Healthcare CIOs need to wrestle back control of the technology agenda from government if they are to drive improvements in productivity.
CIOs in the US healthcare industry need to seize back the initiative on technology and make the case for investment in information technology as the driver of transformative change in healthcare.
To do so they must grasp the nettle on proving return on capital investment and IT as a strategic driver of productivity, argued Saum Sutaria, MD, director healthcare systems and services, McKinsey.
Dr Sutaria told the CHIME HIMSS CIO Summit in Orlando that healthcare “has failed to increase productivity and that IT is still viewed as a cost centre by most Chief Executives and Chief Financial Officers”.
“You have got to take control of technology agenda from what has been government regulated. Otherwise you will find it very different to change peers views that technology is a cost.”
Too much attention had been paid to chasing meaningful use dollars rather than thinking about how technology is used to deliver transformative change.
He told the assembled US CIOs: “This coming era may be when this group of individuals has to take more action based alternatives.”
“Should the tech strategy actually drive the business strategy in healthcare for a change?”
With massive healthcare in the US the biggest financial reality facing most providers was cuts in medicare reimbursements. “This has got to be about better more efficient care that is information enabled. Number one priority is to get more efficient.”
But Dr Sutaria sad the current wave of provider mergers would not drive real productivity. “Most of value from mergers and acquisitions is coming from the old bag of tricks: raising prices and cutting overheads.
However, CIOs are not yet stepping up to take on the leadership challenge of productivity and making the running in the board room. But nor is anyone else.
“A lot of people on CIO shop are being shrinking violets on where is the ROI coming from this huge investment. How do we get the return? We don’t want to admit that today. “
Taking a tough realistic line on what the return on investment was for capital intensive investments is against cost of capital would result in different types of investment decisions.
“You’ll find that a lot of traditional infrastructure heavy investments just don’t meet the bar,” said Dr Sutaria.
He added: “The first step is to wrestle the technology agenda from government. “We’ve seen orgs chase meaningful use dollars and then it just stops. But meaningful use dollars don’t come close to delivering return on the investment needed.”
The McKinsey director called on the audience of CIOs to rise to the challenge. “Many of executives in this room have the ideas that could transform healthcare delivery but not be willing to put that agenda on the table, and traditional management not being willing to put on the table either.”
To take on this daunting challenge he urged CIOs to form new alliances on productivity. “This group could do more to identify coalitions in their organisations outside their current walls.”
One key axis for CIOs to lead on is how to engage with consumers, “Need to step outside of normal world, engaging with consumers, find out what they want and use that to drive changes in operations
He added: “Some 80% of what physicians do could be done better by computer. And it’s the 80% of what they do that needs to be changed to get better decisions and patient outcomes.”
He concluded; “We have the most educated service workforce in any industry today and greater variability.”