Business Finance - Operations Management Can someone do Week 4 assignment in MHA 616 Health Care Management Information Systems

· Case 15: The Decision to Develop an IT Strategic Plan

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?

CASE 15: 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 financial 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 financial officer (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a result, the organization's financial systems are very well developed, but the EHR system is very basic and becoming outdated. Integration between the financial and EHR systems is achieved through in-house-developed interfaces, which have not been updated in a couple of years. 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?

CASE 16: 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 fiscal year for the next five 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 identified 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 benefits 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 a new 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 fiscal year. Smart pumps have been shown to significantly reduce medication administration errors, thus reducing patient harm. This expenditure would consume roughly half of all of the available capital dollars for that fiscal 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 that 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?

CASE 17: STRATEGIC IS PLANNING FOR THE HOSPITAL ED

Founded in 1900, Newcastle Hospital today is a 375-bed, not-for-profit 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 affiliate 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 twenty-five 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 difficult environment characterized by relatively poor reimbursement and severe competition. There is one other acute-care hospital in the county and a total of thirty-five 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 confidence, 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 financial statements, began resolving extensive litigation, and set out to reestablish immediate operations, future finances, 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 “financial, 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: first, inflexibility 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 define, measure, and improve the ED's service performance. The first 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-defined 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 identified by the hospital CEO.

ORGANIZATIONAL FACTORS

Undefined 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.

Data integrity. Data throughout the hospital were undefined 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 defined 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 benefit 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 difficult 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 first 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.

CASE 18: 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 financially successful, but in recent years several capital investments have not brought high returns. As a result, project investment decisions have become more conservative and oriented toward financial returns. Competitive forces have continued to grow in the market, and significant internal expense items (such as the organization's pension program, paid leave bank, and health insurance program) have put strains on Lakeland's financial 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 financial 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 five 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 influential 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, firmly 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 clinical outcomes, improve patient safety, eliminate lost films, 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.

CASE 19: LIBERTY MEDICAL CENTER NETWORK IMPACTED BY MALWARE ATTACK

Liberty Medical Center is in the Southeast in a coastal community serving approximately 200,000 individuals and relatively large tourist population. Liberty was recently impacted by a malware attack. The attack happened early Friday morning and officials reported that portions of the network were offline during recovery.

INFORMATION SYSTEMS CHALLENGE

According to the CIO, George Burns, who manages the IT department, the medical center resorted to downtime procedures while they continued to see, treat, and admit patients. Systems were down for over two weeks, including the organization's electronic health record system. Liberty conducts daily backups of all of their systems. In this incident, only one day's worth of data was lost. Although not ideal, it could have been much worse. Staff went immediately into downtime procedures. Given that they are in a hurricane-prone area and electricity outages are common due to severe weather, staff are well equipped and trained on downtime procedures.

Six months after the attack, Mr. Burns admits that he is finally able to breathe and reflect on the incident. He acknowledges that Liberty was very lucky. The IT team detected the virus infection before it was able to deliver its final blow and demand ransom. Had it come to a demand for ransom, the senior leadership team indicated that they would seriously consider paying given the risks of a long-term outage. Mr. Burns was pleased that the organization had strong backup, strong downtime procedures, and the servers were divided in such a way that when the attack occurred, it was contained. Minimal data was lost, except for clinical notes that had not been closed by clinicians at the end of day. No patients died nor did an adverse patient events occur because of the malware incident.

Even though Liberty was lucky, they did not escape the incident unscathed. The incident cost the organization nearly eight million dollars, half of which was due to lost revenue. A class action lawsuit was also filed by two patients against the organization.

According to Mr. Burns and the leadership team, they learned a lot following the malware incident. First, having a strong backup in place and up-to-date downtime procedures helped. At least twice a year, on both the day and night shifts, they simulated downtime procedures to ensure staff were ready. They also added Carbon Black, a high-tech malware protection, consulted with two cybersecurity firms to aid in monitoring and response, and added additional firewalls. Leadership had also had conversations in advance about what to do in the event of a ransomware attack, so they had plans in place.

Liberty has found, like many health care organizations, that the attempts to attack their systems do not stop. In the past month alone, the firewall protection blocked nearly ten thousand malicious attacks. Attacks from other countries are on the rise. Spam Filter blocked over 275,000 emails in the last month. Red Canary/Carbon Black investigated over 25 million pieces of data into and out of the systems and found 70,000 malicious events, 120 confirmed attacks, and one high security event that was stopped in less than one minute. Mr. Burns argues you can't let your guard down. Malicious attacks on health IT are relentless.