It almost didn’t happen. Lee Milligan seriously contemplated texting the CEO in the middle of the night to say he had changed his mind about taking the CIO role at Asante. His doubts were completely understandable; not only did it mean leaving the CMIO position, which is a significant change, but it also meant filling the shoes of his predecessor, who had resigned after more than 20 years at the helm.
If that wasn’t daunting enough, a new CEO had just taken over.
Fortunately, Milligan never sent the text, having decided that the rewards outweighed the risks. But it hasn’t been an easy adjustment. “I had to be more honest with myself than I’ve ever been in my professional career in sizing up what I do well and in what areas I’m lacking,” he said in a recent interview, during which he opened up about how he was able to grasp the CIO responsibilities, what surprised him most during the first 6 months, the goals he has established for his team, and why he never takes metrics at face value.
- About Asante (3-hospital system located in Oregon)
- Serving on the board as CMIO – “It was an awkward situation, but I learned a lot.
- Dramatic leadership changes
- “We didn’t see it as a negative; we saw it as an opportunity.”
- Help from mentors with budgeting & allocating resources
- CIO coach: “A lot of it is navigating politics and looking at how to frame things.”
- Using better metrics – “You have to understand your numbers & how they’re calculated.”
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It was an awkward situation and one I probably wouldn’t repeat, but I learned a lot. Having to vote and read all the material and think through some of the strategic decisions has really helped me in my current position.
It’s a way to put fresh eyes on the work we’re doing. Let’s approach it that way. If we could do this all over again, how would we construct and frame ITS to better support the mission of the whole system?
I had to be more honest with myself than I’ve ever been in my professional career, to size up what I do really well and in what areas I’m lacking. I tried to seek input from people I know would be honest, and not just tell me what I wanted to hear.
My team collectively told me it was the best budget season they can remember. It’s usually a very painful experience, but we were able to navigate that really well.
Being able to reframe the argument, and actually having a relationship with the people you have to negotiate with — that combination can be powerful.
Gamble: Let’s start with some background information. You’ve been with Asante for 19 years, correct?
Milligan: Yes, it’s a lifetime.
Gamble: It is, especially in this field. Can you provide an overview of Asante — what you have in terms of hospitals and other care offerings, and where you’re located?
Milligan: Sure. We’re a three-hospital system located in southern Oregon. We have a multi-specialty medical group with about 300 physicians. Of our hospitals, the flagship has around 400 beds, the second largest has around 200, and the third largest has about 100. It’s a regional referral center, so we draw from nine counties.
In terms of revenue, we’re going to be crossing the billion-dollar threshold this year. So we’re still small, but not as tiny as we used to be. We have an ACO, a clinically integrated network that’s been up and running for a few years now called Asante Health Network. We’re about 20 percent into the journey of population health. A few years ago we had taken a broader step toward it but then pulled back. Now we’re doing it, but not quite as boldly.
We have most specialties represented; we do everything here from plastic surgery to advanced eye care. There’s a boom of ophthalmologists here, so we have some of the best trained, most highly specialized ophthalmologists on the west coast.
We also have interventional radiology as it relates to stroke. We do something called a thrombectomy where, if someone has a stroke, instead of giving them a powerful medicine called TPA, we can grab the clot and remove it, which is a fairly advanced capability for a smaller organization.
Gamble: Let’s talk about Asante’s governing board. It’s made up of physicians and local volunteers — how does that affect the way decisions are made?
Milligan: That’s a great question. The physicians who are currently on there are ex-officio, which means they’re on by virtue of the fact that they’re the chair of the medical staff of the individual entity. They don’t vote. And the rest are made up of business leaders from the community. In an interesting twist, I actually served on the board for three years as a voting member, while I was employed as CMIO. It’s a bit out of the ordinary; the board actually requested that the medical group have a representative, and I was elected to do that. It was a tad unusual to be a member of management and also serving on the board — a situation and one I probably wouldn’t repeat, but I learned a lot. Having to vote and read all the material and think through some of the strategic decisions has really helped me in my current position.
