In transition to value, CIOs must buy services — not software

"IT should be one of the places healthcare organizations actively look to save money. This will create an unusual opportunity for CIOs to become the value-based champions every healthcare organization wants on staff."

Despite being one of the United States' biggest industries, healthcare is inefficient, inconvenient and error-prone. Technology has been lauded as healthcare's savior, but I see traditional solutions falling short. The so-called 'meaningful use' of EHRs has earned healthcare organizations billions in government incentive dollars, putatively to coordinate patient care, measure outcomes and improve efficiency and quality. But many EHRs and HIEs have added to the overhead of operations, with little to no prospect of achieving a return on investment. Meanwhile, patients are no safer and healthcare no more affordable.  

Thankfully, I see the tide turning in health systems' approach to value. The shift towards value-based care is well-documented, a necessary solution for the diminishing returns health systems are experiencing even as total healthcare costs continue to rise. Less recognized is how this will redefine the concept of value in IT investments. Whether they're in competitive urban markets or small communities, CIOs must embrace IT that makes their organizations more affordable, convenient and consumer-driven. If CIOs are willing to become the champions of services over software, they stand a chance to shepherd IT from one the most expensive to one of the most valuable functions of their organizations.  

Bend the cost curve
Health systems use technology every day to treat patients and bill for services. Yet "big iron" information technology, despite being one of the priciest tools in which a health system ever invests, resists a compelling return on investment. I would argue that the very notion of investing in big iron IT is outdated. EHR and HIE investments have added significant, sometimes crippling, overhead to provider organizations. These include a host of fixed costs — annual maintenance and operating costs, hardware upgrades and personnel.

Cloud-based services that wick away back office work and manage data remotely offer an alternative: Bend the cost curve away from bloated IT departments performing utility functions toward lightweight solutions that offer tangible value, like better-coordinated care, higher reimbursements and fewer days in accounts receivable. "IT" shouldn't be synonymous with the department you lead to keep your tech running. Instead of purchasing tools, let's start purchasing IT for growth and productivity, and pay for it accordingly.

Step into your consumers' shoes
Lest we forget, patients and providers are consumers, too. High deductibles, employer incentives and abundant retail access have made patients savvy shoppers. Despite healthcare organizations' best attempts at physician alignment and clinical integration, providers will continue to refer out of network when it behooves patients' quality of care or wallet. Healthcare organizations must take a page from the consumer economy's playbook to stem out-migration. Services that offer a beautiful, compelling online experience — secure email and text, population health reminders, online scheduling and bill pay — will incent patients to seek care from your organization. Experiences that spill over to mobile and social applications should be compelling, too.

At the same time, physicians supported by high-functioning EHRs will be happier and more likely to refer in-network. CIOs who do not accept the demand for better, more consumer-driven solutions will soon find their IT projects being run out of the marketing department.

Modern IT solutions delivered as a service don't just make economic sense; they advance our industry. Open, truly interoperable systems foster innovation, promote competition, and enable disruption. Closed, proprietary software vendors inhibit you from cooperating with other data platforms and ancillary solutions. With a new wave of disruptive innovators and entrepreneurs finally arriving on the shores of HIT, the potential risk of being the last system on lock-down is incalculable.

Certainly, the day will come when open solutions are universally available to hospitals. Post-acute and ambulatory tools are already in place. Until then, resist ripping out all of your architecture for a closed, one-size-fits-all solution. Instead, get comfortable with the swivel-chair effect to keep your best-in breed solutions intact and employ a population health service to merge data into a single picture. Above all, force your vendor to earn your loyalty from the services it provides — not from the lock-down it enforces.

If you believe that technology should serve your organization's bottom line, not blow it, then HIT can no longer remain the major overhead that it historically has been. Instead, IT should be one of the places healthcare organizations actively look to save money. This will create an unusual opportunity for CIOs to become the value-based champions every healthcare organization wants on staff. In a world that cares about value, services will win out over software each and every time.

As you make your IT purchasing decisions, look hard for technology that guarantees results. In other words, buy services, and do it from a vendor competing on value. Save your organization millions of dollars and begin making IT a strategy for growth.

Dick Escue is a healthcare innovation and strategy executive and CIO of Valley View Hospital in Glenwood Springs, Colo. During the past 25 years, he has served as CIO at a for-profit healthcare services provider and at three health systems where he was responsible for modernizing and transforming IT departments, technology and practices.




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