Michael O’Rourke, SVP/CIO, Catholic Health Initiatives, Chapter 2

Think you’ve got a heavy workload as CIO of your one- or two-hospital health system? Try 76 on for size. Of course, it’s not an apples-to-apples comparison, as Michael O’Rourke does have a bevy of regional CIOs and other support staff reporting up to him, but that doesn’t mean his post is without its challenges. To learn more about what it takes to make one of the nation’s largest health systems run, healthsystemCIO.com recently caught up with the Colorado-based CIO.

Chapter 1

Chapter 2

• OneCare and CHI’s clinical application environment
• Cerner, Meditech, Allscripts and, yes, Epic
• The influence of payers on clinical application usage
• Is best of breed viable?
• Going all-in on Epic?

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BOLD STATEMENTS

… all of a sudden, there is great difficulty with the payers who are saying, “Well, you know, we have this set up electronically. We do this with Epic. If you’re not using Epic, we’re not sure we can continue our contracts with you.” It was really quite that blatant.

I think we’re going to find, in communities where the continuity of care is going to be so important, that it’s going to force a lot of hands to say, “It’s better for physicians, it’s better for patients, it’s better for practitioners if we are using the same products in areas where there is that kind of clinical overlap.”

… from my standpoint, Anthony, what I prefer to do is organically allow the markets to rationalize these things and for other programs to take out the diversity.

Guerra: Let’s get to the big stuff – OneCare, which is your big, big project – the EHR project. Doing the research for our interview, we see you’ve got interesting things going on, let’s put it that way. You’ve got Meditech for the small hospitals, Cerner for the big hospitals, AllScripts on the outpatient or for the ambulatory side. There’s been some talk out there of Epic rearing its head. So why don’t you take on all that?

O’Rourke: Sure. Well I think you said it all, so I have nothing to add. J  It’s true, Anthony, we have been an organization that’s come together, like many organizations, through acquisition, mergers, etc. So when you do that over 15 years, even though you try to rationalize your portfolio, you still have a lot of things. You have a lot of hardware, you have a lot of software, you’ve got a lot of vendors. We have, over the years, focused on really two main clinical suppliers. As you said, Meditech for usually our critical access hospitals, and Cerner for our larger tertiary hospitals. We’ve kept to that strategy. It sort of rationalized itself to that point, and that seemed to be a good place to be, 4 or 5 years ago. It was cost-effective, it was functionally effective. Providers and other staff prefer to have this structure. In fact, if you went into a Cerner site and said we’re thinking about putting in Meditech, they’d say you’re crazy. You go to a Meditech site and you get the same response. So we had a good dyad there.

Now, as we’ve moved into more of healthcare reform environment, we’ve kept to that position. I’ll talk about ambulatory in a minute.

About 3 years ago, we stopped and looked and said, “Should we move to a single solution?” We did some work around that, did some analysis and review. And the reality at that time – that was probably 2009-ish, there wasn’t a reform push. There was talk of one. That was right after President Obama came into office. We talked about it, we looked at it and we said, “You really can’t take Meditech in what it was in its current form (which is version 5 something) and deploy that in the tertiary hospitals. They’ll never accept it.” It was way too expensive to take Cerner and try to apply that to critical access hospitals. And then we looked at it and said, “At the end of the day, from a business standpoint, what value would we have in doing it? Our critical access hospitals; they’re all pretty homogeneous around Meditech and the others are spread out throughout the United States, so what are we gaining?” And from a standpoint of continuity of care, as we look at it today, there wasn’t any value in it, and it’s very expensive. So we said, “Let’s continue on a track and we’ll keep moving forward,” and we have stayed to that track.

When healthcare reform came in and the Portability Act, we knew we had to do something more aggressive in our ambulatory setting, even though we were doing some work with eClinicalWorks as well as AllScripts. We had to put in a national program that put electronic health records in all of our clinics and standalone sites. And so we selected AllScripts – they had been a partner with us for a number of years. We had a dyad there too, based on size and costs. But AllScripts had structured their portfolio such that they had a small introduction product for one or two docs, and they had a larger product for bigger practices. So we said, “Let’s go with that solution.”

