final report - industry research: health care delivery

IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery

Hospitals/ Healthcare Delivery – Group 3

Final Project Report: IST 700


Table of Contents

I. Overview…………………………………………………………….3

II. Analysis………………………………………………………………6

III. Discussion…………………………………………………………...14

IV. Challenges…………………………………………………………..22

V. Recommendations………………………………………………….25

VI. Lessons Learned……………………………………………………37

VII. Bibliography……………………………………………………….38


Overview

The hospitals industry includes firms licensed as general medical and surgical

hospitals that provide surgical and nonsurgical diagnostic and medical treatment to

inpatients with medical conditions. Hospitals maintain inpatient beds and usually

provide other services such as outpatient services, operating room services and

pharmacy services. The industry excludes psychiatric and other specialty hospitals.

The hospitals industry is a huge industry that is made up of total annual revenues of

$757b, with total profits of $18.2b in 2011 (Snyder, 2011). The annual growth for the

hospital industry from 2006-2011 was 2.9%, which is really good because it withstood

the recession. This number is projected to increase to 4.1% between 2011-2016, which

will help revenues reach a total of $923.7b (Snyder, 2011).

As you can see, the size of the hospitals industry is huge, with total revenues

reaching $757b. A peculiar issue is that even though with such high revenues, the

hospitals industry profit margin is extremely slim with total profits of only $18.2b in

2011. This shows us that the hospitals industry has very high expenses, which would

explain the slim profit margin. Total wages amount to a total of $290.9b in 2011,

which shows us that wages roughly account for 38.4% of the total revenue (Snyder,

2011).


Economic Troubles

The recession in 2008 and 2009 only managed to moderately dampen industry sales.

During this said recession, there were fewer people with health insurance coverage,

which led to a lower demand for healthcare. However, hospitals treated more

uninsured and Medicaid patients in Emergency Rooms (ERs). The total number of

insured patients in hospitals room shrank during this period, which explains the

declining profit margin.

Another problem that hospitals face is the shortage of employable persons. Hospitals

struggle to recruit and retain qualified personnel because of insufficient and costly

education programs. As a result, wages as a percentage of revenue have risen,

resulting in a total of 38.4% of revenues going to payroll expenses. This trend in

wages is forecast to continue and grow more severe during the next five years, which

may lead to a higher proportion of revenue being set aside for wages. This makes it

very important for IT to be improved in the industry, in order to help make work

processes more efficient. This would allow hospitals to see more patients, while

spending less time, thus, helping revenues to grow, while keeping wages low with

lower billable hours.

Consolidation

One thing hospitals are doing to counter high costs, is consolidating. This enables

them to have better negotiating power with suppliers and payers. Most operators

are also starting to close underperforming hospitals. During 2006-2011, hospital

locations were expected to decline at an average of 3.5% per year to a total number


of 4833 hospitals nationwide (Snyder, 2011). Consolidation is also happening to

counter heightened competition from other healthcare providers. Consolidation is

going to be a huge factor when IT comes into play, there will be needs for project

management as hospitals are so fragmented with so many departments, and

consolidation will require data to be standardized, merged, and also secured to make

it accessible to the different hospitals that are now consolidated.

Technology developments influence hospital efficiency. For example, computerized

systems help with patient management and record keeping, and an extensive range

of medical equipment enable tests to be performed quickly and treatment to be

delivered more accurately.

Policies and Grants

Hospitals can register and receive information technology incentive payments under

the Medicare and Medicaid programs. In 2011, hospitals have scrambled to implement

and meaningfully use EHRs to qualify for Stage 1 federal clinical information

technology incentive payments under the American Recovery and Reinvestment Act

(ARRA). The Act will provide $27b in payments over the life of the multiyear

information technology incentive program (Snyder, 2011). The share of hospitals with

a basic or a comprehensive EHR was 11.9% in 2009, but only 2.0% reported having EHR

systems that allowed them to meet the federal government’s meaningful-use

criteria. The researchers also found a widening IT divide opening between the digital

haves and have-nots in this country.


The Health Information Technology Economic and Clinical Health Act, part of the

American Recovery and Reinvestment Act of 2009, calls for hospitals to create

electronic health record (EHR) for every American by 2014. The funding is expected

to range between $9.7 billion and $27.4 billion and will be distributed over 10 years

(Snyder, 2011). Hospitals that fail to comply by 2015 stand to lose 1% of their Medicare

reimbursements. Almost $20 million in new technical support assistance provided by

the federal government will help critical access and rural hospital facilities convert

from paper-based medical records to certified EHR technology.

For our project purposes we interviewed two professionals from two healthcare

facilities i.e. Upstate Hospital, Syracuse and St. Jose Hospital in Syracuse. Below are

the names and designations of the two personnel.

