Special Interview With Jim Gabler, Director of GartnerGroup''s Healthcare Industry Research and Advisory Services
Barry Jacobs: How is your "business change project" approach different
from the standard approach to implementing IT applications?
Jim
Gabler: Historically, the IS department has been the instigator of IT projects.
So, there's a tendency for the care delivery organization to blame IS when the
application isn't working.
If it's looked at as an IT project, the project is "finished" when the application is turned on. But the project was initiated for a business purpose, and that business purpose "begins" when it's turned on. Success or failure depends on effective usage, not just being turned "on." So, you have to build in an understanding that business accountabilities should be driving the project. If you're putting in a LAN to use throughout the hospital, then it's appropriate to say IS is the owner. If you're putting an emergency room (ER) application in, the ER department is the owner and thus accountable for delivering its business purpose.
By calling this a business-change project, we put the emphasis back on the business process. It puts accountability much closer to the people responsible for it after it's in use. This makes a huge difference. If there are problems with an IT project, IS will be the scapegoat. But if you can get users within departments to actively participate in the implementation project, they have a much harder time finding fault with its operation later — they've invested part of themselves in it and finding fault means pointing a finger at themselves.
BJ: What are the key steps to establishing an IT plan for a care-delivery organization, and how can you get non-IS departments invested in spending limited bandwidth and dollars on IT?
JG: Most IS departments are very proud of what they call their "IS strategic plan." But Gartner maintains that there should be one strategic plan: the one for the organization. All other plans are really tactical plans in support of the master strategic plan. Now, tactical plans themselves have strategies in them, but when you start calling a tactical support plan a "strategic plan," it tends to take on a life of it's own — and the two plans must then be kept aligned.
Executive strategy should be to evaluate and monitor user-readiness to accept accountability as a key indicator that the organization will realize the expected value from the project.
There are five factors for evaluating user "accountability readiness." The first is how well end-users and their managers articulate the business issues driving the project. An example is a voice recognition project for radiology reports. The business issue is that the radiology department needs to decrease their costs to perform their tasks. One way to do so is to reduce the number people required, provided that the offsetting transitional and operational costs are less over a reasonable time frame.
The second factor is how well the users describe how the proposed project addresses those business issues. Continuing our radiology example, a voice-recognition application could reduce the number of transcriptionists required to perform the same or increased workload.
The third factor is to describe the expected business results in easily observable terms. Using our example, the expected business results may be as simple as needing three fewer transcriptionists — a simple, easy to track metric.
The fourth factor is how well users describe the limits of the proposed tool. Most people can be very positive about something they want to do, but are they equally aware of its weaknesses? To follow through on the transcription example, we know voice recognition is not 100 percent accurate. There would still be a need for transcriptionists to validate the automated activities. Describing weaknesses is not necessarily negative since applications are not perfect, but knowing weak spots and how they can be compensated for is a strong indicator that an application is well understood, and a solid effort has been made to fit the tool to their usage.
The fifth factor is how well end-users and their managers describe the preceding factors in their own terms. What I mean is, if they're making their argument and they sound like a vendor salesperson or an IS person, then they're only echoing someone else. Our backgrounds and personalities should come out in the things we believe in. So, the fact that the four previous factors would be described with the style that users and managers would typically use tells me that they've internalized it.
BJ: If an organization has limited IT dollars, where's the smartest place to put those dollars, and how can a CEO figure out how much is enough?
JG: It's hard to give specific numbers. Let me express it another way. Two things are always true in health care. One is that there's no money. The other is that if the CEO wants it, there is money. That sounds contradictory, but if the decision-making executives can see business value, they don't usually have a problem spending available funds. However, decisions are not based on quantitative ROI or cost-benefit measures as much as on subjective perceptions of realizable business impact.
BJ: What about ROI for the average hospital facility on IT investments?
JG:First, there are very few situations that you can pull off the shelf to show that somebody has documented the ROI achieved.
Second, even when someone has documentation, they aren't always believed. It's funny how somebody can pull up an ROI for a patient financial application and say, here's what your return will be, and that will very credible to the CFO and the CEO. But do the same thing with a clinical application, and they'll say, our doctors won't do that.
They don't want to spend unless they know absolutely that it's going to pay for itself in their environment. They have more confidence in the billing applications, and there is an aspect of truth in that confidence. The billing people are typically employees of the care delivery organization, unless they've been outsourced, but most physicians are not employees. Most physicians are independent businesses in the community that use the hospital for their acute patients. As a result, community doctors can say I don't like the restrictions your hospital is requiring of me, so I'm going to stop sending patients to you; I'm going to send them to a competitor's hospital that doesn't make me do that.
BJ: So you're talking fundamentally about politics as a barrier to adoption?
JG: I think it's even stronger than politics since it also has real business impacts, although "politics" is probably the best term to use. The business impacts may not be exactly quantifiable, but they are real.
The mayor of a town doesn't run individual businesses; but the city sets up the codes for usage; they've set limits on how wide and how long my vehicle can be if I want to use their roads. The CEO of a hospital is more like the mayor of a city than he is like the CEO of most companies.
In a hospital, for example, over 50 percent of employees are nurses. Most nurses have, at minimum, a bachelor's degree. Then there are ancillary M.D.s, so you're dealing with a very highly educated workforce; that's number one.
Number two, the radiologists, pathologists, and nurses all have their own professional groups. They go to conferences that reinforce their professional views of their individual areas in order to continuously improve their delivery of care. As a result, a care delivery organization has much more similarity to a city than to a typical business in the sense that everybody is unified around caring for the patient, but their functional roles are somewhat independent of other's roles.
Since most doctors in a community "bring" their patients to the hospital, one of the primary concerns of the CEO is to make sure that they don't offend their affiliated doctor "customers." They want to keep doctors happy so they won't take their patients elsewhere. Again, hospitals are more like cities than companies.
Or consider shopping in a department store like Nordstrom — you pick something out, you pay for it, and you take it home. But in health care, you can't admit yourself to a hospital, only a doctor can. The doctor picks out your "care," you receive it, and the insurance company pays for it. Normal feedback mechanisms between the three roles do not exist. At Nordstrom, there's a check and balance: you probably could not pay for all the items at Nordstrom that you would like to have.
Also, in health care there's a certain amount of negotiation that goes on between the care delivery organization and the insurance carrier as to exactly what the insurance carrier is going to pay. That's like Nordstrom selling you a suit without being sure how much money they're actually going to get later from your payer. Nordstrom would find it difficult to stay in business with such a system.
BJ: Do you see changes for care delivery organizations five years down the road?
JG: Health care will become more business-like. Let me give you an example of a common past occurrence: A hospital wants to build a ER in a community where there are only two hospitals. The other hospital built a new ER and its occupancy increased. The first hospital believed that by building a new ER, their occupancy would also increase.
In health care, there has been a sort of a lemming approach. If my competitor does something, I've got to do it too or I will lose market share. Or, this worked for a friend's hospital, so if we do it here first we gain a competitive advantage. Conversely, if we don't have to do it right now or we are the first anywhere to try this, we cannot afford to risk our limited funds.
Fortunately we are seeing a more business-like attitude among hospital executives. Decisions are being increasingly based on tangible business impact and less on what others are doing. This will make it even more critical that investments in business change projects be directly linked to the accountability of its operational users to ensure that the expected business value is consistently realized. That's a true business environment.