So about 2010, we started to move very aggressively in putting ambulatory products out in our clinics. They really became our product line, Cerner and Meditech tied together in our clinics with AllScripts. We were very happy for about a year.

Guerra: One year?

O’Rourke: For about a year because, as the realities of healthcare reform began to take root, it became very clear that much more of the country was now beginning to coalesce around building more defined integrated delivery networks, clinical integration networks, whatever term you want to use. We started to see partnerships in a lot of markets coalesce. And that will continue on, obviously, as you read the paper and you read what we’re doing; we’re in markets and creating partnerships.

Well, when you start to create those partnerships, all of a sudden there are new dynamics that are introduced, and the dynamics spread and intervene into information technology. So you have heard about Epic rearing up in various places.

A very good example of the dynamics in the industry that drive IT to possibly have to make different decisions is we have a large hospital and clinic system up in the northwest in Tacoma. The market in Tacoma is very much becoming connected. So we have our Franciscan Health System up there. They work very closely with Providence, they work very closely with Group Health. And the market, at this point, has almost unilaterally moved to a homogeneic environment with Epic, and it’s just sort of evolved that way. And so the interaction contracts with, say, Group Health and others are all done through various different Epic systems in the market there. So our Franciscan market, which is a very strong Cerner user, is up there working and, all of a sudden, there is great difficulty with the payers who are saying, “Well, you know, we have this set up electronically. We do this with Epic. If you’re not using Epic, we’re not sure we can continue our contracts with you.” It was really quite that blatant. You need to be using these systems.

We had numerous conversations with the folks up in Franciscan Health. We talked about whether you’re Cerner or Epic — pick a name — through an enterprise master patient index with health information exchange, we could easily tie those together, exchange information. It really should not be a barrier.

But it wasn’t a technology issue. It was more of a position in that marketplace that was putting a lot of pressure on the Franciscan Health System. To a point, they were very concerned that a large portion of their payers and the lives that they support would be moved. And so we did make a decision. It was much more of a business decision than an IT decision. I supported where the business was. They were really sort of painted into a corner. And so they moved into the process of de-installing Cerner and putting in Epic.

That’s a byproduct, I think, of the way much of the country is moving to try to create continuity of care, reaching out into the communities, being able to really have a seamless information infrastructure forum. Can it be done in a heterogeneous environment? Yes, it can. But at some markets, the drive is so great that you really have to just streamline. And if you have to introduce something new into your portfolio, you just need to do it for the business.

So I would say, right now, we are Cerner, Meditech, and an Epic environment; and probably will be for a number of years.

Guerra: And AllScripts?

O’Rourke: Oh yes, and AllScripts too. Absolutely.

Guerra: So basically, just to recap and make sure I have it straight, it was a payer in one of the local areas that said, “In order for us to keep supporting you, you’re going to need to get on the Epic system”?

O’Rourke: Yeah. It really was pressure from a payer market which astounded everyone. You heard the term “new normal”? All of a sudden this is part of the new normal. You have to have extension of care. Important to that is the insurance part of it, whether it’s a third payer or you have your own insurance arm. And, obviously, for many years to come, we’re going to be very dependent on our commercial and government payers. I’m not sure if they ever put it in writing because it might have been a little bit over the top there, but certainly it was very clear when we met from an executive standpoint that if the health system wanted to stay and keep these lives they had covered, it was in their best interest to switch (to Epic).

I’ll give you one other example – again, relative to the changing dynamics of what the industry is doing – another market we have in Kentucky. In Kentucky, we have a large population in Lexington and Louisville, and then smaller outlying communities at Shelbyville and some other small, very rural areas. And in that market, originally we had in the urban areas, again, Cerner, out in those smaller markets was Meditech, a cost-effective, very good product. The Kentucky market went through a consolidation process and added an organization in the same areas down in Louisville, and they were working with the University Medical Center in Louisville to create what they call the statewide network. And in that process, as we sat down and talked about what should be the clinical integrated product for them, it became very clear that having Cerner in the urban areas and Meditech in the rural areas was going to be challenging. And the question I posed was, “Why is that challenging? What is it about the business function, the flow of patients, the flow of physicians (because these are very remote from each other) that’s going to make the difference that would cause you to say we have to have the same product?” Like I said, you can share the information through health information exchanges and other means.