Susan Berry – Program Manager, Upstate Hospital, Syracuse, NY

Tom Haskel – Manager, Information Services, St. Joseph’s Hospital, Syracuse, NY


Analysis

IT and Business Strategy Alignment

The information systems currently utilized by the health care organizations generally

fall into three main areas: transaction processing systems, management information

systems, and decision support systems (DSSs). The healthcare IT projects typically

comprise of new implementations or introducing reforms to the current IT portfolio.

Typically in the healthcare industry IT has been treated as an expense rather than an

enabler for enhancing business value. The below diagram is a holistic view of the

context of IT projects in healthcare. As we can see there are few factors that

influence the IT projects in healthcare.

This figure is adopted from “Why Have a Project Management Methodology in Healthcare” and “How to Deliver Successful Projects”, A deliverable of the HIMSS Project Management Task Force January 7, 2008


Electronic Transactions

A lot of electronic data is shared across multiple entities in the healthcare industry.

One of the important trends is to move toward a universal electronic patient record.

It could be defined as electronically stored health information about one individual

uniquely identified by an identifier. This entails capturing, storing, retrieving,

transmitting and manipulating patient-specific health care-related data, including

clinical, administrative, and biographical data. All the electronic transactions are

subject to the HIPAA (The Healthcare Insurance Portability and Accountability Act) of

1996 when electronically conducting certain health care administrative transactions,

such as claims, remittance, eligibility, and claims status requests and responses.

Examples of electronic transactions include submitting claims that need to adhere to

the newly defined standards (Versions 5010, D.0 and 3.0). Electronic transactions also

include sharing of large patient files across the organization for reference purposes.

Following two major IT systems are being implemented industry wide. The hospitals

are implementing these IT systems in order to qualify for the Meaningful Use Grant

Following two major IT systems are being implemented industry wide. The hospitals

are implementing these IT systems in order to qualify for the Meaningful Use Grant.

Electronic Health Record (EHR)

In general, technology advances allow the industry to streamline care, reduce fraud

and reduce medical errors. Specifically, electronic health records (EHRs), systems

that integrate electronically originated and maintained patient-level clinical health

information, have been a major and ongoing development in the industry. EHRs can


combine information derived from multiple sources into one point of access. An EHR

can replace the paper medical record as the primary source of patient information.

The use of EHRs is growing, albeit as a slow pace. A survey from the American

Hospital Association found that 69% of reporting hospitals have either fully or partly

implemented an EHR (Snyder, 2011). Larger hospitals, those in urban areas and

teaching hospitals are more likely to be among those with implemented EHRs.

Clinical guidelines for disease management have a demonstrated benefit when

accessible within the electronic record during the process of treating the patient. A

2005 report noted that medical practices in the United States are encountering

barriers to adopting an EHR system, such as training, costs and complexity, but the

adoption rate continues to rise.

With individual computerized patient systems, the next question is how to

implement medical information systems at different sites and how to connect the

networks, allowing users in multiple sites to access the systems.

Computerized Provider (Physician) Order Entry (CPOE)

Computerized provider order entry (CPOE), formerly called Computer physician order

entry, can reduce total medication error rates by 80% and adverse errors by 55%. In

addition to electronic prescribing, a standardized bar code system for dispensing

drugs could prevent a quarter of drug errors. Consumer information about the risks

of the drugs and improved drug packaging (clear labels, avoiding similar drug names

and dosage reminders) are other error-proofing measures. Interoperable HIT will

improve individual patient care, but it will also bring many public health benefits

http://entry/

http://entry/

http://en.wikipedia.org/wiki/Bar_code


including: Early detection of infectious disease outbreaks around the country;

improved tracking of chronic disease management; and evaluation of health care

based on value enabled by the collection of de-identified price and quality

information that can be compared. The industry-wide adoption of electronic health

records (EHRs) will amplify these benefits. Prescribing errors are the largest

identified source of preventable errors in hospitals. Medicare now offers financial

incentives to providers for e-prescribing (PwC).

Privacy and Security

The total economic burden created by data breaches in the health care industry is

nearly $ 6 Billion annually. The healthcare industry faces significant challenges for

preventing data frauds and thefts. Sensitive data such as SSNs, insurance

identification numbers, payment information, and medical provider identification

numbers enables criminals to file fraudulent claims that often go undetected for long

periods of time (Deloitte, 2011). Electronic health records and their exchange provide

a convenient and efficient healthcare information utility but it brings with itself

greater data risks.

