CIOs can't always control how big their IT budget is, so what can they cut when everything seems important?
We asked several attendees and vendors at HIMSS17 in Orlando, Fla., this question: Many hospitals are looking for ways to trim costs — if you had to recommend one thing for a CIO to cut from his or her IT budget tonight, what would it be?
Here is what they would put on the chopping block. (Responses are lightly edited for length and clarity.)
Ed McCallister, Senior Vice President and CIO of UPMC (Pittsburgh): "The one thing would be something we don't necessarily do for a living. Manning a data center is not one of UPMC's core competencies. Our core competency is taking care of patients. It's about recognizing what items don't we make a living doing and recognizing the ones we do. If we don't define the future, someone else will."
John Kravitz, CIO and Interim Chief Data Officer, Geisinger Health System (Danville, Pa.).: "In my opinion, the opportunity is to right-size the IT organization by rationalizing the application portfolio, reducing the number of applications, since a considerable cost is associated with paying vendors for support as well as supporting a diverse infrastructure to host diverse applications. Another consideration is standardizing applications to a singular EHR system if appropriate for much the same reasons as application rationalization."
Paul Black, CEO of Allscripts (Chicago): "There is not much one can cut from their IT budget tonight unless one is living under a rock for a while. I would suggest that the CIOs take a hard look at contracts that have hefty maintenance fees for software licensed and installed in the past, explore ways to restructure contracts based on the newer pricing models prevalent in the market, outsource portions of their IT staff and fill open IT positions with staff augmentation strategies."
Francis "FX" X. Campion, MD, CMO, Ayasdi (Palo Alto, Calif.): "They should think about new ways of doing work. Whether they need to change people [or] the use of data — and that may be improving the skill set of analysts and equipping them with modern tools — is really the key."
Adam Klass, Chief Technology Officer, Vigilanz (Minneapolis): "Try to reuse what you have a little bit more. For example, if you've got a disaster recovery infrastructure set up, maybe you could use that environment for things around testing and staging instead of trying to build out new things."
Dan Michelson, CEO of Strata Decision Technology (Chicago): "Variation. That is the biggest opportunity — really having productive, collegial, balanced conversations with physicians about variation. The average hospital could double its margin just by advancing conversations with physicians in a continuous way around variation. That's a conversation people are reluctant to have because they don't know how to have it. They are in the first inning of a 9-inning game. Physicians need to be able to trust the data, you need to be able to display it in a way that is actionable, you need to do it on continuous basis and lastly it needs to be clinically balanced."
Ian McCrae, CEO, Orion Health (Auckland, New Zealand): "The thing where you are going to get the biggest return is not actually in inpatient automation. What I see today is a lot of money going into automating patient administration systems. I just don't think they are going to get the return on investment. The costs are all incurred in the community."
Suzanne Cogan, Vice President of Sales, USA, Orion Health: "I would say really consolidating all the IT systems they have. … [Health systems] grow up with multiple EMRs, multiple analytics systems, a siloed care coordination system here and another one there, and what ends up happening is this spaghetti mess of interfaces between all the systems. We've been seeing a trend in consolidating those, having a centralized platform to acquire and aggregate the data, normalize it so it's all curated, and then feed other systems with it."
Tina Foster, Vice President of Business Advisor Services, RelayHealth (Atlanta): "I'm not sure I would look at cutting anything today. If you look at where the majority of costs in the healthcare system come from today, it's in this bucket called unexplained variations in care. …Variations in care across providers, clinicians, operations and workflow leads to a tremendous amount of waste. Because I am an analytics geek, a lot of data is about helping customers understand where those variations are actionable. …When you look at all the key components of the data… that's when you are going to be able to manage variations in care and that's when you are going to be able to cut costs in a high-quality way, as opposed to making cuts that impact quality on the back end."
