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Readers Write: Healthcare IT vs. Corporate IT

May 3, 2013 Readers Write 4 Comments

Healthcare IT vs. Corporate IT
By Anonymous

This is in response to an April 29 reader comment suggesting that healthcare IT leaders are unable or unwilling to make decisive decisions that would improve the bottom line.

I don’t think it’s always not making a “responsible” decision on the part of the HIT leadership. There are different priorities in healthcare organizations versus us in the corporate world. 

In the corporate world, we in IT are well aligned to the profit motive of our company. Period. In healthcare IT, leadership is often not worried about that profit motive. They say they are, but the other departments we serve — they say they are worried about finances, but they really aren’t. HIT leadership doesn’t want to have a crucial conversation with the department heads in the healthcare system about their wasteful applications. 

The infrastructure is normally fully under the control of HIT leadership. There is a ton of cost cutting that happens there. Way too much in my opinion, causing unnecessary downtime that would never happen in a corporate IT shop. That’s due to the cost cutting to not have that switch stack be fully redundant or we don’t need to buy ALL that storage area network growth space now … and then you run out. I’m looking at you HIT shops in the North Carolina Tobacco Road region. 

The real HIT waste is in the applications. Nearly every health system I’m familiar with have some pretty serious application redundancies. What I mean is an HR department that runs both Kronos and Lawson and the payroll department is not part of HR and not outsourced to ADP or the like. That’s two very expensive systems that can do the same job if someone can tell or convince HR to just pick one. 

Or better yet, just let someone else run that whole part of your operation. Many of the corporate IT guys handled the payroll / processing / HR system cost issue a long time ago via outsourcing. Then HR can focus on, oh I don’t know, recruiting people and working on benefit plans. That doesn’t seem to be all that common in healthcare IT.  

Also, your hospital maintenance departments run very expensive name-brand systems meant to run whole manufacturing operations. To do what? Inventory objects and print out repair orders. I’m not talking about your medical device department here, just good old facilities and services. 

The list of applications that cost serious dollars and do only  small jobs inside the healthcare operation as a whole goes on and on.  Corporate-based IT shops would have had a programmer build a little Web application or SharePoint portal to eliminate a few hundred little apps inside a typical healthcare IT shop. 

There’s not a lot of movement in HIT shops to simplify. Simplicity equals cost savings in both break/fix and maintenance/purchase dollars. 

Why not focus on those applications particularly that need simplification and save costs? 

I believe it’s political costs mainly in the healthcare IT field. Those department heads often hold much power in an organization. Healthcare IT is not the sole owner or, at minimum, the first owner of the application. That department or unit is. They can claim patient benefit or employee benefit, or most often, that the redundant systems allow them to have their own inflated head counts. 

Will a healthcare IT leader have time to quantify those patient benefits into a dollar measurement to then justify the maintenance cost and support/time cost for that application? No. Who has that kind of time? 

There are often redundant departments in a healthcare operation. Health systems have DBAs/report writers creating reports for clinicians, but there is a whole other Decision Support Services department with their own specialized application. Nine times out of 10, it’s the same data being reported in almost the same way, and let’s not talk about that DSS app and how it gets the data every day or night and the integration and support work there. In some shops, those DSS people with limited SQL writing skills will even tug some of that DBA’s time to help with their work. 

In corporate IT, there is one measure — efficiency measured in real dollars. There are no patients, so the hard math is easier to quantify. How much does that application cost to have support, maintenance, and upgrades purchased? OK, that’s $100. What does it save us in time running the business vs. another application/process? We are in the positive side in $1,000s — it is justified. There isn’t a lot of worry about the business unit’s politics other than making sure their process is as lean and efficient as possible and that usability of the application is good so that the process time is as efficient as possible.

That’s not to say that a corporate business unit doesn’t have its own political pull, but often you can show the C-level the numbers and those numbers win the argument. Proof in the corporate world means something. I’ve been in many healthcare IT ROI discussions showing the cost savings that could happen. They are normally hundreds of thousands to millions when you take into account the database licenses at the infrastructure layer also. Healthcare IT leadership still passes. It’s not their priority to go against the department heads. 

Internal politics are everywhere. In healthcare, political might can win an argument when the proof in dollars are staggeringly in support of the other point.

I’d say this is changing in healthcare IT as many organizations are having their bottom line get worse and now some of those golden goose political situations are getting weaker.

The dollars of cost argument is winning the day here and there. It’s just the wins are only on small projects and applications to show the cost saving committee that we saved $50K. That’s for show. The real cost saving opportunities that exist are hundreds of thousands in savings.

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Currently there are "4 comments" on this Article:

  1. To summarize the author, “it’s not our fault, it’s those damn clinicians who want too much from us.” Very insightful. Seems like government, insurance, hospital administrators, and IT staff are all having the same problem – corraling those pesky clinicians into a nice neat box where they listen to the people who have no idea how to do their jobs.

  2. This sounds like it was written by someone from corporate IT who attempted to make the jump into healthcare IT but failed. When one is dealing with doctors, professors, and researchers within any given healthcare system, you cannot treat them like a bunch of Lemmings who will blindly follow the new IT guy (or gal) in town. The new IT leader must have a lot of patience and establish a long history of smaller successes within healthcare IT and learn to nurture a lot of different relationships. Nobody knows this better than Stephanie Reel at Johns Hopkins.

    If one shows up in healthcare It with a cookie cutter business plan that banks on the easy and successful deployment of canned methodologies like ITIL, Lean and other management ‘flavor of the month’ ideals, one is destined to get burned. Healthcare IT has many, many nuances, and yes even more opinions, and politics which can rival DC politics. However, those opionions are held by individuals who are highly intelligent, very well-educated, highly motivated and very focused. If you do not take the time to understand that and understand them, then their stubborn patience and political maneuvering will undo any corporate IT cowboy attempting to move into healthcare IT.

  3. Great article, definitely insightful.

    Ultimately it seems that the failures you outline are due to bad governance. The boards of non-profit hospitals are often filled with regional celebrities to support their fundraising mission, and not by folks with experience managing large organizations. Larger academic centers are run like… well, like academic institutions, with all the politics, inertia, and inefficiencies that one finds in any large university. Ultimately, if an organization serves an inelastic market that is willing to pay for ever increasing costs (health, education), then there is little reason to focus on efficiency. This clearly needs to change.

    I do disagree with one point, though: that corporate IT can measure its success solely on profit. Many corporations have been successful with a focus on both quality and profit, which is why HIT has no excuse for refusing to learn from other industries. Look at the impact that Deming’s work had on the success of corporations such as Toyota, and how this thinking has spread across industries and sparked an IT renaissance with the devops movement, lean startups, and a stronger partnership between IT and the executive suite (see _The Phoenix Project_). Meanwhile, all that healthcare has managed to emulate from this is a cargo cult of Six Sigma consultants and color-coordinated belts.

    Healthcare needs better governance, but HIT also has a lot of catching up to do.

  4. I moved into healthcare IT from another field (telecommunications). I can tell you from personal experience that many of the same inefficiencies/unknows that plague healthcare plagued telecommunications with a different flavor. The actual cost of providing service to a customer was almost impossible to calculate, and inventories were a complete mess. Praising corporate IT in other fields as being more efficient is naive; we just aren’t as familar with their dirty laundry. Even finance, one of the most sophisticated users of IT, was recently troubled when reading a false report on the AP caused the DOW to slip.

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