National and Local Politics

Hospitals are non-profit and hence they are a heavily audited industry. Some

organizations have a “non for Profit” mindset and do not view themselves as a

business. This can be a hindrance to their growth in the highly competitive hospital

industry. Even though St Jose is a “non for Profit” hospital with a “For Profit wing”

under which they provide homecare services and management services like


secretaries, payroll, accounting to Physician’s offices, they still have a “non for Profit”

mindset. Heath care in the United States comprises a complex web of decisions made

by various institutions and political actors across a broad spectrum of public and

private sectors. These institutions and actors include federal, state and local

governments in the public sector. In the private sector they include healthcare

providers such as hospitals and nursing homes; health care professionals and

healthcare purchasers such as insurance companies industries and consumers. A

wide variety of interest groups influence and shape health care politics and

policymaking. The Political environment of the country also affects the healthcare

industry as it is a highly regulated industry. Certain regulatory requirements may

change that may lead to either changing project priorities or even discarding certain

projects that have a lot of money, time and effort invested in it. The health care

industry is driven by regulations by many regulating bodies such as the department

of health and the joint commission.

Following regulations are prevalent in the Health care industry

a. HITECH Act: The Health Information Technology for Economic and Clinical

Health (HITECH) Act, enacted as part of the American Recovery and

Reinvestment Act of 2009, was signed into law on February 17, 2009, to

promote the adoption and meaningful use of health information technology.

Subtitle D of the HITECH Act addresses the privacy and security concerns

associated with the electronic transmission of health information, in part,


through several provisions that strengthen the civil and criminal enforcement

of the HIPAA rules.

b. Meaningful use: It monetary incentive offered by the government to the

hospitals to adopt EHR (Electronic Health Records) and CPOE (Computerized

Physician order entry).

c. Accountable Care Organizations – The affordable care act commonly known

as health reform law. It is geared towards preventing illness by improving

healthcare quality.

d. Any new regulation like ICD 10. That takes priority over every other project.

e. RHIO: Regional Health Information Organization. They capture Patient

Demographics, Lab results and Radiology results

Technical Infrastructure

Technical Infrastructure refers to the network backbone that connects the systems

used across the healthcare facility. Infrastructure improvements are often considered

secondary when it comes to the healthcare delivery industry (InformationWeek, Mar

2012). Along with the software part of the systems for example Electronic Health

Records (EHR’s) it is necessary to maintain a good support on the network

infrastructure in order to derive the benefits of the deployed software. Roughly 8 out

of 10 health IT executives admit that they have added server, storage, or network

program technology after the fact--in other words, after implementing EHRs and

other health information technology systems, according to a new poll (Lewis, 2012).

According to a survey conducted by CDW Healthcare lack of proper infrastructure

http://www.cdwg.com/healthcare.aspx


supporting the healthcare IT systems lessens the quality of these systems. There

needs to exist a balance between the systems such as EHR’s and the infrastructure

(storage, servers) that supports them. As an IT project manager, it is necessary to

have a certain amount of control over these factors considering their dependency.

This balance needs to be monitored on regular basis in order to avoid any

unexpected problems. Irrespective of a hospital implementing one of the best

healthcare systems, the advantages derived from them would not be sustainable if

there is a loose network infrastructure in place.

Return of Investment (ROI)

As an IT project manager, it is would be necessary to liaise with the stakeholders and

monitor the financial gains that are incurred as a result of implementing the

healthcare system. The role of key performance indicators is crucial here. When a

hospital or a healthcare facility implements a system, it is intended to cater to certain

goals and bridge some gaps that persist in their current system. It is the responsibility

of the project manager to make a note of these goals and then come up with

appropriate metrics or key performance indicators on which the Return of

Investment (ROI) would be based upon.

Informatics

Informatics blankets a wide range of technological benefits that hospitals are trying

to derive from to enhance their operational efficiencies and patient care. As

mentioned earlier that healthcare providers are in the nascent stages of

technological and data evolution. Another challenge lies in taking full advantage from


the Business Intelligence solutions in healthcare. Healthcare organizations tend to be

agglomerations of independently run units. Data comes from a variety of sources and

is difficult to integrate. Data consistency and quality varies and is a key factor holding

back use of BI and analytics (Stodder, 2011). In the future, BI and analytics will have

more impact on clinical decision-making. Healthcare providers will be able to analyze

treatment outcomes based on who provided them, what treatment options were

chosen and where they were administered, among other factors. They’ll be able to

look at what they spent on personnel and other resources and see how those

decisions affected patient outcomes.

IT systems Supplier Power

There are only 2-3 major healthcare IT systems in the market. That leads to a very high

supplier power. Upstate university hospital has “Envision” (they are now switching

to Epic) and St.Jose’s has Mckinsey.

There are three main vendors in the industry:

1. McKinsey – A Hospital can buy an IT system from them and integrate it with their

current IT systems.

2. Epic- The hospital has to use only their products. They cannot integrate an Epic IT

system with their current IT systems. They do not have much power as a client when

it comes to Epic.

3. All Strips-They are a big company and they buy small companies. They do not have

a lot of in house development. Instead they take over smaller companies that make

IT systems for healthcare.


Discussion

Today, information technology is considered not just a supporting tool but a

“strategic necessity” by world class organizations. As competition increases, the use

of more sophisticated information technology tools and techniques is essential in

order for organizations to obtain a competitive advantage. In our research we found

that there is usually no formal process to capture and document Best practices.

