Health care leaders understand their role as change managers. Managing organizational change in health information systems initiatives can be very complex and concurrently rewarding, even when carried out strategically. The way in which data is inputted, stored, accessed, and disseminated is essential to quality patient health outcomes, profit margins, standardization, and strategic planning. When a health information system implementation is completed effectively and efficiently, the result is a quality IT project that is not only ready for the next generation but is ready for new technology convergence.
Evaluate the role of the Project Steering and Review Committees in change management.
Chapter 12 IT Alignment and Strategic Planning
Information technology (IT) investments serve to advance organizational performance. These investments should enable the organization to reduce costs, improve service, enhance the quality of care, and, in general, achieve its strategic objectives. The goal of IT alignment and strategic planning is to ensure a strong and clear relationship between IT investment decisions and the health care organization's overall strategies, goals, and objectives. For example, an organization's decision to invest in a new claims adjudication system should be the clear result of a goal of improving the effectiveness of its claims processing process. An organization's decision to implement a care coordination application should be a consequence of its population health management strategy.
Developing a sound alignment can be very important for one simple reason—if you define the IT agenda incorrectly or even partially correctly, you run the risk that significant organizational resources will be misdirected; the resources will not be put to furthering strategically important areas. This risk has nothing to do with how well you execute the IT direction you choose. Being on time, on budget, and on specification is of little value to the organization if it is doing the wrong thing!
IT Planning Objectives The IT strategic planning process has several objectives:
To ensure that information technology plans and activities align with the plans and activities of the organization; in other words, the IT needs of each aspect of organizational strategy are clear, and the portfolio of IT plans and activities can be mapped to organizational strategies and operational needs To ensure that the alignment is comprehensive; in other words, each aspect of strategy has been addressed from an IT perspective that recognizes not all aspects of strategy have an IT component, and not all components will be funded To identify non-IT organizational initiatives needed to ensure maximum leverage of the IT initiative (for example, process reengineering) To ensure that the organization has not missed a strategic IT opportunity, such as those that might result from new technologies To develop a tactical plan that details approved project descriptions, timetables, budgets, staffing plans, and plan risk factors To create a communication tool that can inform the organization of the IT initiatives that will and will not be undertaken To establish a political process that helps ensure the plan results have sufficient organizational support At the end of the alignment and strategic-planning process, an organization should have an outline that at a high level resembles Table 12.1. With this outline, leadership can see the IT investments needed to advance each of the organization's strategies. For example, the goal of improving the quality of patient care may lead the organization to invest in databases to
measure and report quality, predictive algorithms to identify patients at risk of readmission, and the EHR.
Table 12.1 IT initiatives linked to organizational goals
Goal IT Initiatives Research and education Research patient data registry Genetics and genomics platform Grants management Patient care: quality improvement Quality measurement databases Order entry Electronic health record Patient care: sharing data across the system Enterprise master person index Clinical data repository Common infrastructure Patient care: non-acute services Nursing documentation Transition of care Financial stability Revenue system enhancements Payroll-personnel system Cost accounting
In many ways the content of Table 12.1 is deceiving. It presents a tidy, orderly linkage between the IT agenda and the strategies of the organization. One might assume this linkage is established through a linear, rational, and straightforward series of steps. But the process of arriving at a series of connections similar to those in Table 12.1 is complex, iterative, and at times driven by politics and instincts.
The development of well-aligned IT strategies has been notoriously difficult for many years, and there appears to be no reason such an alignment will become significantly easier over time.
Overview of Strategy Strategy is the determination of the basic long-term goals and objectives of an organization, the adoption of the course of action, and the allocation of resources necessary to carry out those actions (Chandler, 1962). Strategy seeks to answer questions such as, where does this organization need to go, and how will it get there? Where should the organization focus its management attention and expenditures?
The development of an organization's strategy has two major components: formulation and implementation (Henderson & Venkatraman, 1993).
Formulation Formulation involves making decisions about the mission and goals of the organization and the activities and initiatives it will undertake to achieve them. Formulation could involve determining the following:
Our mission is to provide high-quality medical care. We have a goal of reducing the cost of care while at least preserving the quality of that care. One of our greatest leverage points lies in reducing inappropriate and unnecessary care. To achieve this goal, we will emphasize reducing the number of inappropriate radiology procedures. We will carry out initiatives that enable us to intervene at the time of procedure ordering if we need to suggest a more cost-effective modality. We can imagine other goals directed toward achieving this mission. For each goal, we can envision multiple leverage points, and for each leverage point, we may see multiple initiatives. The result is an inverted tree that cascades from our mission to a series of initiatives.
Formulation involves understanding competing ideas and choosing between them. In our example, we could have arrived at a different set of goals and initiatives.
We could have decided to improve quality with less emphasis on care costs. We could have decided to focus on reducing the cost per procedure. We could have decided to produce retrospective reports of radiology use by provider and used this feedback to lead to ordering behavior change rather than intervening at the time of ordering.
