Healthcare CIOs must wrestle back control of technology from government

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.”


Meaningful Use piles the pressure on US healthcare providers

Meaningful use, the $30 billion US investment programme in Electronic Health Records, has reached a crossroads.  Where it goes next could have important implication for the whole healthcare IT industry.

With $21 billion spent by the Office of the National co-ordinator so far meaningful use has reached maturity and is coming under intense national scrutiny.

Begun back in 2011 as part of the HITECH health IT investment initiative, itself part of the US economic stimulus act, meaningful use has accelerated adoption of EMRs in hospitals and physician offices, with 80% of hospitals having received incentive funds and 50% of physician offices.

Advocates say that in just three years meaningful use has enabled the US healthcare system to reach a critical mass and achieve a tipping point.

Meaningful use comes in three stages, each more demanding than the last.  Stage one set fairly basic requirements that most healthcare providers were able to meet by going out and buying an electronic health record system and beginning to use it.

Stage two, due to come into force in 2014, however goes much further than use of electronic records, focusing on sharing them — with different parts of the hospital, with other hospitals, and with patients

Stage two also creates more clinical quality measures to track; suppliers must demonstrate interoperability (both creating and pushing records as well as consuming and populating them) with at least one other EHR, and systems must let patients view, download and transmit their own electronic records.

Stage three of meaningful use, due in 2016, raises the bar even further with a focus on improving quality, safety, and efficiency, leading to improved health outcomes.

Healthcare providers and suppliers are struggling to meet the demanding stage two requirements in full.  A study by the Centers for Disease Control and Prevention found that only 13 percent of physicians have an EHR that meets stage two criteria.

Should policy makers consolidate on progress achieved over the past three years, and ensure benefit is achieved from systems now in use; or should they double up efforts on interoperability, clinical quality, driving workflow improvements, and patient enablement?

A significant number of critics say the surging adoption numbers mask some real problems, including many users unhappy with the usability of EHR systems that have bought and installed to achieve meaningful use incentives.

Some healthcare providers have found that the electronic record systems they implemented to met stage one don’t have the functionality or are not user friendly enough to meet the requirements of later stages.

John Moore, managing director of Chilmark Research, believes the short-term stimulus monies have acted like steroids and have created a boated “false market” that led many providers to implement rigid, inflexible EHR systems, with poor usability and customer service to boot.

In an interview with CIO magazine he added that incentives mean EHR vendors have not been forced to innovate sufficiently and ensure that they deliver a great user experience.

This view is supported by a recent RAND Health survey that concluded many clinicians are not happy with EHRs. The remedy, RAND Health concludes, is better EHR usability.

A 2013 report by Black Book Rankings, meanwhile, suggested that as many as 17% of medical practices were so frustrated with their new electronic record systems they were planning to rip and replace them.

Others worry that meaningful use has widened the digital divide in US healthcare.  Meaningful use only covers healthcare providers receiving Medicare funding. Behavioral health, most pediatricians and long-term care providers are not covered.

Other concerns focus on rural and critical care providers falling behind on bringing the investment needed for the next stage of meaningful use.

Perhaps the biggest issue is that meaningful use is just one of a wave of initiatives hitting the industry simultaneously.  New government requirements, a decline in reimbursement and massive change in the delivery system, including a huge wave of mergers are all occurring at once.

Added to this entire industry also due to implement ICD10 in October, a change that carries huge costs for   A recent report suggested that physician practices in particular would struggle to meet the cost.  ICD10 implementation has already been delayed once.

Russ Branzell, president of the College of Health Information Management Executives (CHIME), says some CIOs are struggling with the degree of change.  “The amount of change hitting us at once means there is a perfect storm for some.”

Braznell says that CHIME still strongly supports meaningful use, but Healthcare CIOs are facing multiple challenges piling up on them at once.