For most providers, the era of acquiring and implementing an electronic health record is coming to a close. Given incentives by meaningful use regulations and motivated to prepare themselves for an era molded by value-based reimbursement, health care providers have devoted the last several years to acquiring and implementing electronic health records.
While there is still an active market for EHRs, concerns about the future of some vendors or dissatisfaction with EHR performance have led most providers to refocus their information technology strategies on the post-EHR era. And there is much to do. Interest in population health solutions is increasing. Neglected revenue cycle systems need attention. Investments in analytics and enterprise data warehouses are overdue. And a desire to improve the patient experience is leading to plans to extend organizations' portal, implement remote patient monitoring capabilities, add telehealth support and refine social media presence.
The EHR era and the post-EHR era have permanently elevated the strategically critical importance of information technology. Not only do IT investments now consume a greater percentage of health care organizations' operating and capital budgets than they did in the past (and are unlikely to return to pre-meaningful use levels), but they have become truly foundational for thriving in an era of payment reform.
Organizations must therefore focus not only on the next wave of applications but also on their core skills and capabilities in applying IT to further organizational strategies and operational plans. There will be another era after the upcoming one and an era after that. Providers must prepare for the IT long game.
Lessons from other sectors
Several studies have examined organizations that have been particularly effective in the use of IT, often over very long periods of time. Among them are organizations that have developed information systems that defined an industry (as Amazon has altered the retail industry, for example), organizations that have a reputation for being effective over decades (such as Bank of America) and organizations that have demonstrated exceptional IT innovation (the United Services Automobile Association, for example).
The studies have attempted to identify attributes that have created the environment in which effectiveness has occurred. In other words, the studies have sought to answer the question, What are the organizational attributes that result in some organizations developing and sustaining truly remarkable IT prowess?
If an organization understands these attributes and desires to be effective in its use of IT, it is in a position to develop strategies and approaches to create or modify its own attributes. For example, one attribute is having strong working relationships between the IT function and the rest of the organization. If an organization finds that its own relationships are weak or dysfunctional, it can develop plans to improve them.
The studies suggest that organizations that aspire to high levels of effectiveness and innovation in their application of IT must develop the core capacity of the organization to achieve such effectiveness. This is a challenge different from that of implementing specific applications to improve operations or enhance management decision-making. For an analogy, consider marathon running. A runner’s training, injury management and diet are designed to ensure the core capacity to run a marathon. This capacity development is different from that of running a specific marathon, which must consider the nature of the course, the competing runners and the weather.
Although having somewhat differing conclusions (resulting in part from somewhat different study questions), the studies have identified a consistent set of factors that enable exceptional effectiveness in applying IT.
Creating long-term success
Individuals and leadership matter. It is critical that the organization possess talented, skilled and experienced individuals. These individuals will occupy a variety of roles: chief executive officer, chief information officer, IT staff and user middle managers. These individuals must be strong contributors.
This observation may seem trite: Having talent in key positions enhances any series of organizational undertakings. Yet, the studies found that leadership is essential. Leaders must understand the organization's vision, communicate that vision, be able to recruit and motivate a team, and have the staying power to see large IT implementations through several years of work with disappointments, setbacks and political problems along the way.
Relationships are critical. Not only must the individual players be strong, but the team must be strong. Excellent collaboration and all of the relationships that make a team great must exist between the individuals who lead the organization. Strong teamwork is as essential in advancing an organization as it is in sports.
Alignment must be mature and strong. The connections between IT investments and organizational strategies and operational needs must be clear. Moreover, the processes used to arrive at alignment must be inclusive and rigorous and invite debate.
Strategic initiatives should focus on significant core clinical and operational processes, expanding and capitalizing on the ability to gather critical data, and enabling new business models. Often, organizations in the studies pursued all three simultaneously.
