restored, additional hospital staff members were brought in to enter, into multiple systems, the data that had been manually captured during the outage. By December 25, normal hospital operations were restored. No patient care incidents are believed to have resulted.

Discussion Questions If you were the CIO of Jones Regional Medical Center during this system failure, what steps would you take during the outage? What steps would you take after the outage to reduce the likelihood of a reoccurrence of this problem?

The root cause analysis of the outage showed that process, technology, and staf�ing factors all contributed to the problem. What are some of the likely factors? Which of these factors do you believe are likely to have been the most important?

If you were a member of the audit committee of the Jones board of trustees, what questions would you ask the CIO?

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What issues and problems should a disaster recovery plan prepare for? How does an organization determine how much to spend to reduce the occurrence and severity of such episodes?

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14.17 Case 17: Breaching the Security of an Internet Patient Portal Kaiser Permanente is an integrated health delivery system that serves more than eight million members in nine states and the District of Columbia. In the late 1990s, Kaiser Permanente introduced an Internet patient portal, Kaiser Permanente Online (also known as KP Online). Members can use KP Online to request appointments, request prescription re�ills, obtain health care service information, seek clinical advice, and participate in patient forums.

Information Systems Challenge In August, there was a serious breach in the security of the KP Online pharmacy re�ill application. Programmers wrote a �lawed script that actually concatenated over eight hundred individual e-mail messages containing individually identi�iable patient information, instead of separating them as intended. As a result, nineteen members received e-mail messages with private information about multiple other members. Kaiser became aware of the problem when two members noti�ied the organization that they had received the concatenated e-mail messages. Kaiser leadership considered this incident a signi�icant breach of con�identiality and security. The organization immediately took steps to investigate and to offer apologies to those affected.

On the same day the �irst member noti�ied Kaiser about receiving the problem e-mail, a crisis team was formed. The crisis team began a root cause analysis and a mitigation assessment process. Three days later Kaiser began notifying its members and issued a press release.

The investigation of the cause of the breach uncovered issues at the technical, individual, group, and organizational levels. At the technical level, Kaiser was using new web-based tools, applications, and processes. The pharmacy module had been evaluated in a test environment that was not equivalent to the production environment. At the individual level, two programmers, one from the e-mail group and one from the development group, working together for the �irst time in a new environment and working under intense pressure to quickly �ix a serious problem, failed to adequately test code they produced as a patch for the pharmacy application. Three groups within Kaiser had responsibilities for KP Online: operations, e-mail, and development. Traditionally these groups worked independently and had distinct missions and organizational cultures. The breach revealed the differences in the way groups approached priorities. For example, the development group often let meeting deadlines dictate priorities. At the organizational level, Kaiser IT had a very complex organizational structure, leading to what Collmann and Cooper (2007, p. 239) call “compartmentalized sensemaking.” Each IT group “developed highly localized de�initions of a situation, which created the possibility for failure when integrated in a common infrastructure.”

Discussion Questions How serious was this e-mail security breach? Why did the Kaiser Permanente leadership react so quickly to mitigate the possible damage done by the breach?

Assume that you were appointed as the administrative member of the crisis team created the day the breach was uncovered. After the initial apologies, what recommendations would you make for investigating the root cause(s) of the breach? Outline your suggested investigative steps.

How likely do you think future security breaches would be if Kaiser Permanente did not take steps to resolve underlying group and organizational issues? Why?

What role should the administrative leadership of Kaiser Permanente take in ensuring that KP Online is secure? Apart from security and HIPAA training for all personnel, what steps can be taken at the organizational level to improve the security of KP Online?

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14.18 Case 18: The Decision to Develop an IT Strategic Plan Meadow Hills Hospital is a 211-bed acute care hospital with four hundred members on its medical staff. Meadow serves a population of three hundred thousand. There are three other similarly sized hospitals in the region. As an organization, Meadow Hills is very well run. It has a good reputation in the community and is considered to be technically advanced based on its investments in imaging technology. The organization is also in a strong �inancial position, with $238 million in reserves. Meadow Hills has never had an IT strategic plan.