St Jose’s aspires to be a network of services instead of just a hospital i.e. an

organization in which all the departments are united and offer same level of care.

They want to be able to establish how much does it cost to treat a patient

throughout the entire network of services. They really want to be an accountable

care organization and build a long lasting relationship with their patients. They plan

to build such an IT infrastructure that enables St Jose’s to be able to deliver such a

service. Project Management is almost non-existent. They have no formal Project

management. The vendors come in and bring their own project managers to manage

the project. Thus, it is basically vendor’s responsibility to run the project. They create

the Project plan, conduct weekly status meetings and assign resources. The IT team

and the Business Analysts (BA’s) are responsible to get the internal team for testing

and develop a testing interface if required. The approach is significantly ad-hoc and

driven by need rather than a vision. Tom Haskell feels that they would really benefit

from a PMO office hospital wide. (Haskel, 2012). People do not see the time and

resources that go into a project. They do not assign cost to that. Systems that they

develop internally are not made visible. No-one accounts for the effort gone into it.


(Haskel, 2012). Scope creep is huge, they have major issues in requirements gathering

and developing acceptance criteria that is signed by all the stakeholders. The IT team

at St Jose’s aspires to use Project Management to manage the expectation of the

customer (stakeholders). Change management is one of the biggest priorities.

The IT team is very small but growing aggressively. They have doubled in past two

years. They are weak on documentation and communication. They are expected to

support the entire organization including the off-site facilities like surgery centers,

Physician’s offices, North medical center etc. There are a number of assorted systems

and they are looking to replacing all those assorted system with one system.

Departments usually work as silo’s than as a team. There is considerable resistance to

accepting the new IT systems. Communication with these departments becomes a

challenge as they do not have a business process tying them together. If a group of

departments are tied through a business process, they communicate very well with

each other as far as patient is concerned but there are still some things that are very

silo. (Haskel, 2012)

At Upstate Best practices are only captured around software applications for the

Clinicians. They have a best practices advisory board to provide decision support to

the clinicians. This applicable to the “clinical advise” being entered into the system.

For example, a certain drug is prescribed in combination with another given drug. Or

a given drug is usually prescribed a certain dose (Berry, 2012).


At Upstate they do not formally capture Best Practices but they capture positive and

negative lessons learned for every project. These lessons learned could be on any

topic. For example

How to manage stakeholders,

What could have been done better in terms of communication or training.

These lessons learned are mostly captured on excel sheets. As an informal Best

practice, these are captured from each committee engaged in the project. The

project managers are trained to draw out the lessons learned from each committee.

The lessons learned are categorized into following 3 major categories

Executive steering committee lessons learned

End user’s lessons learned

IT lessons learned

They ask general questions such as:

1. In your opinion what was done well

2. What can be improved and how?

IT Projects (Upstate Hospital):

Bar-coded Medicine system: In implementation the IT department personnel

followed the nurses around as they gave out medication to capture the

information to be entered into the system.

“My Chart”: Upstate has a web portal called “My Chart”. The patient can log

in sand see their lab results. They can also schedule an appointment with their


doctor and email their physician directly. This has allowed upstate to integrate

patient information as a complete picture.

Bar-coding: They have IT systems to barcode the

Patient

Medication being given to the patient. Along with dosage and other

information

Clinical staff servicing the patient. The staff is required to sign off on the

patient.

Data Mining: They have a data warehouse and a whole department for

decision support. They use Business Objects and have a whole team only

responsible for reporting.

Telemedicine: Upstate hospital is very big on Telemedicine. They use it to

collaborate with other doctors and to give physicians an opportunity to

monitor and connect with their patients remotely.

CRM Welcome Kiosks: They have welcome kiosks to allow patients to sign in,

check their balance and pay their co-pay.

Social Media: They have a face book page to promote the hospital.

Cifer Health: It is a post discharge automatic phone call that’s asks the patient

of they would like to be called back. If they choose ‘Yes’ they called back on

the same day through the call center. This has been a major success at the

Upstate.


In House software: Upstate has home grown software for things that are not

mission-critical like Human Resource software, student and employee health.

Today, information technology is considered not just a supporting tool but a

“strategic necessity” by world class organizations. As competition increases, the use

of more sophisticated information technology tools and techniques is essential in

order for organizations to obtain a competitive advantage. The information systems

currently utilized by the health care organizations generally fall into three main areas:

transaction processing systems, management information systems, and decision

support systems (DSSs). One of the important trends is to move toward a universal

electronic patient record. It could be defined as electronically stored health

information about one individual uniquely identified by an identifier. This entails

capturing, storing, retrieving, transmitting and manipulating patient-specific health

care-related data, including clinical, administrative, and biographical data.

