Being CIO at a community hospital has its advantages and disadvantages. On the one hand, smaller organizations can be more nimble and implement change at a faster pace. On the other hand, there are fewer resources, which means less room for error. In this interview, Frank Fear talks about the need to be willing to “stick your neck out” and be innovative, while also recognizing that if something isn’t working, you need to shift gears — quickly. Fear also discusses his enterprise application strategy, the “secret sauce” when it comes to portal adoption, Memorial’s efforts to create strategic partnerships, and his role as staff motivator.
- Not ruling out mergers
- ACA & the push for partnering
- The right time to negotiate
- Managing staff burnout — “The pace we’re going at is making it really challenging.”
- Pressure on CIOs
- Staying out of “firefighting mode”
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We need to continue to look at different opportunities to partner with other organizations where in some cases we may provide the expertise. I’m really proud of what we’ve done in IT, and other organizations may not have that expertise.
When you’re looking at a full merger or looking at stronger partnerships, the time to do it is not when you’re in dire straits, but when you have some leverage to negotiate.
We’re being asked to implement so many things at such a rapid rate, and it’s challenging. And as an executive, I better be energized and excited because if I’m not, they’re surely not going to be.
Physicians have come to trust that the product we deliver is going to work, and when we’re delivering stuff that doesn’t work 100 percent well, it really puts pressure on IT and the confidence they have in us.
It’s tough to add people, and to be honest with you, even if I could add five folks, there just aren’t people out there. It’s tough to recruit.
Fear: At the end of the day, we may merge with someone and get fully acquired, but our board has been really clear that it’s not our only option. We need to continue to look at different opportunities to partner with other organizations where in some cases we may provide the expertise. I’m really proud of what we’ve done in IT, and other organizations may not have that expertise. Please leverage our expertise in IT. We’re open to that, or the flipside of that — maybe we may need to leverage them for other services and partner with them.
So a full merger is definitely on the table. We’ve done a very deep dive and have had some discussions with area organizations about that. That’s definitely not off the table. We may fully merge. But what we’re looking at is what are we trying to accomplish? That’s our board’s focus. Let’s decide what we’re trying to accomplish, and let’s look at the best situation to accomplish that. A full merger is not the only option to achieve what we want to achieve. That’s the overall philosophy our board has taken and the direction we’ve gone in. We’re independent. We’ve created strong partnerships for service lines and we’re going to continue to do that and continue to look for partnerships.
Maybe at the end of the day it will be a full merger, but we need to make sure it achieves what we want to accomplish. Our board is really focusing on defining more and more what that means; what we want, and then looking for contingency planning where if things come up that we didn’t expect, we can say, here are a couple of options. Our board really is the one that drives the strategy and the overall governance process for that strategy. We work closely with them to help give them the operational issues and influence them in looking at that, but the board is what’s actively involved in that.
Gamble: It seems like it’s something where everybody has to do what’s best for their organization, and right now, focusing on those strategic partnerships is what makes your organization stronger.
Fear: It’s worked for us so far, but healthcare’s changing. Accountable care organizations are really going to push partnerships. We don’t provide level 1 trauma. We don’t provide open heart surgery. We’re a community hospital. Never say never, but I don’t think that’s a service we’ll offer. If that flushes out and the accountable care organizations are fully formed and fully vetted and become the standard of care, we’re going to have to have deeper partnerships with organizations that provide those services, or we’re going to be at serious risk. We don’t have a patient population large enough we believe to create our own accountable care organization, and we don’t provide all the services. If a patient comes into our network and then they need to be sent somewhere for open-heart surgery, those are high-dollar, high-risk patients that we obviously need to take care of as a patient in our community. We need a partner or someone to provide those services, or financially, it’s going to have a huge impact on us.
The landscape is changing. And that’s why I say we may end up with a full merger at the end of the day, but we’re going to continue to monitor where healthcare is going. We have clear goals and we’re going to respond to that with the path that makes sense for our organization. That’s where our board stance is, and that’s where we’re going. It may be a full merger. It may be continued strong partnerships, and it may even be a stronger partnership with one organization and maybe not a full merger. We’re open to all those different options at this point.
Gamble: That’s smart. I think you have to be.