Information Systems Challenge The IT function reports to the Meadow Hills chief �inancial of�icer (CFO). The CEO and other members of the senior leadership team have largely left IT decisions up to the CFO. As a result, the organization's �inancial systems are very well developed. Computerized provider order entry (CPOE), an EHR system, and a PACS have not been implemented. IT support for departments such as nursing, pharmacy, laboratory, imaging, and risk management is limited.

The Meadow Hills IT team is well regarded and the limited IT support for clinical processes has not drawn complaints from the nursing or medical staff. The organization does not currently have a CIO.

The CEO has never felt the need to pay attention to IT. However, he is worried that reimbursement based on care quality will arrive at Meadow Hills soon. He also believes that the Meadow Hills Clinical Laboratory and Imaging Center would be more competitive if it had stronger IT support; rival labs and imaging centers are able to offer electronic access to test results. And he suspects that the lack of IT support may eventually lead to nurses and physicians choosing to practice elsewhere.

Discussion Questions What steps should the CEO take to develop an IT strategy for the organization?

Are there unique risks to the ability of Meadow Hills Hospital to develop and implement an IT strategy?

Meadow Hills appears to have been successful despite years without an IT strategy. Why is this?

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14.19 Case 19: Selection of a Patient Safety Strategy Langley Mason Health (LMH) is located in North Reno County, the largest public health care district in the state of Nevada, serving an 850-square-mile area encompassing seven distinctly different communities. The health district was founded in 1937 by a registered nurse and dietician who opened a small medical facility on a former poultry farm. Today the health system comprises Langley Medical Center, a 317-bed tertiary medical center and level II trauma center; Mason Hospital, a 107-bed community hospital; and Mason Continuing Care Center and Villa Langley, two part-skilled nursing facilities (SNFs); a home care division; an ambulatory surgery center; and an outpatient behavioral medicine center.

In anticipation of expected population growth in North Reno County and to meet the state-mandated seismic requirements, LMH developed an aggressive facilities master plan (FMP) that includes plans to build a state-of-the-art 453-bed replacement hospital for its Langley Medical Center campus, double the size of its Mason Hospital, and build satellite clinics in four of its outlying communities. The cost associated with actualizing this FMP is estimated to be $1 billion. Several years ago, LMH undertook and successfully passed the largest health care bond measure in the state's history and in so doing secured $496 million in general obligation bonds to help fund its massive facilities expansion project. The remaining funds must come from revenue bonds, growth strategies, philanthropic efforts, and strong operational performance over the next ten years. Additionally, $5 million of routine capital funds will be diverted every �iscal year for the next �ive years to help offset the huge capital outlay that will be necessary to equip the new facilities. That leaves LMH with only $10 million per year to spend on routine maintenance, equipment, and technology for all its facilities. LMH is committed to patient safety and is building what the leadership team hopes will be one of the safest hospital-of-the-future facilities. The challenge is to provide for patient safety and safe medication practices given the minimal capital dollars available to spend today.

LMH developed an IT strategic plan and identi�ied the following ten goals:

Empower health consumers and physicians.

Transform data into information.

Support the expansion of clinical services.

Expand e-business opportunities.

Realize the bene�its of innovation.

Maximize the value of IT.

Improve project outcomes.

Prepare for the unexpected.

Deploy a robust and agile technical architecture.

Digitally enable new facilities, including the new hospital.

Information Systems Challenge LMH has implemented Phase 1—an enterprise-wide EHR system developed by Cerner Corporation at a cost of $20 million. Phase 2 of the project is to implement CPOE with decision-support capabilities. This phase was to have been completed previously, but has been delayed because of the many challenges associated with Phase 1, which still must be stabilized and optimized. LMH does have a fully automated pharmacy information system, albeit older technology, and Pyxis medication-dispensing systems on all units in the acute care hospitals. Computerized discharge prescriptions and instructions are available only for patients seen and discharged from the LMH emergency departments.