Todd Rothenhaus, MD, CMO, athenahealth (Watertown, Mass.): "Predictive analytics. No. 1. I don't want to say its all smoke and mirrors. Eventually I know that somebody will detect inferences and it will be, 'Mr. Jones exceeds the threshold of 1.5 percent chance of dying next year.' But what I see in all of our clients, everywhere I go and every prospect I ever meet, is data that is staring them in the face that they are not taking action on because they don't have the capacity to do it or they haven't done the hard work of operational delivery. You've got these people who are buying technology in the absence of the ability to implement it or to make the best use of it because there is something lower on Maslow's hierarchy that hasn't been checked off yet. I think predictive analytics is the biggest one. I know it may cure cancer some day, but it isn't going to help the lady get into her Datsun B-210 to get to her diabetes appointment because her sugar is 400."
Hemant Goel, President, Spok (Eden Prairie, Minn.): "I have two answers. One is if the CIOs were to go and look at all the applications they have, I bet they would find a lot of overlaps in capabilities. …The second thing is another way of saving costs without having to trim anything. A lot of CIOs do not use the applications to the fullest extent possible. If you go 100 percent into what the application was designed for, you get so much more benefit out of it. You won't have to cut anything."
Andrew Mellin, MD, CMO, Spok (Springfield, Va.): "Look under the rocks and find the tiny things sucking a lot of cost and time out of your organization. These little niche solutions that your departments bought or someone's uncle is running... There is a lot of waste under these rocks they don't even know is happening in their organization. … [They] don't always have a bottom-line cost you see in the dollars you are paying, but they have a huge cost in terms of getting them integrated, supported and upgraded. When you add up all those costs, it's a lot more than you realize."
Paul Bradley, Chief Data Scientist, Zirmed (Chicago): "We definitely see a range with our clients in different HIS systems. Some of the more advanced HIS systems just collect data at a different level of granularity. From a data science perspective, I like the most granular data I can get my hands on. Maybe something not so much to divest in but to reinvest in is an upgraded system. We work with some systems that have kept their trains running for awhile on tracks where parts could be replaced. My gentle recommendation is to look for your software and hardware upgrades."
James Golden, PhD, Senior Managing Director of Healthcare Advisory and Healthcare IT Practice, PwC (Hartford, Conn.): "I don't think this is the time to trim. There are always opportunities to optimize. But when I think about IT, IT isn't an add-on to a provider. It is central to a provider. I think it's just more about being thoughtful. We are watching many of our clients just start to do EMR adoption. It's hard and it's expensive, but it has to be done."
Mick Coady, Principal, PwC (Houston): "The rationalization of software. I go into hospitals that range from $2 billion all the way up to $12 billion or $15 billion, and the portfolio of software that sits on the shelf that they are paying 20 percent year-over-year maintenance on is mind-boggling to me. It's a reconciliation issue, but application software is a huge spend in healthcare and they just haven't done a good job of managing it. They could pick up a lot of money if they would jettison some of the legacies that have been sitting there."
Jennifer Esposito, General Manager, Health and Life Sciences, Intel (Santa Clara, Calif.): "The same tool you might buy for clinical analytics or artificial intelligence, whatever it is, the same analytics package can certainly be used to improve your operational efficiency. One of the things I might suggest is some people gravitate toward single-use case solutions or an algorithm that solves a very specific problem — maybe its related to reimbursement or a CMS penalty or something like that — but people really need to make sure that whatever they are doing can be leveraged more broadly in their organization."
Christopher Tackett, Healthcare Industry Marketing Manager at Intel: "I would say the upside is the more you utilize analytics, the more you improve operational and clinical efficiencies, which will help you cut costs."
Aaron Miri, CIO, Imprivata (Lexington, Mass.): "I've been a CIO and a CTO in a couple of systems. What I would eliminate is the cost in overhead by manually worrying about duplicate medical records and not knowing who is coming in your front door. In my case I had several [staff members] who were manually sorting through medical records saying, 'OK does this baby girl look like this baby girl, even though they have two different, but similar names?' … I would put in technology… to understand really what's going on, remove the clutter from your medical records so you're not worried about merging records downstream, which costs more man hours. And then take that head count and put them on something like working on your EMR, working with your physicians to get better coding."