Project Management in Healthcare IT Sector:

It is very mission critical from the clinical systems standpoint but also from billing,

financial systems and admissions point of view. There is an increasing dependency on

IT today and it is steadily increasing. A lot of projects that are strategic for the

hospital involve technology. General departments in the hospitals are not trained to

do strategic analysis. That is when Project Managers are involved as such projects

require extensive analysis. Project management is involved to some degree in all

parts of the organization.


At Upstate university hospital, Project Managers are often approached when a

department is trying to build an ancillary application or a system to ensure that the

system is able to talk to the central interface engine. (Berry, 2012)The project may not

get approved if system integration is more cumbersome than the actual

implementation of the ancillary system. This project may also get rejected if it is not

within the strategic plan or if the IT department does not have resources available.

Culture:

The executive board lack an understanding of the change management and

organization cultural issues, the role of business analysts is either absent or is merely

to document things. They expect the project to turn around very quickly as they have

made the financial investment. They do not understand the intricacies involved in

implementing a successful project. Everyone is extremely busy. They just want the

project done. According to them it does not have to be perfect. Getting time from

the stakeholders is one of the major constraints.

At Upstate they usually require the PM to submit very detailed reports in terms of

hours of manpower and level of effort required when asking for an extension on a

project.

IT does everything auto magically:

Users either reject the new IT system or blindly depend upon it. They forget that the

new system is merely a tool to assist them but they do have to continue to do the

assigned tasks very intelligently. Some users expect the IT to speed up their work or

reduce the effort required. This may not be the case at all sometimes. There will be


certain other reasons for the adoption of an IT system but it may not necessarily

reduce the time or effort for the user. In some cases, it may even increase the time

required. For example, in a CPOE (Computerized Physician Order Entry) it may take

the user more time to enter the order instead of just writing it on the paper. But

CPOE has many other advantages long with being much safer. Technology may

introduce new sources of error. Technologically induced errors are significant and

increasingly more evident in care delivery systems. Terms to describe this new area of

error production include the label technological iatrogenesis for the process and e-

iatrogenic for the individual error.

Fragmented Industry:

Different departments in the hospital have the tendency to work in Silos. They have a

certain budget approved and they often build their own access databases or go and

buy applications and implement them. However, these applications are brought to

Project managers when they either breakdown or if they need to be integrated with

the central system. The Project Managers are often not involved from planning

phase. This leads to limited opportunity to improve the quality of the project.

Upstate has one repository for Patient demographics, billings and lifetime clinical

record. It is housed in their vendor system. But they have other departments that

house their own data. Each of these local systems has been implemented using

different technologies. Hence, this leads to integration issues within the

organization. In Upstate and at St Jose’s EHR Electronic Health Records has been


implemented, but there are multiple EHR Electronic Health Records each with

different IDs for a patient.

Upstate is currently moving to Epic’s IT system. This will allow them to have a single

database. This in turn would lead to better inter-departmental communication and

generation of orders for different services. The IT department is also fragmented

with different types of teams such as networking team, developers and project

managers.

Staff iteration is another commonly faced issue. IT staff and clinical staff are typically

stretched very thin. The staff works under very high stress. And they have to be

certified at regular period of intervals. The fragmented organizational culture that

encourages departments to work in silos also adds to this issue and creates

bottlenecks or dead ends. People who really know a system(s) sometimes leave or

get sick. Today this issue is handled at Upstate by cross training people. There are at

least 2 people who are cross trained for a certain job profile.


CHALLENGES

Healthcare delivery systems are considered to be in an evolving state as far as use of

IT is concerned as they attempt to provide a full continuum of services in a user-

friendly, one-stop-shopping environment that eliminates costly intermediaries,

promotes wellness, and improves health outcomes. The proponents of IT feel that IT

can help improve strong physician-hospital links, coordinated systems of care,

geographic reach, quality management, contractual capabilities, utilization controls,

financial strength, organized oversight and economies of scale. But large size of

organizations, the geographical distances and structural differences among

components, and the differences in services and staff involved create formidable

challenges to those responsible for installing IT solutions and software. The financial

performance of hospitals affiliated with systems suggests only small gains in many

instances.

Some of the challenges faced by IT Project Managers and PMO (Project Management

Office) as regards to IT in healthcare are as follows:

Choosing the right technology: It is very important for PMO to choose the right

technology which aligns with the business initiatives.

Finding skilled IT personnel: Studies have shown the demand for consultants is at an

all-time high, which is due in part to the rapid growth of the industry. For example,

the EHR market is projected to grow from $973 million in 2009 to $6.5 billion in 2012.

A report from CHIME (College of Healthcare Information Management Executives)

also found IT staffing shortages were putting projects at risk, and it noted a project


shortage of 50,000 qualified IT personnel in the next two years (McNickle, 10 IT

challenges for physician practices in 2012, 2011). The CHIME survey found that out of

CIOs looking for personnel, 71 percent said they had open positions in clinical

software implementation and support. So it is important for PMOs to encourage

rapid hiring in IT. (McNickle, 10 IT challenges for physician practices in 2012, 2011).