Currently, the pharmacy and nursing staff members at LMH have been working closely on the selection of a smart IV pump to replace all of the health system's aging pumps and have put forth a proposal to spend $4.9 million in the next

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�iscal year. Smart pumps have been shown to signi�icantly reduce medication administration errors, thus reducing patient harm. This expenditure would consume roughly half of all of the available capital dollars for that �iscal year.

The CIO, Marilyn Chen, understands the pharmacists' and nurses' desire to purchase smart IV pumps but believes the implementation of this technology should not be considered in isolation. She sees the smart pumps as one facet of an overall medication management capital purchase and patient safety strategic plan. Marilyn Chen suggests that the pharmacy and nursing leadership team lead a medication management strategic planning process and evaluate a suite of available technologies that taken together could optimize medication safety (for example, CPOE, electronic medication administration records [e-mar], robots, automated pharmacy systems, bar coding, computerized discharge prescriptions and instructions, and smart IV pumps), the costs associated with implementing these technologies, and the organization's readiness to embrace these technologies. Paul Robinson, the director of pharmacy, appreciates Marilyn Chen's suggestion but feels that smart IV pumps are critical to patient safety and that LMH doesn't have time to go through a long, drawn-out planning process that could take years to implement and the process of gaining board support. Others argue that all new proposals should be placed on hold until CPOE is up and running. They argue there are too many other pressing issues at hand to invest in yet another new technology.

Discussion Questions Describe the current situation as you see it. What are the major issues in this case?

Marilyn Chen, CIO, and Paul Robinson, director of pharmacy, have different views of how LMH should proceed. What are the pros and cons of their respective approaches? Which approach, if either, seems like an appropriate course of action to you? Explain your rationale.

Assume you are to mediate a discussion on this issue and that participants are to come to consensus on how best to proceed. What would you do?

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14.20 Case 20: Strategic IS Planning for the Hospital ED Founded in 1900, Newcastle Hospital today is a 375-bed, not-for-pro�it community hospital that serves more than two hundred thousand residents of Newcastle County, New York. The hospital is approximately thirty miles from midtown Manhattan. It provides a full range of primary and secondary medical and surgical services and is an af�iliate of one of the large New York City hospital systems for tertiary referrals and select residency programs. Newcastle Hospital has an independent governing body with 25 trustees, 604 active physicians, and 1,121 full-time equivalent (FTE) staff members. Revenues of approximately $130 million per year come from 15,600 inpatient admissions, 71,000 outpatient visits, and 65,000 home care visits. Newcastle Hospital operates in a dif�icult environment characterized by relatively poor reimbursement and severe competition. There is one other acute care hospital in the county and a total of thirty-�ive others within a twenty-mile radius.

The sentinel event in the hospital's recent history occurred four years ago—a six-month nursing strike that alienated the workforce, decimated public con�idence, and directly cost at least $19.5 million, effectively eradicating the hospital's capital reserves. Most of the senior management was replaced after the strike. When hired, the new CEO and CFO uncovered extensive inaccuracies that resulted in a reduction of reported net assets by almost $30 million and the near- bankruptcy of the hospital. The new management restated �inancial statements, began resolving extensive litigation, and set out to reestablish immediate operations, future �inances, and a long-term strategy. The new CEO states that “years of board and management neglect, plus the ravages of the strike complicated recovery, because standards, systems, and middle managers were universally absent or ineffective.”

Among its many issues, the challenges within the hospital's emergency department (ED) are particularly important to the overall recovery effort. The ED is described by the hospital CEO as the organization's “�inancial, clinical, and public relations backbone.” The ED sees 34,000 patients per year and admits 24 percent of them, constituting 51 percent of all inpatient admissions. In addition, the ED is a clinically distinguished Level II trauma center, with a long legacy of outcomes that compare favorably against regional, state, and national benchmarks. Finally, most community members have experience with the ED and consider it a proxy for the hospital as a whole, whether or not they have experienced an inpatient stay.