In IT, we also have a need for formulation. In keeping with an IT mission to use the technology to support improvement of the quality of care, we may have a goal to integrate our clinical application systems. To achieve this goal, we may decide to follow any of the following initiatives:
Provide a common way to access all systems (single sign-on). Interface existing heterogeneous systems. Require that all applications use a common database. Implement a common suite of clinical applications from one vendor.
Implementation Implementation involves making decisions about how we structure ourselves, acquire skills, establish organizational capabilities, and alter organizational processes to achieve the goals and carry out the activities we have defined during formulation of our strategy. For example, if we have decided to reduce care costs by reducing inappropriate procedure use, we may need to implement one or more of the following:
An organizational unit of providers with health services research training to analyze care practices and identify deficiencies A steering committee of clinical leadership to guide these efforts and provide political support A provider order entry system to provide real-time feedback on order appropriateness Data warehouse technologies to support analyses of utilization Using our clinical applications integration example, we may come to one of the following determinations:
We need to acquire interface engine technology, adopt HL7 standards, and form an information systems department that manages the technology and interfaces applications. We need to engage external consulting assistance for the selection of a clinical application suite and hire a group to implement the suite. The implementation component of strategy development is not the development of project plans and budgets. Rather, it is the identification of the capabilities, capacities, and competencies the organization will need if it is to carry out the results of the formulation component of strategy. Vectors for Arriving at IT Strategy The IT strategy is developed using some combination of four IT strategy vectors:
Organizational strategies Continuous improvement of core processes and information management Examination of the role of new information technologies Assessment of strategic trajectories By a vector we mean the choice of perspectives and approaches through which an organization determines its IT investment decisions. For example, the first vector (derived from organization strategies) involves answering a question such as, “Given our strategy of improving patient safety, what IT applications will we need?” However, the third vector (determined by examining the role of new information technologies) involves answering a question such as, “There is a great deal of discussion about cloud-based applications. Does this approach to delivering applications provide us with ways to be more effective at addressing some of our organization challenges?” Figure 12.1 illustrates the convergence of these four vectors into a series of iterative leadership discussions and debates. These debates lead to an IT agenda.
IT Strategies Derived from Organizational Strategies The first vector involves deriving the IT agenda directly from the organization's goals and plans. For example, an organization may decide it intends to become the low-cost provider of care. It may decide to achieve this goal through implementation of disease management programs, the reengineering of inpatient care, and the reduction of unit costs for certain tests and procedures it believes are inordinately expensive.
The IT strategy development then centers on answering questions such as, “How do we apply IT to support disease management?” The answers might involve web-based publication of disease management protocols for use by providers, business intelligence technology to assess the conformance of care practice to the protocols, provider documentation systems based on disease guidelines, and CPOE systems that employ the disease guidelines to influence ordering decisions. An organization may choose all or some of these responses and develop various sequences of implementation. Nonetheless, it has developed an answer to the question of how to apply IT in support of disease management.
Most of the time the linkage between organizational strategy and IT strategy involves developing the IT ramifications of organizational initiatives, such as adding or changing services and products, growing market share, improving service, streamlining processes, or reducing costs.
At times, however, an organization may decide it needs to change or add to its core characteristics or culture. The organization may decide it needs its staff members to be more care-quality or service-delivery or bottom-line oriented. It may decide it needs to decentralize or recentralize decision making. It may decide to improve its ability to manage knowledge, or it may not. These characteristics (and there are many others) can point to initiatives for IT. In cases in which characteristics are to be changed, IT strategies must be developed to answer questions such as, “What is our basic IT approach to supporting a decentralized decision-making structure?” The organization might answer this question by permitting decentralized choices of applications as long as those applications meet certain standards. (For example, they may run on a common infrastructure or support common data standards.) It might answer the question of how IT supports an emphasis on knowledge management by developing an intranet service that provides access to preferred treatment guidelines.
IT Strategies to Continuously Improve Core Processes and Information Management All organizations have a small number of core processes and information management tasks that are essential for the effective and efficient functioningof the organization. For a hospital these processes might include ensuring patient access to care, ordering tests and procedures, and managing the revenue cycle. For a restaurant these processes might include menu design, food preparation, and dining room service. For a health plan, information management needs might point to a requirement to understand the costs of care or the degree to which care practices vary by physician.
Using the vector of continuous improvement of core processes and information management to determine IT strategies involves defining the organization's core processes and information management needs. The organization measures the performance of core processes and uses the resulting data to develop plans to improve its performance. The organization defines core information needs, identifies the gap between the current status and its needs, and develops plans to close those gaps. These plans will often point to an IT agenda. This vector may be a result of a strategy discussion, although this is not always the case. An organization may make ongoing efforts to improve processes regardless of the specifics of its strategic plan. For example, every year it may establish initiatives designed to reduce costs or improve services. The organization has decided that, regardless of a specific strategy, it will not thrive if core processes and information management are something other than excellent.