Gain internal alignment: PMO should strive to achieve internal alignment by having

good budgeting processes in place and good relationships with their internal clients

or users, like doctors and nurses who need services from IT. Failing to maintain

internal alignment, makes it easy for vendors to approach specific departments and

throw off an organization's budget year. They approach hospitals or physician groups

and get those wanting solutions that may be overlapping with something the IT

department already has on its strategic plan. So project managers should be wary of

such a situation. (McNickle, 5 things CFOs need to communicate to CIOs to prevent

overspending, 2012)

Benchmarking the spending: PMO should take efforts to benchmark everything from

salaries of IT personnel to expenses incurred on IT products.


This figure is adopted from “A CIO’s Guide to Healthcare IT Compliance without Overspending” by www.npifinancial.com

This helps companies drive more savings, even more than they realize, because they

are paying too much. Effective spend management incorporates risk management to

forecast the actual spend and cross reference it with the budget to avoid financial

surprises at the crucial stages of the project.

Competition will lead health care organizations, and their associations, to the

opportunities presented by information technology. How well a provider approaches

this challenge, from a strategic planning and implementation standpoint, will spell

the difference between success and failure in taking advantage of these

opportunities.

http://www.npifinancial.com/


RECOMMENDATIONS

Product-Based Approach:

According to Professor Gary Hamel, "Competition today is not between different

Products - It's between different business models". The general tendency of the

hospitals today is to be a COE-center of excellence for something. They could be a

center for stroke or breast care, any other kind of other service. They think “Product

Based” and project management can help identify opportunities for business model

innovations and their implementation.

Less Mature organizations like St Jose’s hospital can benefit from heavy project

management methodologies and a PMO office as they need a set structure for

Project management. We recommend the following for St Jose’s hospital:

o Convince - centralized approach for PM is required

o Clarify roles and authority - facilitate better decision making

o Hire Certified PM-Services of a trained Project Manager should be

offered to clinical and business units to facilitate training and to build

structure. Conduct Training

o Define Critical success factors and Key Performance Indicators

o Develop acceptance criteria to manage scope creep

o Value driven PM

For more mature organizations like Upstate we recommend them to experiment

with the traditional model of PMO and explore “Agile project management” and

maybe create a new and a more flexible PMO structure that is suited to the unique


needs of the healthcare industry. Following are our recommendations for a mature

organization:

o Develop sustainable and flexible project management methodologies

o Achieve vertical and Horizontal integration and develop new business

models

o Capture Best Practices

o CDI-Customer Delight Index for Projects

o Earned Value Management

o Auditing and benchmarking, Change and Risk Management

The focus on IT Project Management in terms of the Quality across the healthcare

industry as a whole is minimal. Quality at Upstate is more focused around patient

care. They work with Press Ganey, a performance excellence consulting firm to

improve their clinical and business outcomes. They do not have quality management

component of project management that we read about. According to Kerzner’s

model of PM Excellence, TQM (Total Quality Management) is an important quotient

of the ‘Integrated Processes’. Hospitals should learn that project management

principles can be used to support and administer TQM programs in the facility. This

would primarily be targeted towards the operations functions in the healthcare

facility.

Research is needed to better document and understand the link between IT and

quality, including the types of quality problems information technology can be used

to solve and implementation strategies to ensure that quality objectives are met.


Hospitals must consider both financial return on investment and nonfinancial

benefits when making IT investment decisions. The costs of CPOE and EHR can be

difficult to measure because they require investment not only in the technologies

themselves, but also in changing work processes, significant staff training, and

ongoing system support. Thus in order to gain complete advantage of these

technological and non-technological investments, there is a need to effectively

govern these parameters so that measureable progress can be made in the IT

projects which is why project management plays an important role.

Recommendations for a PMO

There is too much disparity between "types" of projects and the implementation

methodology and structure each project receives. It's quite interesting, actually, how

the same resources (people) are coordinated for varying projects that fall under

different "sponsors". It just makes sense to streamline this by implementing a PMO.

This way you get standardization, planning, resource tracking, communication

channels and most importantly, the organization quits operating out of individual

silos. The real question here is: How do you propose the idea of a PMO, centralized in

IT with the idea of project management methodology in a healthcare facility?

The best way to propose a PMO is to not propose a PMO at all. For one, most PMO

proposals to management often fall upon deaf ears or ears pained by the noise of

change of any kind. But the key point is that a PMO is an enabler to achieve an

objective, not the objective itself. As a first step, one approach would be to focus the

proposal not on the need for a PMO, but instead on the need and opportunity for


improvement. Treat this like any project effort. After establishing goals, objectives,

and a high level overview of requirements, put forth a few options and pro forma

business case assessments for management such as

1) Do nothing, 2) Implement a PMO, 3) Implement a "virtual PMO", 4) Implement a

PM quality circle, etc.