Currently, Newcastle ED patient satisfaction compared to patient satisfaction among peer organizations ranks at the 14th percentile in the Press Ganey New York State survey and the 5th percentile in national surveys. Since the start of the new millennium, three organized initiatives to improve these results (especially regarding walkouts and waiting times) have failed, even though two involved prestigious consultants. After the management change, the new CEO diagnosed two core barriers to overcoming the ED problems: �irst, in�lexibility and unwillingness to change among the ED physician management group that had been in place for ten years, and, second, an almost complete absence of the data required to de�ine, measure, and improve the ED's service performance. The �irst barrier was addressed via an RFP process that resulted in engaging a new physician management group two years ago.

Information Systems Challenge The present IS challenge follows directly from Newcastle Hospital's overarching strategic objectives: “satisfying patients and staff,” “supporting ourselves,” and “getting better every day” (that is, improving performance). The ED as presently structured has ill-de�ined manual processes and no information system. The challenge is selecting an ED information system with an emphasis on informing, not just automating, key ED processes in order to support the overall strategic initiatives of the organization.

Several organizational and IT system factors that affect this IT challenge have been identi�ied by the hospital CEO.

Organizational Factors Unde�ined strategy. Newcastle Hospital operated without a formal strategic action plan and corresponding tactics until two years ago. As a result, systematic prioritization and measurement of institutional imperatives such as improving the ED did not occur.

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Data integrity. Data throughout the hospital were unde�ined and unreliable. For example, two irreconcilable daily census reports made timely bed placement from the ED impossible.

Culture. “Looking good,” that is, escaping accountability, was valued more highly than “doing good,” that is, substantively improving performance. Serious problems in the ED were often masked or dismissed as anecdotes, even in the face of regulatory citations and six- to eight-hour waiting times. The previous ED contract had contained no quality standards, and the ED physicians claimed to be busy “saving lives” whenever their poor service performance was questioned.

IT System Factors IT strategy. Paralleling the hospital, the IS department had no de�ined strategies, objectives, or processes. Alignment with hospital strategy and IT performance measurements were not considered. Although some progress has been made, this remains an area needing attention.

IT governance. There is no IT steering committee at either the board or management level. IT policies, service-level agreements, decision criteria, and user roles and responsibilities do not exist.

Functionality. The IT applications portfolio is missing critical elements (for example, order entry, case management, nursing documentation, radiology) that would greatly bene�it the ED, even without a dedicated ED system. The hospital's core information system is three versions out-of-date and certain functions have been bypassed by users altogether.

IT infrastructure and architecture. The data center and most IT staff members are located twelve miles away from the hospital, isolating IT physically and culturally from users and patients. Software and networks have been arbitrarily and extensively customized over the years, without documentation, and inadequate hardware capacity has often been given as an excuse for not pursuing an ED system.

IT organization and resources. IT spending has been, on average, less than 1 percent of the hospital's budget and IT staff members have lacked essential training in critical applications and tools. Newcastle Hospital has been dependent on multiple IT vendors for a variety of implementation and operations support activities.

Discussion Questions Outline the steps you would take to initiate a strategic planning process for improving the ED information system. How will you ensure that this plan is in alignment with the hospital's and department's overall strategic plans?

Multiple factors have contributed to the current state of the ED at Newcastle Hospital and are listed in the case. Which of these do you think will be the most dif�icult to overcome? Why?

The new CEO has good insight into the ED issues. Assuming that his assessment of the situation is accurate, discuss how his continued support could affect the outcome of any ED IS strategic plan.

Assume the CEO has appointed you to spearhead the ED IS strategic planning effort. What are the �irst steps you will take? Outline a general plan of action for the next three months. Indicate, by title, whom you would involve in the process. Explain your choices.

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14.21 Case 21: Board Support for a Capital Project Lakeland Medical Center is a 210-bed public hospital located in the Southeast. It is governed by a politically appointed nine-member board and serves a market of approximately one hundred thousand people. The hospital has been �inancially successful, but in recent years several capital investments have not brought high returns. As a result, project investment decisions became more conservative and oriented toward �inancial returns. Competitive forces have continued to grow in the market, and signi�icant internal expense items (such as the organization's pension program, paid leave bank, and health insurance program) have put strains on Lakeland's �inancial resources.

