Question & Answer With John Haughom, M.D., Senior VP of Health Care Improvement at PeaceHealth

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PeaceHealth

John Haughom: PeaceHealth operates six regional hospitals and medical centers in Oregon, Washington, and Alaska, with operating revenues of roughly $900 million. It also has medical groups besides its regional medical centers, and pharmacies. I'm senior vice president of our Health Care Improvement Division, which includes IT and all corporate-wide quality improvement.

BJ: You were voted one of the 100 most-wired health care service providers in 2002 by Hospitals and Health Networks magazine. How was that accomplished?

JH: It's really a byproduct of how we have worked since 1993. In 1991 we engaged McKenzie Corporation, the international consulting firm, to help us determine what health care was going to look like beyond the year 2000. We called it the Mission 2000 Project. Our task was to predict and prepare for the future of health care.

We identified three strategic initiatives. First, we recognized we needed a much more integrated form of care. Second, we needed a pervasive culture of quality improvement. Third, we needed the information technology infrastructure to support the first two initiatives.

The Mission 2000 Project led to the 1993 development of our Community Health Record Project. More than an electronic medical record, this is an advanced IT infrastructure that supports a continuum of care and supplies all the advanced operational systems that we need. We didn't have very much automation in the early 1990s. However, we've been spending about between 4 and 4.25 percent of operating expenses annually on IT ever since. We have gone from almost nothing to state-of-the-art systems that support the entire corporation. There's not a doctor or an employee across the entire corporation — that's 7,000 employees and 1,200 doctors — who isn't wired into our systems.

In addition, we have a very advanced network infrastructure. Our data center supports the whole organization through highly standardized systems example, we have one electronic medical record systems, one practice management system, one financial system, et cetera. Each system supports the whole corporation. We are a heavily wired organization.

When Health Care's Most Wired award came out, we applied. We've actually won it three out of the four years; the only year we didn't win was the year I didn't apply because I was too busy. We didn't set out to win. It was simply a byproduct of where we were at the time.

BJ: Is your IT foresight reflected in cost control or other benefits that you recognize now?

JH: Yes, but it's really hard to quantify. The best example I can give is that for the last three consecutive years, we've had record profits; each year is better than the last. That's despite spending considerably more than a lot of other health care organizations on IT. I think the two are linked. I think we're experiencing the value because we supply information more effectively, which improves decision-making. However, we have found that added value is hard to quantify.

We do have isolated examples of clear one-to-one, cause and effect, where we've invested in IT, and costs have gone down as a result. We've spent a lot trying to prove our return on investment, but we run into the same problem a lot of organizations have. It's difficult to clearly link improved flow of information to increased profit. It's not that clean. Everything's too interrelated, so it's very hard to give quantifiable, discrete ROI numbers.

BJ: I've noticed that you have prescription renewal, appointment setting, specialist referrals, and disease management services all available online. What other applications are you thinking about offering online? Does PeaceHealth have a new IT system in the works?

JH: We spent the first several years putting in the infrastructure we needed to support clinical care and operations, building the network infrastructure, and the data center. It was a lot of work putting in our core transaction systems like clinical care, lab billing, practice management, and surgery scheduling systems. The entire clinical and financial infrastructure required to support day-to-day operations had to be built. We're going to be refining and improving that forever. We also built our communications infrastructure so that email and our intranet are incredibly robust. There's almost nothing that employees or physicians can't access on the intranet. It supplies a huge amount of information.

Over the last one to two years, we've had a significant shift in focus. Now we're spending a lot more time on decision support. We've got a very advanced, robust data warehouse project to create disease registries. We will have a wealth of information available for analysis, which will allow us to better understand, and improve, our business. We're also planning a real-time decision report and physician order entry.

BJ: Do supply chain and customer relations management technologies also figure in with PeaceHealth's business intelligence tools and storage?

JH: Yes. We have a supply chain management initiative related to a new 520-bed, $400 million tertiary care hospital here in Eugene.

BJ: How do you gather information to understand more about the vendors that are out there and who you want to work with?

JH: Well, that varies. I have a philosophy of success in the area of information management and IT. It should be driven completely by what you think your strategic goals and needs are. We sit down and go through an ongoing, intensive process to figure out what our key strategic goals and needs are in terms of supporting clinical care and business.

Once we define our needs, we decide which technologies meet our requirements. Next, we investigate existing technologies. Finally, we develop functional requirements and start looking at vendors.

Our approach to vendors can vary. Sometimes it's pretty clear because there are only three or four obvious big vendors. They own the market, so we'll get RFPs from them. Other times it's not that clear-cut, and we may engage a good consultant to sit down with us and figure out which vendors we should consider.

BJ: What do you think the key elements in developing a strategy to build your IT system are?

JH: Maybe the best way to explain that is to explain our last process. Every three or four years, we sit down and carefully define all of our clinical and operational needs. In fact, we just had a meeting last November. Maybe if I describe that process to you it will help you understand.

I organized a meeting that included about 75 of our key clinical and operational leaders across the corporation. We spent two days together. We went through a carefully facilitated process where we asked participants not to spend a lot of time talking about technology.

In fact, the first day we fined them. We had a facilitator at each table. If anybody talked about technology, we went around and fined them $10 per table for violations. We asked them to answer the question, 'Looking out four to five years, what do you think the key clinical and operational needs to operate our facilities are going to be?' We did not want them to think about that question in terms of technology.

Once we had them think out of the box, to define clinical and operational needs as well as they could, then we asked them to carefully go through and prioritize those needs. We usually find that once we start identifying all the needs, that we can't do it all, either because of cost or because of a lack of organizational readiness. So, we ask them to prioritize.

The output of the experience is that we determined a very robust list of key clinical and operational needs defined by all the people in the corporation that carry us into the future. Then I sat down with my team. I have about 225 people in my division, a lot of really good people. I sat down with my directors and the VPs that report to me, and we methodically worked through all of the business needs and looked for ways that technology could support them. We identified technology gaps, or places where we had to enhance the technology we had.

We didn't start with technology. We had end users define their needs. Then we asked them to define the key information elements that were necessary to support each one of those needs. That gave us a list of types of information that we had to pay attention to. That, in turn, dictates what technology we will tend to look at. From that six-month process, we got a list of technologies which we took back to end users and asked them to help us prioritize. The result was a four-year technology plan for the corporation.