Evaluation of IT opportunities must be thoughtful. Major IT initiatives and the improvements that they are intended to effect should be analyzed and studied thoroughly. While the analyses should be rigorous and candid, organizations should also understand that a large amount of vision, management instinct and “feel” often guide the decision to initiate and continue investment. For example, what is the strategic and clinical return on investment of an integrated electronic health record?
IT governance must be efficient, inclusive and thoughtful. IT governance is composed of the processes, reporting relationships, roles and committees that an organization develops to make decisions about IT resources and activities and to manage the execution of those decisions. These decisions involve issues such as setting priorities, determining budgets, defining project management approaches and addressing IT problems. Decisions that are impulsive, prone to reversal or made only after endless meetings can paralyze IT progress.
Change management skills must be first-rate. Information technology implementation is invariably an important component, but only a component, of provider efforts to improve core processes, enhance decision-making or introduce new business models. Suboptimal change management skills lead to a dilution of the IT investment; the return that could have been has been frittered away and it can take five to seven years for the organization to recast itself. Moreover, managing change requires addressing interacting factors of political, cultural and work processes — factors made more complex when change occurs in the diverse entities that make up a health system.
Singles win pennants. In the course of improving processes, changing business models and gathering data, organizations carry out a series of initiatives that improve their performance. The vast majority of these initiatives do not by themselves fundamentally alter the competitive position of the organization, but in the aggregate they make a significant contribution, just as the difference between a great hotel and a mediocre hotel is not simply the presence of clean sheets or hot water but a thousand such things.
Often, IT-enabled advances result from a relentless, never-ending focus on continuous improvement. This steady stream of improvements is punctuated from time to time by a major leap forward such as a population health management suite.
The organization must encourage innovation. The organization’s culture and leaders must encourage IT-based innovation and experimentation. What opportunities, for example, does telehealth present, and how do we gain experience with it? This encouragement needs to be practical and goal-directed: A real business problem, crisis or opportunity must exist, and the project must have budgets, political protection and deliverables.
Technology and technical infrastructure are the great enablers. New technologies can provide new opportunities for organizations to embark on major transformations of their activities. We have seen this in retail and music distribution. This implies that the health care CIO must have not only superior business and clinical understanding but also superior understanding of the maturity, capabilities and possible evolution of various information technologies. The studies also stress the importance of well-developed technical architecture – architecture that ensures security, high reliability, interoperability, efficient operations and agility. Great architecture matters. Possessing state-of-the-art technology can be far less important than having a well-designed IT infrastructure.
A high-performing IT organization is critical. Strong IT staff, terrific working relationships between the IT organization and the rest of the organization, robust project management capabilities, excellent support and a superb CIO are critical contributors to success.
The new era of IT potency
Providers need to make sure that they are not so focused on the immediate need to implement new applications that they neglect to strengthen their ability to effectively employ IT over the long term. Failure to strengthen structural factors means that short-term initiatives will deliver less than their potential.
Moreover, the consequences of neglect have become more pronounced in recent years.
In reviewing IT use by information-intensive industries, Andrew McAfee and Erik Brynjolfsson ("Investing in the IT That Makes a Competitive Difference," Harvard Business Review, July-August 2008) note a significant separation in the spread in the gross margin, over time, between those companies performing in the top 25 percent of their industry versus those performing in the bottom 25 percent as measured by variables such as return on capital. Beginning in the late 1990s, the gap between winners and losers was widening significantly.
The researchers made two major observations. First, IT had become sufficiently potent that its ability to advance organizational performance had become significant. The personal computers of the 1980s were important but were not powerful enough to enable one organization to significantly outperform another. However, the internet, which began to be used by business in the late 1990s, was powerful enough. Information technology had “come of age.”
Second, although potent technologies had become available, they were available to all. So why did the separation in performance occur? Why didn’t all organizations see improvement? The answer is simple: Some organizations were highly skilled at using information technology to improve competitive performance, while others were not.
The winners recognized that a good short game needs a parallel long game.
John Glaser, Ph.D., is the senior vice president of population health with Cerner in Kansas City, Missouri. He is also a regular contributor to H&HN Daily.