Revenue continues to grow at an average rate of about 10 percent each year, but controlling expenses remains a challenge. Bad debt has grown from $5 million last year to a budgeted amount of $14 million this year. The hospital continues to accomplish high patient and employee satisfaction scores, high quality scores, and an A+ credit rating. Debt is approximately $55 million, and cash reserves are approximately $95 million. Total operating revenues are approximately $130 million. The hospital employs 940 staff members. The average length of stay is 4.3 days. Annual capital expenditure is $4 million.

Information Systems Challenge Three years ago, the installation of computed radiography (CR) components to build a picture archiving and communication system (PACS) began, at an estimated total cost of $1 million. The following year, $400,000 was spent for additional CR components. Most recently the board of directors (with three new members) did not approve the request of $1.9 million for completion of the PACS, saying that it represented far too large a percentage of the organization's annual capital budget. Lakeland is still in need of completing the PACS program, with a board that is unlikely to approve the expenditure.

A number of factors are contributing to the board's decision not to authorize the additional $1.9 million for completion of the PACS:

Leadership's inability to guarantee to the board's satisfaction a �inancial return on the proposed investment

The board's perception that the radiologists are not committed to the hospital and to the community because none of the radiologists live in the community

The board's perception that the cardiologists are not committed to the hospital or to the community; the �ive cardiologists on staff are considered to be uncooperative among themselves and not supportive of the hospital's goals

Poor leadership within the IT department for providing the proper guidance on acquisition and implementation

The board's philosophy that Lakeland Medical Center should be more high-touch and less high-tech, and thus there is a philosophical difference over the need for a PACS

Jealousy among the medical staff members that the diagnostic imaging department continues to obtain capital approvals for large items representing a major percentage of the annual capital budget; thus, many in�luential members of the medical staff, such as surgeons, are not supportive of the expenditure

A few vocal employees speaking directly to board members expressing their concern that the PACS implementation will result in job loss for them

Leadership's inability to make a connection between this capital project and the strategic goals of the organization

The chief of staff, Iesha Brown, �irmly believes that a PACS will increase patient and physician satisfaction because waiting times for results will decrease, enhance patient education, improve staff member and physician productivity, improve

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clinical outcomes, improve patient safety, eliminate lost �ilms, reduce medical liability, assist in reducing patient length of stay, and increase revenue potential. She believes it is management's challenge to understand the key issues of the board and to present the necessary supportive information for ultimate approval of the PACS program.

Discussion Questions Conduct a role-play. Divide into four teams—the Lakeland Medical Center administrative team, the board, the medical staff members, and the hospital and community at large. Assume the role of your constituent group and answer these questions: What are your views on this proposal? What are your major concerns? What questions do you have? And for whom? Do you think this is a case of someone failing to do his or her homework in putting together a sound business plan for the PACS project, or do you think there are bigger issues at play here? Explain your answers as necessary.

Assume that the CEO believes that the PACS project is well aligned with Lakeland's strategic goals but that this case hasn't been made clear to the board. How might Lakeland build this case? Who should lead that effort? What work needs to be done that has not occurred yet?

Are the board's concerns about medical staff commitment relevant in this case? Why or why not?

Develop a strategy for addressing the board's concerns and winning their buy-in and approval for the PACS project. Include in your description the who, what, where, when, and how.

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14.22 Supplemental Listing of Related Case Studies and Webinars

Enabling Change in Health Care by Martha Hostetter, Sarah Klein, and Douglas McCarthy

Source: The Commonwealth Fund. Retrieved July 27, 2016, from https://medium.com/@CommonwealthFund/penn-medicine-center-for-health-care-innovation- enabling-change-612703a8f53b#.9ssb2vzab (https://medium.com/@CommonwealthFund/penn-medicine- center-for-health-care-innovation-enabling-change-612703a8f53b#.9ssb2vzab)

Publication date: August 2015

The University of Pennsylvania Health System founded the Center for Health Care Innovation in 2012 to test new models of care and build evidence of their effectiveness. The center is also designed to help Penn Medicine —a $4.9 billion system based in Philadelphia —prepare for payment models that reward clinicians for the value of the care they deliver.

