Three Steps IT Should Take in Response to Healthcare Reform

January 2011

By Daniel Herman
Founder and Managing Principal, Aspen Advisors

The November 2010 election results might threaten elements of the Accountable Care Act, but it would be a mistake for healthcare organizations to hunker down and do nothing. Initiatives such as Accountable Care Organizations (ACOs), Patient-Centered Medical Homes (PCMHs), and demonstration of the “meaningful use” of healthcare information technology are likely to survive the politics of the hour because of their potential to reduce healthcare costs, improve quality outcomes, and promote interoperability among healthcare entities, with or without government help.

Many of these initiatives demand that hospitals and physicians change the way they operate with the goals of lowering costs, coordinating care, and improving the effectiveness of care delivery. Patients are becoming more engaged in their care and the selection of providers; health delivery and financing organizations are preparing for new reimbursement mechanisms and meeting new reporting requirements; and Health Information Exchanges (HIEs) are increasingly coming to fruition around the country. Technology will play an important role in supporting these efforts.

But technology alone will not be enough.

People, Processes, Then Technology

At the moment, conventional wisdom says that hospitals and physician organizations must make massive investments in new technology to support PPACA (Patient Protection and Affordable Care Act) and HITECH (Health Information Technology for Economic and Clinical Health Act) initiatives. Certainly, investment is necessary, but it may need not break-the-bank, lay waste to years of previous technology investments, and take years to realize value.

Truth is, few organizations can afford huge investments at this time, even with the help of the Meaningful Use incentives from the Centers for Medicare and Medicaid Services (CMS). As many in our industry will attest, information technology in itself is rarely the “white horse riding in on a silver bullet”. Organizational change is never as easy as investing in the latest technological advancement. I recall in 1998 the CEO of an academic medical center was complaining that test turn around time hadn’t improved after the implementation of a new radiology information system. He laughed but understood what I was referring to when I told him that they didn’t buy the “cattle prod” peripheral to alert the radiologists that it was time to read and dictate their results. IT is only a tool. Engaged leadership, skilled and trained staff, and effective operational processes are key to extracting value from expensive IT tools!

Outdated technology and limited resources are a fact in every IT executive’s life. At the same time, fundamental change to “accountable” healthcare delivery and financing is making healthcare organizations’ responsiveness to meet market demands more critical than ever. Whether moving to a service-line management model, reducing cost structures, or improving organizational performance, IT executives must support the culture of “accountable care” by expediting change within their own organizations and departments. Simply living with the constraints of outdated systems while replacements are implemented is not enough.1

IT executives must look to innovative and cost effective ways (perhaps by emulating successes of our peers in other industries that have gone through rapid change) to deliver technology solutions that will have a measurable and visible effect on their organization’s ability to survive and compete under healthcare reform. Healthcare organizations cannot afford to waste time, resources, or capital to “bet the farm” to demonstrate results when they are expected to be accountable for the cost and clinical outcomes of a population of patients across the care continuum. Chief Information Officers (CIOs) must accept responsibility for supporting their organization’s ability to migrate into a virtually “accountable” and integrated enterprise and ensure that the IT function does not end up limiting it.1

Healthcare organizations must take a strategic approach to allocating IT investments, holding business unit leaders accountable for results, and demonstrating management fortitude to say no to IT requests that are not aligned with priorities or divert focus. Many IT leadership teams have a close partnership with their organizational leaders and already function in this way by following three simple steps: learn, listen, and lead.

The IT Three-Step

Learn. IT leaders must keep abreast of the latest trends in the industry. And if they are to formulate truly valuable strategies and tactics about the role technology will play in response, their understanding must dig deep beneath the surface definitions.

A good starting point might be the Health Reform web site. Reading books such as Partners in Health by two authors from the Kaiser Permanente Institute for Health Policy or spending time at the Brookings Dartmouth ACO Learning Network are also examples of wise investments of time.