Fear: Again, each organization is different. I have fellow CIOs at organizations where it just made sense for them to fully merge with another organization, and eventually that may make sense for us. But right now it doesn’t necessarily make sense. Financially, we’re doing very well. We have cash in the bank and our A/R days are very high, so we’re doing well. There’s no dire need to do it, but with that said, when you’re looking at a full merger or looking at stronger partnerships, the time to do it is not when you’re in dire straits, but when you have some leverage to negotiate. Our board understands that and is very cognitive of that.
It comes back to that contingency planning I was talking about. If financially, we start to struggle, then we may need to look in different areas and respond to that in different ways. It’s a challenging budget year next year for us, but we have cash reserves. We have a high number of days’ cash on hand. So we’re good. We’re doing fine as an organization, and that lends us the ability to be a little more selective than maybe some organizations. That’s where we’re standing right now.
Gamble: I think that with any financial decision you never want to wait until you’re really in a bad spot. It’s just a good philosophy to have.
Fear: It’s tough to negotiate when you’re desperate. And there are some organizations that have decided to fully merge even when they weren’t in that desperate spot, but they knew that if they did the acquisition, it would really improve the care they provide to their patients and their community and help with service lines they couldn’t effectively provide, and that makes sense for them. That’s fine, and I see a lot of organizations doing that, but it’s not the only decision. I think some independent hospitals are taking another look at what other options are out there. That’s definitely what we’re doing.
Gamble: Just in talking about everything you have going on next week and next month, obviously there is so much on your plate right now. Is that one of the challenges, just trying to keep a level head and not get too caught up in everything that needs to happen and all the priorities?
Fear: It’s tough. If you can’t tell in my voice, it’s tough. It’s tough for me to manage, but that’s not the issue. My staff is working so hard to make this happen. I’m trying to do everything I can to keep them engaged, excited, and passionate about the tools and things we have to implement, but the pace we’re going at right now is making it really challenging. We’ve done some neat things. We’ve done some innovative work. We’re a Stage 6 hospital. We’re a Most Wired hospital.
And this is felt throughout healthcare IT right now. We’re being asked to implement so many things at such a rapid rate, and it’s challenging. And as an executive, I better be energized and excited because if I’m not, they’re surely not going to be. It’s challenging. There’s no two ways about it. We’re implementing at this rapid rate, our software vendors are developing at such a rapid rate, and the software just hasn’t been tested and rigor hasn’t been done on their end. We have such condensed timeframes to test the software. We’re putting out stuff that didn’t go through the rigor that we’re normally used to, and it has some issues, and that just creates stress and it compromises the integrity of our department. Physicians have come to trust that the product we deliver is going to work, and when we’re delivering stuff that doesn’t work 100 percent well, it really puts pressure on IT and the confidence they have in us. I’ve felt that as well, and it’s been tough.
We were scheduled to go live with one upgrade in June, and we had to wait until basically November to deliver it. It had issues because there was such a push on all these changes for Stage 2 Meaningful Use. And that’s just one example of a system that we’ve had to delay go-live, and I still think at the end of the day when we go live, we’re going to have some issues to work through. Three years ago, we would’ve tested it fully. The software developers would’ve had a lot more time to develop it, and you wouldn’t have those issues. It’s just tough.
Gamble: It’s frustrating, and it puts you in a difficult spot as a leader.
Fear: And our budgets don’t change. It’s not like I can add five people. I just can’t add folks. It’s tough to add people, and to be honest with you, even if I could add five folks, there just aren’t people out there. It’s tough to recruit.
Gamble: That’s a common theme we’re hearing and it’s a little bit alarming how many people are saying that.
Fear: It’s tough to find good folks with experience. But I think we have a really good team and we’re doing good things. I’d say majority of the time we’re excited and optimistic about where things are going, but there are times when you’re in firefighting mode, and I just don’t like getting in that firefighting mode. I want to stay out of that as much as possible, but it’s just inevitable when you’re pushing the stuff out so quickly and it hasn’t had the testing cycles we’re used to.
Gamble: It’s not a time for the weak, I guess.
Gamble: Well I’ve already taken up a lot of your time, so I want to thank you. I really appreciate you speaking with us.
Fear: I appreciate it. Tell Anthony I said hello.
Gamble: I will, definitely. I’m hoping I can check back with you again down the road.
Gamble: All right, thank you.