Penn Medicine's working premise is that innovation relies not on inspiration but on having a ready infrastructure to develop, test, and implement new strategies for delivering health care. The health system also sees innovation as a discipline that can be learned. This case describes the methods used by the Center for Health Care Innovation to test new models of care and lessons learned. Analytics is an integral part.

The Road to Accountable Care: Building Systems for Population Health Management

by Douglas McCarthy, Sarah Klein, and Alexander Cohen

Source: The Commonwealth Fund. Retrieved July 27, 2016, from http://www.commonwealthfund.org/publications/case-studies/2014/oct/road-to-accountable-care- synthesis (http://www.commonwealthfund.org/publications/case-studies/2014/oct/road-to-accountable-care- synthesis)

Publication date: October 2014

This case study series describes how three diverse organizations are developing accountable care systems to improve the quality, reduce the costs of care, and ultimately improve the health of populations of patients insured by Medicare, Medicaid, and commercial health plans. They employ a constellation of strategies to identify and address unmet medical needs, improve care transitions, and reduce inef�iciencies and unnecessary variation in care. Care managers, outreach workers, and virtual care teams help improve outcomes for patients with complex needs that are costly to treat. Data integration and analytics are key to their efforts, although the sophistication of these capabilities varies. Two study sites have established a record of savings, and the third is still proving the potential of its approach. Their progress to date suggests that payment reforms can foster the will and accountability necessary to transform care.

Webinar: Engaging Physicians in the Health Care Revolution by Thomas Lee

Source: Harvard Business Review. Retrieved July 25, 2016, from https://hbr.org/webinar/2016/03/engaging-physicians-in-the-health-care-revolution (https://hbr.org/webinar/2016/03/engaging-physicians-in-the-health-care-revolution)

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This webinar discusses how today's health care marketplace is driven by competition based on value. Health care providers must focus on meeting patients' needs, delivering and measuring outcomes that matter to patients, and doing so as ef�iciently as possible.

In this new competitive market, value will be created by teams and collaboration will be the strategic differentiator. Social capital will be as important as �inancial capital, and social network science will be an essential tool for driving the spread of values throughout a provider organization. The webinar may be helpful background information in discussions on strategy and IT implications in health care.

Uber: Changing the Way the World Moves by Youngme Moo

Source: Harvard Business Review. Prod. No.: 316101-PDF-ENG

Publication date: November 1, 2015

In 2015, Uber is building what may be the largest point-to-point transportation network of its kind; it is literally changing the way the world moves. But unlike traditional transportation logistics companies such as FedEx, Uber has an incredibly lightweight infrastructure: It owns no vehicles, employs no drivers, and pays no vehicle maintenance costs. Instead, its network relies on peer-to-peer coordination between drivers and passengers, enabled by sophisticated software and a clever reputation system. But despite its remarkable early success, Uber is an extremely polarizing company. Its business model is highly disruptive, and although disruptive innovation can be a good thing, it is also true that disruptive companies tend to break things. This is certainly true for Uber, and it is one of the key tensions in the case: Uber's innovative business model is outpacing many of the laws regulating its industry, and although it is going to take the regulatory system some time to catch up, Uber doesn't appear to be willing to wait.