For many organizations, if management is truly committed to improvement, a great

deal can be accomplished with minimal cost and organizational impact simply by

empowering a talented and energetic IT PM to set up a "virtual" PMO or head a PM

quality circle to "get done" all of those things you mentioned. And based upon value,

adoption, and ongoing maturity this can easily and predictably evolve into a full PMO

- via the request of the users and thinking of management (not those who want to

manage or be in the PMO. Another good reason for this approach is that if

management is not committed or if the organization is just not at the right maturity

level, then proposing or pushing the PMO will likely fail. Conversely, if they are ready,

then there is no need to push it through.

According to Kerzner, one of the best practices for a healthcare PMO would be

structuring all projects in a consistent manner with a core methodology in place (that

is required to be adhered to). From our interviews with the Upstate, we discovered

that in its case having a PMO and predefined methodology would not be a much

help. But as the recommendation says that there can definitely be a core

methodology which would be a small static part to have some degree of governance

in place. Apart from this, hospitals like Upstate can enjoy a dynamic methodology


that can be devised over this static part that would give the project managers the

required flexibility due to the fragmented nature of the projects.

For healthcare IT projects or programs it is important to have a project formalized

with the proper initiation and closing presentations. This is crucial success factor that

is necessary to make measureable progress in a more disciplined manner rather than

any ad-hoc manner. In case of St. Jose hospital, from our interviews we discovered

that there is a need for this approach taking into consideration their relatively

unstructured way of executing projects. One of the challenges that we discovered

through our interviews is the stakeholder resistance that the project managers for

the IT initiatives. It is the responsibility of the project manager or PMO to come up

with action plans that would encourage stakeholder participation since the actual

benefits of the projects are only derived when the stakeholders, in this case clinicians

and executives get to speed using the systems. The sooner the stakeholders get

involved, it is beneficial in identifying the hidden issues that can create operational

blocks and can be addressed at the initial phase itself rather than the issues

cascading and forming a bigger issue at a later stage. As a part of reducing the digital

divide and ensuring stakeholder participation, it is important that the experienced

clinical representatives issue a scoring/rating for the projects on regular basis that

would supplement the project prioritization.

Project Metrics that can be assessed by the stakeholders are of prime importance to

monitor the project or program condition. As discussed earlier, the project manager

or the PMO members need to be proficient with the hospital industry and it is


prerogative for them to be abreast with the domain. Using this knowledge and their

experience they should come up with detailed project metrics that is specific to their

healthcare facility. The business analysts will play an important role here assisting the

project managers with formulating the metrics. These metrics should be made

available and accessible to the crucial stakeholders in the facility.

Portfolio Management:

In case of the mature organizations, like Upstate, project management and program

management can be effectively carried out using Portfolio Management. Portfolio

management is a business function that is designed to support the successful

planning and execution of the strategic objectives of the business. Regardless of its

name, effective and comprehensive portfolio management is implemented at an

organizational level and across an organizational scope where decisions about the

best use of resources—human, financial, facilities, and others— are made (Solak &

Pickens). One of the challenges organizations face while defining and implementing

Portfolio Management is differentiating between the initiatives that are managed by

the PMO and those which are not.

In the case of a mid-size healthcare delivery organization trying to implement an EHR

at multiple facilities, greater success is achieved when a PMO implementation team

works with the leadership and critical resource managers at each facility to plan and

execute that facility’s rollout. In these cases, EMR standards are implemented

consistently across all facilities, while the benefits for front-line service and care

delivery at each facility are optimized.


The objective behind implementing Portfolio Management in a hospital or healthcare

facility is to increase the overall operational efficiency and supporting the

organization in meeting its strategic long term and short term goals. Essential

portfolio management activities in healthcare industry include:

• Opportunity identification

- It is the process in which organizations assess their current business practices

and identify opportunities to improve them that would better support the

overall strategic objectives. The project manager would then analyze the

technical and functional feasibilities and further work with the IT team to

support the executive’s efforts who is the business process owner.

• ROI forecasting and value definition

- IT penetration in healthcare industry being in early stages implies that the

number of skilled personnel who are well versed with the industry and its IT

side are relatively less. In many healthcare organizations, many managers are

competing for limited resources for their own parochial needs without

sufficient regard for the strategic needs of the overall enterprise (Solak &

Pickens). ROI forecasting and value definition is going one level ahead of

defining the project or program details regarding the resource needs and the

justification of the initiative. Ideally, along with the project costs, ROI

accounts for the costs that would be incurred in the coming three to five years

i.e. costs like system maintenance, training and upgrades, license renewal

charges etc. In the healthcare facility scenario, clinical executives who own


the business processes, benefit the most by liaising with the IT and finance for

initiatives like CPOE, EHR implementation to calculate ROI during the analysis

phase of the project. Many hidden costs are uncovered during this process.