Another wise investment of time would be conducting a site visit to an organization with a clear business strategy and operating goals that have initiated implementing tactics to address aspects of accountable care. Geisinger Health System, Dartmouth Hitchcock Clinic, and Kaiser Permanente have all participated in early demonstration projects and are considered as leaders in the industry – from both from a strategy and IT perspective. These organizations have demonstrated improvement in outcomes and reduced costs. Allina Health System, Northshore University Health System, and UPMC Health System have clear strategies and made invest in integrated Electronic Medical Record (EMR) systems that will meet HITECH Meaningful Use incentives. They are now focused on using business intelligence (BI) tools to extract and convert transactional data to meaningful information on which to manage care, improve quality, and reduce costs. Organizations such as Stanford University Hospital, John Muir Health, and Lucile Packard Children’s Hospital are using a structured methodology supported by an affordable SaaS project management tool to plan, initiate, and manage their portfolio of IT projects and process change initiatives related to Meaningful Use.

Listen. IT leaders must know their own organizations as well, binge cognizant of their institution’s management culture, strategic direction, and capabilities. Asking good questions, listening to answers, and synthesizing the information are essential skills for uncovering and understanding the executive team, middle managers, and line personnel who are trying to meet operating goals. This, in turn, will shape the people, process, and technology changes in ways that ensure their organizational adoption.

Moreover, lessons learned from both external research and internal knowledge can facilitate focused and probing discussion with your various technology vendors. The result is wiser IT investments.

The ACO is an evolving concept where “one size doesn’t fit all”. Its goal is to deliver coordinated and efficient care. Current ACO proposals allow flexibility in both the type of organizations that can serve as an ACO and the methods by which providers would be paid. Thus, the types of organizations that could serve as an ACO and the method of reimbursement could vary.2 The type and degree of IT support and integration required to support the ACO strategy for a small community hospital with a limited employed provider network and no financing entity would substantially differ from that of a regional multi-entity integrated delivery network with an employed multi-specialty provider group and an affiliated managed care organization.

Lead. Having listened and learned, the IT team is now in position to create a roadmap that is aligned with the institution’s strategic direction, annual operating goals, and management capabilities. Examining people and processes first – and then determining how to meet technology needs will lead to the most effective roadmap.

First, have a vision but get practical. You can’t get there if you don’t know where you are going. Set the vision, obtain executive commitment, secure key sponsors that are accountable, and demonstrate clear results (that can me measured and the organization values) at key intervals.

Second, create an accountable IT organization. Get the right people, with the right skills and right core values. If you don’t have the right staff to pull it off, buy, borrow, or steal them. You can always buy or borrow the technology or vendor expertise skills (ensuring knowledge transfer occurs). However, the customer service philosophy, “can do” attitude, and desire to professionally grow must be instilled in your staff. Once in place, train and incent these people to be part of a can do culture that is ready to adapt to the demands of reform. Pursue innovative HR, performance-based compensation, and leadership development strategies to recruit and retain skilled staff in today’s competitive market. If staffers are hesitant, coach them. If they are unwilling or unable, pull the trigger and move on. In the words of the late process reengineering proponent Michael Hammer, this is a journey where you must carry the wounded and shoot the dissenters. Change is very difficult and involves tough decisions, tenacity, and hard work, but absent the right people, IT responses are doomed to mediocrity at best, failure at worst.

Third, instill a culture of discipline. Implement and enforce structured, repeatable IT Service Management processes and hold your IT leadership team accountable for its execution. Frameworks such as ITIL (Information Technology Infrastructure Library) or COBIT (The Control Objectives for Information and related Technology) are well deployed in other industries and result in higher system availability and lower costs. Often, faults in basic IT blocking and tackeling (e.g. change, release, project, continuity management) result in outages, missed deadlines, rework, and customer dissatisfaction. Several years ago, Indiana University Health made a substantial investment in their EMR strategy (Project PACE) and technology infrastructure to support their delivery system composed of facilities throughout Indiana. As a result of adopting and implementing structured ITIL service management processes, they were able to substantially increase system uptime, improve the effectiveness of their service desk, enhance service level metrics, and support the organization’s growth without a commensurate increase in IS staffing and expense.