Inciting a Computer Revolution in Health Care: Implementing the Health Information Technology Act

by Pamela Varley

Source: Harvard Business Review. Prod. No.: HKS874-PDF-ENG

Publication date: April 4, 2011

This case poses this question: given the ambitious goals of the 2009 Health Information Technology for Economic and Clinical Health (HITECH) Act and the hurdles to its successful implementation, how should incoming national coordinator for health information technology David Blumenthal proceed? It is ideal for a class on strategic leadership. The case describes Blumenthal's resources, most notably the following:

$27 billion in Medicare and Medicaid incentives to hospitals, physicians, and other eligible providers who invested in “certi�ied” electronic health systems and made “Meaningful Use” of them

$2 billion in other funds to address speci�ic obstacles to widespread acquisition of health IT systems

Broad regulatory authority to de�ine “Meaningful Use” and set certi�ication criteria

It also describes Blumenthal's major challenge: to persuade thousands of hospitals and hundreds of thousands of doctors —many of them skeptical—that health IT systems were worth the time and trouble it would take to buy them and integrate them into daily clinical practice. Small, cash-strapped community hospitals and individual practitioners constituted a particular concern. Finally, it describes the nature of Blumenthal's regulatory task: to de�ine Meaningful Use quickly and to strike the right balance. De�ine Meaningful Use too strictly, and large numbers of health care providers might turn down the proffered incentives. De�ine it too loosely, and the expensive federal initiative would deliver little more than the market would have produced anyway. The case may be used on its own. It may also be used as the second part of a two-case unit with HKS Case 1937.0, “A. Inciting a Computer Revolution in Health Care: Weighing the Merits of the Health Information Technology Act.” HKS Case Number 1938.0.

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Information Technology and Clinical Operations at Beth Israel Deaconess Medical Center

by Richard Bohmer and F. Warren McFarlan

Source: Harvard Business School. 24 pages. Prod. No.: 607150-PDF-ENG

Publication date: June 4, 2007

Describes the history of clinical computing at Boston's Beth Israel Hospital and the development, since the 1996 merger to form the Beth Israel Deaconess Medical Center, of an information system designed to support the delivery of patient care. The hospitals' CIO, John Halamka, has overseen the development of an information system that places physicians at its center. Describes the design and function of �ive major components of the system: the online medical record, e- prescribing, physician order entry, the emergency department dashboard, and the performance manager. Provides students with an opportunity to identify key design principles for health care information systems and to discuss the unique implementation challenges that the health care delivery setting raises for CIOs and CEOs.

Partners Healthcare System: Transforming Health Care Services Delivery through Information Management

by Richard M. Kesner

Source: Richard Ivey School of Business Foundation. 15 pages. Prod. No.: 909E23-PDF-ENG

Publication date: February 26, 2010

This case considers the process of organizational transformation undertaken by Partners Healthcare System (PHS) since the 1990s as their hospital and af�iliated ambulatory medical practices have adopted EHR and CPOE systems. Encompassing a strategic investment in information technologies, widespread process change, and the pervasive use of institutional clinical decision-support and knowledge management systems, this story has been �ifteen years in the making, culminating in 2009 with the network-wide use of EHR and CPOE by all PHS doctors. These developments in turn opened the door to the rede�inition of services delivery and to the replacement of established therapies through the leveraging of the knowledge residing in 4.6 million now-digitized PHS patient records. As such, the PHS experience serves as a window into how one organization strove to address the daunting challenges of twenty-�irst-century health care services information management, as a template for success in the implementation of large-scale information systems among research-based hospitals across the United States and more broadly as a learning platform for industry executives in their efforts to transform health care delivery through data and knowledge management.

Mount Auburn Hospital: Physician Order Entry by Andrew McAfee, Sarah MacGregor, and Michael Benari

Source: Harvard Business School. 18 pages. Prod. No.: 603060 PDF-ENG

Publication date: December 17, 2002

Mount Auburn Hospital is preparing to introduce a physician order entry (POE) system throughout the hospital, starting with the labor and delivery ward. POE systems replace paper-based and oral medication ordering processes with an information system; the physician uses the system to enter medication orders, which are then transferred to the hospital's pharmacy. This is Mount Auburn's �irst experience with POE systems, and the implementation team must determine how best to introduce the technology to the physicians and other personnel who will use it.