Well, the difference was in the conversation and the business planning. The plan was that residents from the university medical center would be placed out in various sites, including the rural sites and rural hospitals. That was going to be a part of the teaching program – their mentorship program. And, all of a sudden, the dynamics of keeping a heterogeneous mix became rather challenging. So the decision was made that we would put Cerner in where the Meditech sites were.

The dynamics, as we keep going through healthcare reform — population health management, accountable care organizations — I think will cause us to continue to change how IT is used. I don’t think we’re all going to be one day using Epic and all using AllScripts, but I think we’re going to find, in communities where the continuity of care is going to be so important, that it’s going to force a lot of hands to say, “It’s better for physicians, it’s better for patients, it’s better for practitioners if we are using the same products in areas where there is that kind of clinical overlap.” So I think we’re still teed up for quite a bit of change yet.

Guerra: So it sounds like you’re in the middle of the best of breed versus enterprise system divide?

O’Rourke: I’m probably a centrist on this. I’m agnostic, to be honest with you. J  Here’s how I see it, and I try to look through the lens of the business. If I go back three years ago… or even two years ago and say it would have been an opportunity to just go homogeneous across our whole environment, I would say from an IT standpoint, and from our operating expense standpoint, and certainly from the way information flows, that certainly is the easiest thing. That would be great. I could really streamline a whole lot of the interfaces and such, lower some of those costs. But the investment in the size that we have and the scale we have is so large and looming — in good faith, talking to the CEO and COO, their eyes just pop out of their heads. And the question comes, “What’s the business benefit to do that?” Other than reducing some cost and having more streamlined IT behind the curtain, there isn’t a whole lot.

If you’re an organization with one single market, I think you can make that decision if you’ve got that overlap. You’ve got a lot of patients moving around.

When I started my career, I was in a market in Sacramento and there were 5 hospitals in that market. They were fairly close together. There was a lot of overlap, even in some specializations. We made a decision at that point to put in one system, we took out all of the various other systems that had grown there, and it was great because it really enhanced moving patients and physicians from one hospital to the other where they overlapped and such. One became a Cardiology Center of Excellence and they moved patients there; it worked like a charm. But if you expand that across 19 states and you have a mix and say, “It’s in our best interest that Tacoma and Des Moines and everyone be on the same thing because we’re going to have some integration of patients,” we’re not. We’re not sending patients from Tacoma to Des Moines, and vice-versa.

So, from my standpoint, Anthony, what I prefer to do is organically allow the markets to rationalize these things and for other programs to take out the diversity. And I think over the next couple of years, we’ll start to see more homogeneity throughout. But I think in 10 years, we’ll still have a Des Moines market which is a solid Cerner/AllScripts, a Tacoma market solid Epic. I think we’ll still have those.

But if you think about it, it’s more on a micro level that they are much more homogeneic. But across 19 states, there’s just isn’t enough business reason to rip out and put in a single system.

Guerra: Do you think that, possibly, the experience that caused you to put Epic in that one market might be repeated? That this could become a common thing among health plans?

O’Rourke: Well, I think the market up in the Northwest is somewhat unique. But I do believe there will be other pressures coming — whether it’s from payers or new partners that come in, whether it’s Epic or something else. For someone to say, “In this community, we really need to have X, Y and Z because of the way our business office runs, and now you are a partner or a vendor to us in this market.” So I think there will be some more jockeying in that regards. I think there are some specific markets where it is much more amplified. In the Northwest, when you go through Oregon, California and into Washington, that is somewhat of a specialty market, and it is very pronounced with Epic in that area. Epic is a – not to be demeaning but it’s almost like a sub cult in that market. It really is.

