How to strategically plan for health IT budget reductions: Q&A with CIO Lehigh Valley Health Network Mike Minear

Mike Minear, senior vice president and CIO at Lehigh Valley Health Network in Allentown, Pa., discusses navigating the health IT budget and how analytics come into play when reducing IT costs.

Responses have been lightly edited for clarity and length.

Question: What does your health IT budget look like this year? Is it trending up or down over previous years?

Mike Minear: Over the past few years, we have reduced the IT budget along with other organizational budget reductions. Even with absorbing multiple hospital and ambulatory practice mergers, the IT percentage of overall LVHN revenues has decreased from 5.3 percent in 2015 to 4.7 percent in 2019. Reductions have been through negotiating technology and software maintenance cost reductions, as well as lower staffing levels with large project completion and other issues.

Next year, I anticipate the IT budget to be essentially flat even with moving three hospitals that have merged with LVHN over the past three to four years into standard LVHN software applications. Over the next several years we have targets to reduce IT costs by 8 percent to 13 percent based on overall economic planning of future organizational revenues and payer actions and agreements.

Q: How are you allocating the budget? What difference is there this year compared to previous years?

MM: LVHN does not allocate technology costs to other organizational units. I have found several challenges to create an allocation basis that is acceptable; allocating technology costs creates many barriers to fund and manage new projects and ongoing support of technology. At LVHN, the most senior executive team governs technology investments, so it works well in our organization to have all technology costs in a single corporate IT unit, allowing us to focus on value and meeting organization goals and needs versus moving around technology costs between organizational units.

Q: What projects are you most excited about for 2019?

MM: LVHN is heavily focused on expanding applied analytics to manage risk/value-based contracts and populations. LVHN has built more than 100 analytics models in Tableau Software in the last two years. We are integrating clinical data—from the Epic EHR, claims data from our Populytics subsidiary, using Optum software tools, cost data from a McKesson Corp. cost accounting system, and supply chain data from Lawson ERP software — to fully understand clinical outcomes and cost. Using this integrated data, LVHN has built 35-plus clinical pathways that focus evidence-based practice on defined patient population cohorts. This work has already dramatically improved how we manage clinical care and how we contract with payers for care, with more improvements planned.

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