Table 12.2 illustrates a process orientation. It provides an organization with data on the magnitude of some problems that plague the delivery of outpatient care. These problems afflict the processes of referral, results management, and test ordering. The organization may decide to make IT investments in an effort to reduce or eliminate these problems. For example, strengthening the decision support for e-prescribing could reduce the prevalence of adverse drug events (ADEs). Abnormal test results could be highlighted in the EHR to help ensure patient follow-up. For every: There appear to be: 1,000 patients coming in for outpatient care 14 patients with life-threatening or serious ADEs
1,000 outpatients who are taking a prescription drug 90 patients who seek medical attention because of drug complications 1,000 prescriptions written 40 prescriptions with medical errors 1,000 women with a marginally abnormal mammogram 360 who will not receive appropriate follow-up care 1,000 referrals 250 referring physicians who have not received follow-up information four weeks later 1,000 patients who qualified for secondary prevention of high cholesterol 380 will not have an LDL-C on record within three years
When this vector is used, the IT agenda is driven at least in part by a relentless year-in, year-out focus on improving core processes and information management needs.
IT Strategies That Rely on New IT Capabilities The third vector involves considering how new IT capabilities may enable a new IT agenda or significantly alter the current agenda. For example, telemedicine capabilities may enable the organization to consider a strategy of extending the reach of its specialists across its catchment area to improve its population health efforts. Data-mining algorithm advances might enable an organization to assess different treatment approaches to determine which approaches lead to the best outcomes.
In this vector, the organization examines new applications and new base technologies and tries to answer the question, “Does this application or technology enable us to advance our strategies or improve our core processes in new ways?” For example, advances in sensors and mobile applications might lead the organization to think of new approaches to providing feedback to the chronically ill patient. Holding new technologies up to the spotlight of organizational interest can lead to decisions to invest in a new technology. An extreme form of this mechanism occurs when a new technology or application suggests that fundamental strategies (or even the organization's existence) may be called into question or may need to undergo significant transformation. In general these strategies lead to a decision to adopt a new business model. A business model is the combination of an organization's decisions about what it will do, how it will do it, and why “the what and how” are of such value that customers will pay them.
For example, Uber's business model is that it will get you from point A to point B (the what) but it will do so in a way that involves “renting” capacity from drivers already on the road and making the process of ordering a ride and paying for a ride very easy (the how). The what for Uber is no different than that for a traditional taxi company but the how is very different. Uber's superior business model was made possible by new information technologies—the web, mobile devices, and advanced analytics.
Perspective Internet of Things
The Internet of Things is a class of information technology that has several components; things (people, buildings, equipment, etc.); sensors attached to the things (sensors that measure heat, acidity, movement, etc.); processors that read and interpret sensor data; and a network (the Internet usually) that connects sensors and processors to cloud-based (usually) analytics.
There are several potential uses of the Internet of Things in health care:
Monitor equipment utilization and performance; for example, is a part in the MRI about to fail? Supply management; for example, where is a supply in its transit to the hospital? Monitoring of environmental data; for example, what is the humidity outside? Monitoring the physiological status of a patient; for example, is the patient's blood sugar level too low? Process orchestration; for example, is the orderly who needs to take the patient to radiology on her way? In an IT strategy discussion, these questions could be raised:
What is the Internet of Things? What are the possible uses and are those uses mature? Does the Internet of Things help us advance strategies or suggest new strategies? If so, what do we do?
IT Strategies Based on Assessment of Strategic Trajectories Organization and IT strategies invariably have a fixed time horizon and fixed scope. These strategies might cover a period of time two to three years into the future. They outline a bounded set of initiatives to be undertaken in that time period. Assessment of strategic trajectories asks the questions, What do we think we will be doing after that time horizon and scope? Do we think we will be doing very different kinds of things, or will we be carrying out initiatives similar to the ones we are pursuing now?
For example, we might be planning to implement a broad portfolio of health care information technology. The organization believes that through medical advances and preventive care the number of patients older than one hundred will increase dramatically. The strategic trajectory discussion asks, “Does this increase in longevity have significant implications for the types of health care that we deliver and hence on the types of information technology that we implement?”
Or we might be in the process of using IT to support joint clinical programs with other hospitals in the area. These efforts would be greatly helped by the availability of broad interoperability. However, such pervasive interoperability has proved elusive and may be elusive for a decade. How would pervasive interoperability affect our IT strategy?
The strategic trajectory discussion can be highly speculative. It might be so forward looking and speculative that the organization decides not to act today on its discussion. Yet it can also point to initiatives to be undertaken within the next year to better understand this possible future and to
prepare the organization's information systems for it. For example, if we believe our information systems will eventually need to store large amounts of genetic information, it would be worth understanding whether the new population health systems we will be selecti
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