But my perspective is always: what is the best course of action for the business, what are you seeing at a micro level or a macro level. And, as I said, I’m very agnostic to product. I just try to look through the lens of “Is this product best? What does the future hold? Will this stand up for years? Will we get useful life? Are there dynamics happening that mean we have to make some more forward determinations or new determinations about the market?” Really, it’s happening everywhere in the market. In CHI’s markets right now – partnerships, affiliations that are going on.

Guerra: I can’t imagine it’s very often that your organization has to comply with the will of a service provider.

O’Rourke: Well, when it comes to – as we talked about – cash, what is the golden rule? He who has the gold makes the rules. J  That’s very true.

I think in the future, it’s going to be very dynamic because many organizations right now are looking at accountable care management (how they’re going to address that) are looking at either very entirely associating with commercial insurers or possibly creating their own insurance in some markets. I think that will change some of the dynamics there.

But there are such strong markets in places where they have, for example, the Blues, or in certain markets, really intransigent stuff. At this point, if you don’t play with the Blues in those markets, you don’t have a contract. If you don’t have a contract, you don’t have patients. You don’t have a system.

Guerra: Then the CFO comes to see you. J

O’Rourke: Yeah, the CFO comes to see you, then the CEO comes too because there is no cash flow, but you really don’t even have a business at that point.

Guerra: Right. That doesn’t get you invited to the company Christmas party.

O’Rourke: No. It gets you invited to a few things, but it’s more of the proverbial woodshed kind of event that you get invited to. So you just have to be able to be flexible. And I think the larger your system is, you want to create as much standardization as possible. You want to take out as much diversity as possible. Absolutely.

We have a program that is going through, and we look at – certainly we have Cerner, Meditech, AllScripts; our primary clinical systems. But we are going through our portfolio. We have programs called application rationalization where we take everything we could find that has more than one or two solutions to it. These are rather smaller ones like, say, a credentialing system or a dietary system. And we are go through saying, “Here is the standard — work with us.” I’ll give you an example.

We have 17 dietary systems today. How many dietary systems do you really need? Well I would say 1, maybe 2. They really all do the same thing. So we have gone through with a number of dieticians and folks at the organization said, “Okay. Pick your flavor.” And they all say, “Oh, I can’t.” So I say, “Well, let me help you out. You must, or I get to pick it.” So it’s like, “Oh, well then we want this one.” And then what we do is following along OneCare, we try to go in and take out the dietary systems and standardize on that.

So from the standpoint of a CIO in the country, I would say the more you can rationalize, the more you can standardize, the better for the company – lower cost, easier to maintain, better for integration, better for seamless touch points. But in some cases, when you get to the bigger systems like Cerner and Meditech, in those things we have huge investments. That takes a while before you can just take those out.

Guerra: Now this question reminds me of when you see a journalist ask a politician if they’re going to run for president. Even if they are, they can’t tell you. So my question is – we should not expect to see an announcement in the next 12 months from Catholic Health Initiatives saying we’re going full-blown Epic over the next 5 years?

O’Rourke: No, and I can say that without political concern that we are not going full-blown Epic in the next 12 months. But I would say there are organizations and markets that we are talking to that have Epic as their product. We’re talking with them as we affiliate, or we do a joint operating venture with them, on what is the integration, how are we going to do this, what are the clinical integration points, because we definitely don’t want to have a situation where we’re trying to create a clinically integrated network with a new relationship in which care providers have to go from one side of care to the other and have to learn new systems and new products and stuff, so we really do try to make sure that we make a good business decision, even if it’s not, say, within the framework of what I would say my application portfolio would be.

Another perfect example – Alegent. We recently just had Alegent in Nebraska join us. They’ve always been an affiliate with us, but now they are really part and parcel to the family. They are moving to Epic. They had signed the contract before the deal and they’re moving to Epic. And so we’re working with them to say, “How is that going to work through the rest of our Nebraska organizations and such?”

So I think, Anthony, we’ll be doing this for organizations that are going out on large scale mergers and acquisitions. This is going to be a, I won’t call it a challenge, but an effort to see how we integrate clinically, what’s the best solution. You might even say CHI will get a little more diverse before it gets less diverse with the activities going on today.

Chapter 3