The healthcare system has its share of issues, some of which will take years to fix, and some — like the amount of inefficiency embedded into processes — that can be solved much sooner, according to Chuck McDevitt, CIO at Self Regional Healthcare. McDevitt sees a great deal of potential in implementing lean methodologies to drive down costs and boost patient satisfaction. In this interview, he talks about how his organization is using evidence-based medicine to streamline processes, the challenges of straddling the ACO and fee-for-service worlds, and the cultural change taking place within Self Regional to improve employees’ health. He also discusses integrating the acute and ambulatory environments, his device management strategy, and how he is applying lessons learned from working in other industries.
Chapter 2
- Developing strategy with so much uncertainty
- The ICD-10 delay
- Comparing healthcare to other industries
- Bringing Lean to healthcare
- Running McKesson Horizon 10.3 and looking at the future
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Bold Statements
I see IT as being an integral part of the overall hospital strategy and not a strategy in itself. Because I think we’re pervasive throughout all the programs, whether it’s the heart or cancer program; whether it’s trying to get into in accountable care model, or whether it’s on the finance side trying to drive costs down.
I think every hospital in the country would admit that there’s some waste in terms of the way we do things. I mean, why does it take us four hours to discharge a patient? That makes no sense. It’s a lean opportunity screaming to be taken on.
We already purchased that product, but now I think we need to stop and say, ‘does it make sense to continue on?’, because they haven’t announced the sunset date for Horizon either. We’ve been on Star for 10 years now, and there’s a lot to be said for recouping the investment that you’d made on some of these products.
The orders and order set process in itself, from an electronic perspective, is kind ubiquitous depending on whatever system you’re on. So if we take them through and they learn it, they learn the idea of walking around with iPads and computers in the room and their orders getting executed immediately when they go to the downstream processes.
We got a chance to look at some of the features in Paragon and understand that this wasn’t going to be a cliff event where you had to move from one to the other or look at another solution. I think we feel a lot more comfortable about it.
Guerra: With the CIO position, is it what every other leader has to deal with in today’s environment, or is it unique in the fact that it’s hard to get a sense of the strategy because we don’t know; there are so many moving parts that it’s hard to get a sense of where things are going? If you have a sense of where things are going, you can then come up with a plan and say, “Here’s where I think things are going and this is how we need to move’. But you have to kind of hedge your bets in a lot of ways and maybe hold off on making some big investments and big calls because you’re not sure — does that make sense? How do you manage that?
McDevitt: I think you have to wear multiple hats for sure. I try to stay very in touch on the business side with my colleagues on the administrative team in terms of understanding things like accountable care. I’m leading that effort here at the hospital with our head of marketing and strategy. He’s working on the people side while I’m trying to keep the technology in place, and a big chunk of what we’re doing these days is driven by Meaningful Use stage 1, 2, and 3, and they just announced the proposed stage 2. But you know, all these dates are shifting and moving. You’ve got ICD-10 out there which by itself is a big thing. It’s a challenge. I don’t think we’re going through anything different than CIOs in other industries, but I’ve only been in healthcare for about six years. I spent eight years before that in manufacturing and to me, what healthcare is going through now is what manufacturing went through 10 years ago in terms of the emphasis on lean — trying to drive cost out of the equation.
And so I think with our IT strategy, and we’re getting ready to go off on our three-year strategic planning retreat with some of our Board and physicians, I see IT as being an integral part of the overall hospital strategy and not a strategy in itself. Because I think we’re pervasive throughout all the programs; whether it’s the heart or cancer program, whether it’s trying to get into in accountable care model, or whether it’s on the finance side trying to drive costs down. The way you do lean in the emergency room or the operating rooms, a lot of it is technology-driven. And so now I think in our case, IT is a key component of all of our strategies — not necessarily a strategy by itself.
Guerra: You mentioned ICD-10 and you mentioned working in manufacturing, and you thought there were some parallels to healthcare. But did you ever have anything in the manufacturing world like the ICD-10 date and then the postponement? This has been a huge factor for a lot of CIOs and many thought the delay was absolutely necessary, and many who were working extremely hard to make it in light of the government’s insistence that the date would stand were very frustrated when it was postponed because essentially they had the rug pulled up front from under them in their own organizations, where they had been saying, ‘We have to do this.’ And all of a sudden it gets postponed. How did that affect you, and are there parallels to other industries? I don’t know if manufacturing is as heavily regulated as healthcare is, so there may not be exactly a parallel.
