final report - industry research: health care delivery
DESCRIPTION
Researched features, processes and current trends in project management in Health Care Delivery culminating in a comprehensive 39 page report. Made recommendations to Health Care Executives to adopt certain approaches toward achieving excellence in IT project management. Group received top score in class for both written and verbal presentation and defense of paper.TRANSCRIPT
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
Hospitals/ Healthcare Delivery – Group 3
Final Project Report: IST 700
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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).
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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.
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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,
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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.
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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.
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
(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).
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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.
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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.
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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.
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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.
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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.
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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.
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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.
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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.
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
• 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
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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.
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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.
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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.
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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.
IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery
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