Heather Staples Lavoie, Chief Strategy Officer, Geneia (Harrisburg, Pa.): "There is an opportunity, particularly as tools have matured, to have fewer slice solutions. It provides better opportunity in terms of less cost from a licensing perspective and more value in terms of the solution [hospitals] are able to obtain. That's where they struggle. Vendor management is a challenge. … It's hard to cut your IT budget because the needs at organizations are only growing. I think they also have an opportunity to get a better return on investment for the investments they are already making."
Bridget Duffy, MD, CMO, Vocera (San Jose, Calif.): "I'd cut redundancy and too many clicks from the EMR that are causing fatigue. ... I think IT should focus on stripping out the hassles from a doctor's or nurse's day. They could cut out costs when they cut out the hassles and amplify the joy."
Ben Kanter, MD, CMIO, Vocera (San Jose, Calif.): "Cardiac telemetry. Because there is a lot of evidence that says it is grossly overused, it is an enormous cost and provides no patient benefit for a large percentage of the patients that it's used on."
Andrew Adams, Principal, Ernst & Young (New York): "Population health software tools. I think a lot of them turned out to not be very beneficial, and probably aren't good investments until you've got your data governance under control. Really focus on your data governance."
James Costanzo, Global Health Advisory Leader, Ernst & Young (Detroit): "To be completely transparent, many organizations have spent lots of money on building warehouses and building data marts and building all this stuff and they don't see the return on their investment because they haven't been able to take advantage of it. They could continue to invest in data scientists and people who know this stuff and really drill deep in analytics, or they could work with firms like us or others that have already made that investment and are willing to do it as a service, and start to receive that return on investment that they've already made. I do not believe that they should stop focusing on analytics because it's critical."
Frances Dare, Managing Director, Health & Public Service, Accenture (Irving, Texas): "I would advise CIOs look at technologies that enable lower labor intensity. Healthcare is one of the most labor-intensive of all industries. There are also things you can do to shift some of the work back to patients or consumers. They can do some of their own self-monitoring or answer standardized questions before an annual physical. E-visits take half the time of a traditional, in-person encounter. So if I were a CIO trying to make a real difference for my health system, I would look at technologies that unlock labor capacity."
Brian Kalis, Managing Director of Digital Health and Innovation, Accenture (Minneapolis): "It's about rethinking to fuel growth and efficiency and quality all at once, but that requires a full reconfiguration, rather than just cost-cutting."
Dave Dyell, President and CEO, Jellyfish Health (Panama City, Fla.): "I've seen most of our partners not necessarily in eliminating something, but trying to optimize what they have and really try to bring efficiency to it. That's probably a more practical approach. A lot of the organizations I've worked with, I don't see a lot of waste at. That concept of eliminating something I don't think is relevant."
Randy Parker, Founder and Chief Business Development Officer, MDLive (Sunrise, Fla.): "Redundant and multiple vendors working inside their system to solve the same problem. Consolidation and unification of a platform. Not having multiple vendors all working with certain components of their problem. A lot of the systems who are looking at telemedicine may be dealing with three, four different vendors not communicating with each other on a unified platform. Condensing and consolidating of that effort to have a better outcome I think is critical."
Keith Bigelow, Genera Manager of Analytics at GE Healthcare (San Francisco): "Start at the macro level and look at waste. $3 trillion is spent on healthcare in the United States, $900 billion of which is waste. If I were to cut something from the CIO's budget, we should be looking to take cost out of your organization — it's full of waste."
Bill Miller, CEO of OptumInsight (Eden Prairie, Minn.): "I would largely give the industry credit for this, but I think everybody has to look at their operations and determine, 'Do I have to be in absolute control of all my operations?' There are companies that can scale and do things at a lower cost. Look at where you are redundant and where somebody who has built scale could do better. Look for redundancies and look for companies that can create efficiencies just because they've concentrated their efforts and technologies in a means to do that. We follow that rule internally ourselves; there are some things we don't do that third parties do."
Suzanne Travis, Vice President of Regulatory Strategy at McKesson Technology Solutions (Alpharetta, Ga.): "I recommend they outsource the revenue cycle. That would be my advice for anything that is not their competency. Outsourcing things like the revenue cycle are great things to do right now. [Hospitals] need to focus on care quality; why not shift the burden of dollars and cents to somebody equipped to do that?"
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