McDevitt: I have mixed feelings on a couple of the questions you asked. On ICD-10, I’m the same as many of my colleagues in the industry. We were ramping up pretty quick to get ready for that. We were doing analysis of all of our key codes in terms of trying to identify the hundreds of codes that we used rather than the 65,000 to try to understand the impact of our most used — the 80-20 rule that 20 percent of codes are 80 percent of the dollars coming in. We had bought software to help us with computer assisted coding because the average age of our transcriptionist is 57, and so we purchased software to lay on top of our coding software to help us try to identify the proper code. We thought that would help with the productivity loss. There are estimates out there that 50 percent of your productivity is going to be lost with the transition with your coders to ICD-10, so we were trying to put things to mitigate that.
So you feel like you lose momentum a little bit when they delay things, but at the same time, the practical side of me is looking at it saying that HIPAA 5010 did not go as smoothly in January this year as everybody had hoped either. We were okay between us and our clearing houses that I think between the clearing houses and the payers, there was a significant problem, at least there was in Southern Carolina, and I think that’s probably true over big parts of the nation. So I think it was probably the right decision to delay it, because I think we had a small sample of how the payment stream can get impacted with 5010.
But in terms of parallel with other industries, manufacturing tends to be more segmented in some ways, I think, than healthcare. I was in the aerospace industry, and back in 2004-2003 timeframe when that first came out, it was almost like a license for the auditors who were coming in from the outside to demand a lot of additional controls and internal controls and everything else, so that was a pretty tough thing for the industry. I think the biggest thing was the competition overseas with low-cost manufacturing from 10 years ago. A lot of manufacturers couldn’t keep up, so that was the thing that transitioned. But it did drive out a lot of costs in that industry, and so I think healthcare is going to go through the same thing. I think every hospital in the country would admit that there’s some waste in terms of the way we do things. I mean, why does it take us four hours to discharge a patient? That makes no sense. It’s a lean opportunity screaming to be taken on.
Guerra: Any of us who have been in the hospital agree with you there. Let’s talk a little bit about McKesson. Tell me what you’re using on the inpatient side.
McDevitt: We’re using Star for HIS in terms of our admission discharge and transfer, and then Horizon clinicals for the other side of clinicals. We’re trying to do about five years’ worth of upgrades in about 18 months. We just put in version 10.3, which is our Meaningful Use-compliant version. We are in the process of putting in CPOE, which is computer physician order entry, and that goes live this summer. We’re putting an emergency department system in, which is Horizon Emergency Care, and so we’ve got pretty much their entire suite except for the lab, which is on Sunquest, and the Cancer Center, which is on Varian, but the rest of the house is pretty much McKesson.
Guerra: Now we all know that recently McKesson announced—and I forgot the exact wording they’re going to put on it—that basically the focus going forward is moving from Horizon to Paragon. So as a Horizon customer, what do you think of that and how does that affect your plans for the future?
McDevitt: I think from McKesson’s perspective, it was a very good decision. They’ve acquired many of their Horizon assets, I think, from acquisitions and just trying to put a lot of these products together, and I think they’ve done an admirable job on it. But as you look at the complexity of the stuff underneath in terms of the Oracle database structure, trying to get all that stuff working, they’re trying to lower our cost from the healthcare facility perspective. And when it takes a year to put some of these things in or the cost of maintenance is a little higher than what it could be, Paragon makes a lot of sense. From an integrated database architecture perspective, they’ve had a lot of success with hospitals our size in particular.
Now what we had to do is step back and say, ‘does this make sense right now?’ And the answer that I looked at with my team here was, ‘No, it doesn’t.’ We’ve got our dance card set for the next 18 to 24 months. We’re in the middle of the CPOE implementation, in the middle of an emergency department implementation — we’ve got to keep going. And at some point, I was thinking three to five years out, maybe it would be time to step back and look at Paragon and look at other solutions, but now that I’ve seen a demonstration of Paragon and went to a few meetings about it, I think that timeframe might be 18 months to two years out. In terms of stepping back and saying we’ve got a large implementation out there probably a year or so from now called Horizon Expert Notes, which is getting to be the final step of having a full blown electronic medical record in the hospital, where the physicians actually chart on the patient in the hospital, I think that is a step for us that’s a pause. We already purchased that product, but now I think we need to stop and say, ‘does it make sense to continue on?’, because they haven’t announced the sunset date for Horizon either. We’ve been on Star for 10 years now, and there’s a lot to be said for recouping the investment that you’d made on some of these products and again, back to our earlier conversation about trying to reduce your cost in healthcare setting, well, IT is part of that cost.