Moore Medical Corporation by Andrew McAfee and Gregory Bounds

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Source: Harvard Business School. 21 pages. Prod. No.: 601142-PDF-ENG

Publication date: April 23, 2001

Moore Medical is a medium-sized distributor of medical supplies to practitioners such as podiatrists and emergency medical technicians. At the time of the case, it has relied on traditional customer channels such as catalogues, phones, and faxes to communicate product offerings, promotions, and availability, and to take orders. It is now attempting to shift to a “bricks and clicks” distributor with a strong Internet presence. It has already made substantial investments in an e- commerce website and in “back of�ice” enterprise resource planning (ERP) software to improve the ful�illment performance of its four distribution centers. The ERP software has not lived up to expectations in all areas, and the company must decide whether to invest in more modules for this system that might address its shortcomings. It must also decide whether to make a signi�icant additional investment in customer relationship management software.

CareGroup by F. Warren McFarlan and Robert D. Austin

Source: HBS Premier Case Collection. 22 pages. Prod. No.: 303097-PDF ENG

Publication date: January 29, 2003

Describes the circumstances leading to the three-and-a-half-day collapse of a major hospital group's IS capabilities. Identi�ies the technical reasons for the failure, management steps in dealing with the problem short term, and the long- term lessons they believe they learned from the incident. This case is accompanied by a short video for educators to show in class.

University Health Network: The MOE-MAR Initiative by Darren Meister and Ken Mark

Source: Richard Ivey School of Business Foundation. 22 pages. Prod. No.: 906E13-PDF-ENG

Publication date: February 9, 2010

The director of acute care information management at University Health Network is thinking about how to form a steering committee and several working groups to manage the implementation and ongoing operation of the medication order entry and medication administration record module. This initiative would be the most challenging and complex the IT department had ever undertaken. The director would need to address the concerns of administration, physicians, and nurses.

STARS Air Ambulance: An Information Systems Challenge by Malcolm Munro and Sid L. Huff

Source: Richard Ivey School of Business Foundation. 12 pages. Prod. No.: 908E04-PDF-ENG

Publication date: February 26, 2008

Shock Trauma Air Rescue Society (STARS) in Calgary, Canada, provides a safe, rapid, highly specialized, emergency medical transport system for the critically ill and injured by dispatching helicopters and air medical crew at any time. STARS operates a sophisticated communication system that links together hospitals, ground ambulance services, police, �ire�ighters, search and rescue organizations, and park wardens. The recently appointed CIO expected to inherit a sound IS operation but soon discovered a number of problems that seriously impeded his ability to manage progress. These included a poorly organized department, excessive and undisciplined use of consultants, inadequate project management, independent IS operations, IS staff members in other departments, other managers possibly resistant to change, and an IS department with no clearly organized role or mission. The basic issue in this case concerns what action the new CIO must undertake to ensure that the IS department can fully support the organization's mission.

8/1/2018 Print

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Secrets of HIE Success Revealed: Lessons from the Leaders by National eHealth Collaborative

Source: Retrieved from http://www.nationalehealth.org/ck�inder/user�iles/�iles/REPORT%20SecretsofHIESuccessRevealed.pdf (http://www.nationalehealth.org/ck�inder/user�iles/�iles/REPORT%20SecretsofHIESuccessRevealed.pdf)

Publication Date: July 2011

This report features twelve case studies of health information exchange (HIE) organizations that are leaders in achieving sustainable enterprises built on the value created by ef�iciently exchanging health information and mobilizing its effective use at the point of care. These organizations have focused on building a successful HIE through innovation, continuous learning, and business discipline with the end goal of improving quality, care coordination, and cost-effectiveness of health care. Although each organization's business model and strategy is unique, re�lecting the local, community-based nature of health care, each pro�ile offers a rich source of ideas and guidance to help HIE organizations that are at earlier stages of their life cycle succeed.

Note Note: Information for this case was taken from Collmann, J. C., & Cooper, T. (2007). Breaching the security of the Kaiser

Permanente Internet patient portal: The organizational foundations of information security. Journal of the American Medical Informatics Association, 14(2), 239–243.