ROI is more accurately computed through close examination of vendor

options and all associated costs (Solak & Pickens).

• Project prioritization

- Depending on ROI forecast and opportunity identification, the project

manager should come up with a ranking of the project initiatives by utilizing

the quantitative and qualitative parameters derived from the above

mentioned steps. Project prioritization can give rise to learning opportunities

in the project.

• Capacity planning

- Capacity planning is the beginning of the action part of the project. In this

phase, an analysis of the available resources to spearhead the prioritized work

and when that capacity is available is done. In this part of portfolio

management, the types of resources that are present in the organization and

their timeframes are identified to facilitate the resource allocation evenly. For

example, in a healthcare facility, the IT manager is the resource owner and the

doctors or the end-users are typically the business process owners. The IT

manager might allocate dedicated resources working on single project or

allocate same resources to multiple projects based on the project

prioritization.


• Work scheduling

- In work scheduling, the project manager comes up with the schedule of the

projects as to which projects will be done when. Work scheduling is based on

the previous capacity planning and project prioritization. Having project

‘check-points’ in the project execution and scope clearly defined, eases this

process.

• Project performance and value assessment

- The project or program is regularly assessed to check if the deliverables are

being met. Secondly, the resulting business process out of the project is

examined and checked if it is meeting the objectives. We recommend that this

process is done after several months after the project completion when the

stakeholders and end users come to speed and integrate the project with

their job function. The purpose of this value assessment is to verify if the

portfolio management is operating effectively. Because some of these

concepts are fairly new to healthcare organizations, the value of many

healthcare initiatives has not been actually computed and aggregated over

time.

Extensive analysis around establishing correct business processes around the IT

implementations should also be done and someone or a team should be held

accountable for that. (Maybe, a team of senior Business Analysts (BA’s) with

organizational change management experience). The end users should be involved in

this. The analysis and documentation of the “Future-To-Be” processes should begin


with the planning phase of the project and should ideally be completed before the

actual physical implementation. (The BA’s may choose to work with trial versions of

the technology to clearly define and document the business processes going

forward.)

According to PMBOK, there are two kinds of PMO:

A PMO that handles the Portfolio of the whole organization and

manages projects from a huge umbrella all the way down.

A PMO that serves as a resource for Project managers.

A traditional PMO model may not work in the healthcare sector as there are

numerous IT projects running simultaneously in several departments. It is very

difficult to have a consensus for the prioritization of these projects for a PMO. The

PMO would need to have full support and buy in from the administration and they

would also need to be given authority to make decisions and to support the strategic

plan of the organization. It is very difficult to do that in reality as the stakeholders

involved are highly influential and the environment within the hospital industry is

very political.

The Healthcare industry can be compared to a set of spoke wheels that lock each

other up. Everything has to move together in one direction.


Upstate hospital is further governed by the state of New York. They are governed by

legality, by contracts and by the attorney General’s office.

The hospital industry is very political and the organizational culture plays a huge role

in success of a PMO or a project. There is this general mindset that IT or computers

take away time from Patient care. A PMO for a hospital would have to be very

sensitive to the culture. They may first have to come in and build relationships before

they are officially announced as a PMO. They would also have to evaluate if they will

be accepted as decision makers by the organizations. A traditional PMO is more likely

to succeed in a smaller organization as compared to a university hospital. The role

and structure of the PMO may differ depending upon the size of the hospital

organization. A large organization may have different tiers or levels of people who

have decision making authority. At Upstate there are executives at the hospitals who

have the ultimate decision making power. But they have the state over them.


End User Training:

Training is very critical in IT project implementation. Project Managers have to ensure

that proper attention and time is given to each user. They also have to arrange for

people to come in and cover the shifts of the trainees or pay them overtime to do

their training after hours. They have to be very creative in their training methods to

make the projects acceptance as smooth as possible. The real “buy-in” for an IT

system is only achieved after the users start using it. According Susan Berry, it usually

takes 2 weeks for the users to completely accept a system. Training and Education

also forms an integral part of the Kerzner’s model.


Lessons Learned:

1. Health care industry is very fragmented and very political.

2. There are many influential stakeholders, each with a different agenda. The

competing interests of the different groups are not always clear or

permanent. Hence it is very important to have visible executive support.

3. Medical treatment has made astonishing advances over the years. But the

packaging and delivery of that treatment are often inefficient, ineffective, and

consumer unfriendly. The end to end business model of the hospitals needs to

be evaluated and refined. A number of independent players can be brought

into a single organization—horizontal integration—to generate economies of

scale. Or the treatment of a chronic disease can be brought under one roof—

vertical integration—and make the treatment more effective and convenient.

4. Project management can really help identify these opportunities for business

model innovations and their implementation.

5. However, it is important to understand different organizations are at different

levels of readiness and different levels of adoption for Project Management.


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