So if we can get our value out of the Horizon suite and Star and continue on to some of these platforms for a few years, get our Meaningful Use hopefully passed us, get through ICD-10, it might make sense at that point to look at whether we go with a single database solution that takes less time to implement new features and functionalities. I’ve been impressed with what I’ve seen and heard about Paragon, and we’re kind of right at the cusp of the size of hospital, being 414 beds and about three-quarters of a billion dollars in terms of revenue, and so it’s definitely something we’re going to look at. But we’ll be looking at other things at the same time as well.
Guerra: There are so many factors that go into the decisions that you’re making right now; it’s amazing. I was just jotting some things down that you have to consider right now in making these decisions. Number one, there is no sunset date you were given on Horizon, so that’s kind of nebulous, a little cloudy. And then there also doesn’t have to be just a switch going on and off — it’s what level of support you’re getting, and is that level consistent or is it going down over time. And you don’t know at this point; you assume it’s going to be consistent. You have the idea of Paragon and its suitability or readiness for your organization, and then you also have the factor of, ‘do I train physicians on Horizon and then pretty much close to when they’re finished getting trained, I’m ready to go to Paragon and now I’m going to train them again.’ That’s not going to make for happy physicians. You’ve got a lot of things going on.
McDevitt: I think the training for the physicians is not going to be as big of an issue as we think. Let me explain that a little bit. We’ve developed about 160 order sets so far. We have a group of physicians, about 25 of them, that meet every Wednesday morning, and we get them into a room and we go through and let them argue about order sets with each other. I’ve got a great CMIO that leads that effort. And we do that in Zynx — we don’t even do it in HEO, or McKesson’s CPOE product, at this point. And so the display from McKesson when you’re doing the CPOE is actually in the ADC Van Dismal, the thing that they all learned in school on how to do orders.
And so I think what I’m saying is the orders and order set process in itself, from an electronic perspective, is kind ubiquitous depending on whatever system you’re on. So if we take them through and they learn it, they learn the idea of walking around with iPads and computers in the room and their orders getting executed immediately when they go to the downstream processes. And we’ve got all those individual orderables, or orders that everybody receives and they know how to operate, and we get some of the ward secretary stuff in the middle with the stacking and the queuing out of the way, regardless of what product we have behind it. And I think the Paragon folks — the development teams between Horizon and Paragon — are working together, and so I think the best ideas from each of those products will come forward. If we want at some point to migrate from a Horizon clinical suite to a Paragon suite, I don’t think our physicians would be that much challenged trying to learn a new set of tools. Does that make sense?
Guerra: Yeah. When you’ve talked with McKesson, when they announced this, you mentioned there was no sunset date, were you given enough information that you felt comfortable making these decisions, having some idea of the future of Horizon and the viability of it going forward?
McDevitt: Yes, I think so very much. It was a little rough at first because it’s a significant change but I think once we got the Better Health 2020 strategy rolled out completely and had a chance to speak with Dave Souerwine, Pat Blake, and Rod O’Reilly and the team at McKesson, they really did a good job going through why they were doing this. And then we got a chance to look at some of the features in Paragon and understand that this wasn’t going to be a cliff event where you had to move from one to the other or look at another solution. I think we feel a lot more comfortable about it, and in fact, I certainly wouldn’t mind talking to any of my colleagues. I’m on a couple e-mail lists with a lot of my counterparts around the country, and I think once people got over the initial, ‘oh my goodness, here’s another thing we’ve got to worry about with Meaningful Use, ICD-10 and all that stuff,’ then I think they clam down and say, ‘This isn’t going to be as big of an issue as we think. In fact, it’s going to give us some opportunities looking forward in terms of how do we lower the cost of IT between now and 2020.’
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