Fourth, create the right technology mix for the institution’s culture and business needs. For example, addressing reform-driven initiatives may drive a technology strategy that facilitates patient-centric communication among physicians, acute care, ambulatory care, and post acute settings; supports bundled reimbursement across these settings; or requires business intelligence tools to demonstrate cost effective and quality improvement outcomes. In implementing such a strategy, IT teams should uncouple complex solutions into manageable components that can be implemented in stages, with each stage demonstrating business value and results. We have found that many organizations can support their near-term business and clinical goals by first improving their operational processes together with maximizing their current technology environment and then either fitting the critical pieces around their current IT platform or migrating to a more integrated IT strategy over time.

A Case Study

Consider a hypothetical healthcare organization where an engaged IT team has been part of the response to healthcare reform from the first strategic planning sessions. Even as the organization races to achieve the technology and process requirements for Meaningful Use, it decides to pursue a Patient Centered Medical Home (PCMH), as a first step toward an ACO strategy. An EMR that is accessible across the continuum of care is essential for both the PCMH and Meaningful Use. But simply implementing the EMR and the underlying technology infrastructure that grants access is not enough.

If clinicians fail to use the technology consistently – or use it poorly – the “system” breaks down. Therefore, the IT team must begin by working with peers to understand what operations affect care coordination of patients with chronic conditions, how those operations function, and how they can support the PCMH initiative.

For example, when do caregivers need access and how does the access differ among specialty and caregiver (e.g. primary care physician, specialist, nurse, pharmacist, home care giver)? What care team member is accountable at each phase of the process? How will staff be trained?

To answer those questions, IT should work with the PCMH care team that will use the EMR to examine the current approach, proposed plans, and supporting operational processes. This might include a site visit to a peer organization that has successfully made the transition – not solely to see the technology but, more importantly, to examine the operational process being used and how the technology supports the initiative. All of this leads to defining ways to measure the gaps between what is in place now and what is being proposed.

Then, the IT team can identify potential or existing problems; create success metrics for the short-term, medium-term, and long-term solutions; explore what is possible with process change and existing technology; create a realistic timeline for success; and use widely respected performance improvement methodologies (e.g., Lean, Six Sigma) to achieve the goals.

Although, not a clinical example, when I was leading a revenue cycle implementation in the early 1980s, one of the first activities I conducted after organizing the project was to take the project leadership team and sponsors (the CFO and Director of Patient Financial Services) on a site visit to an organization that was using the system very effectively. The purpose of the visit was to help the team understand the admitting, registration, billing, HIM, and reporting policies and processes that were in place and how the system could be configured to support a very efficient and leanly staffed operation. Over 25 years ago we saw a “paper-lean” business office where A/R days were below 40!

Be Forward Thinking

It is said “there is never any rest for the weary.” While an EMR that enables connections among providers and patient self-access may be an immediate need for many healthcare organizations, the next several years will bring many other demands on the IT team. Among the considerations:

How and when will you implement revenue cycle management solutions to support new regulatory demands, transition to ICD-10, and acommodate new reimbursement mechanisms such as bundled payments?
How will you define processes and evaluate business intelligence, data warehousing, and decision support technologies that will promote the practice of evidence-based medicine and extract pertinent information to evaluate quality and cost?
What is your strategy and supporting tactics to accommodate “affiliated”, non-owned organizations that will comprise your institutions’s ACO “network”?
How will you implement a sophisticated patient-provider communication tools and approaches?
What will your response be to the growth of telehealth, which has the potential to offer improved costs and quality for high risk and chronic conditions?

These are all crucial challenges that will confront healthcare organizations in waves over the next several years. Regardless of how you answer the questions above, there will always be one constant: technology cannot exist or be implemented in isolation. Healthcare reform and HITECH place a lot of emphasis on information technology, and it reminds me of a great quote by Jim Collins, the author of Good to Great: “Information Technology is never the reason for an organization’s success or failure, but can be an accelerator of either.” With these three repeatable steps and by using the people-process-technology framework as an organizational touchstone, healthcare organizations (and their IT functions) can excel in dramatically enhancing their chances for success.

References:
1“No Guts, No Glory, No Job”, D. Herman, HIMSS News, January, 1995
2“Can Accountable Care Organizations Improve the Value of Health Care by Solving the Cost and Quality Quandaries”, K Devers, R. Berenson, Timely Analysis of Immediate Health Policy Issues – Robert Wood Johnson Foundation & Urban Institute, October, 2009