Gamble: And of course, that’s the CIO role, which you stepped into earlier this year. Can you talk about how that move came about?
My predecessor was in the role for 24 years. It’s interesting; when someone is in a role for a very long time, certain things get done a certain way. That’s just what happens. And so in early January — it was the ninth, I believe — we had a scenario where the CEO was retiring after 20 years.
On the last day of the outgoing CEO’s tenure, my predecessor in this role resigned. And so the incoming CEO called me, and we had what I can only describe as a really interesting, somewhat surreal discussion. I had just landed in Portland when I saw I had a few texts from him. I tried to call but missed him, and when he called back, he told me that the CIO had just resigned. He and I are friends, and we had a really good conversation about what this means for the organization, and what it means for ITS leadership. As he was sizing this up, he really asked he right questions of me.
Ultimately, we didn’t see it as a negative; we saw it as an opportunity for a brand new way to look at things. It’s a way to put fresh eyes on the work we’re doing. Let’s approach it that way. If we could do this all over again, how would we construct and frame ITS to better support the mission of the whole system?
When we framed it that way, it still felt daunting. But it also felt liberating. And because we were on the same page, my ideas were his ideas, and vice versa. I’ll admit, I was tempted to text him in the middle of the night and say I didn’t want to do it, but I didn’t, and the next day, the announcement came out
Gamble: And so you started as interim CIO?
Milligan: That’s correct. I was in the interim role from January to early April.
Gamble: Was it understood that the ‘interim’ part of the title was temporary?
Milligan: Yes. He told me straight up, which I appreciated. I also told him at the time, ‘this is a chance for you to try me out, but it’s also a chance for me to try you out.’ From a career trajectory perspective, I was headed toward the CIO position; I wasn’t sure if this was the right place, for a variety of reasons. And so I said to him, ‘if this doesn’t work out, we shake hands and part ways as friends, and we move on.’
Gamble: Coming from that approach, does it take the pressure off somewhat?
Milligan: I think so. Remember, this was his first big decision. He’s coming in as CEO, and the person who had been the CIO for 24 years is now gone. He reports to the board, and so they’re going to look closely at his decisions, especially in the very beginning. They’re going to be questioning everything, and it’s a big deal for him to get this right. But I really appreciated how he navigated that scenario.
Gamble: What was your approach in stepping into the CIO role?
Milligan: Probably the biggest word that comes to mind is humility. I had to be more honest with myself than I’ve ever been in my professional career, to size up what I do really well and in what areas I’m lacking. I tried to seek input from people I know would be honest, and not just tell me what I wanted to hear.
I spent the first week or two trying to understand what I do bring to the table and what I don’t. Once I categorized those things, I approached the CEO and said, ‘Look, I’ve assessed the situation briefly and I have an idea of what my strengths and weaknesses are for this role. And I’m going to need your support in shoring up some of those weaknesses.’
One of the weaknesses was finance — being able to look at the budget and identify whether we’re truly adding value, or if we’re just adding products; making sure we’re as efficient as we can be; and making sure we’re not wasting money.
I don’t have an MBA, so this is going to be new to me. I’m a fairly practical person, and I’m very budget-conscious, but it’s still a lot of new concepts, new ways to look at numbers, and new things to consider. And so I asked for a part-time financial person to work with me, particularly as I prepared for budget season.
One of the advantages of being in an industry for a while is you get to know a lot people, and you have a lot of friends you can reach out to. I reached out to Cort Garrison, who is VP of Informatics at OHSU (Oregon Health and Science University). He had worked with Pam Tucker, a CPA who’s focused on healthcare and IT finances. She and I connected, and it’s been a marriage made in heaven. She’s awesome. We get along great. She has provided a lot of insight into how we allocate our resources.
We just closed budget season last week, and my team collectively told me it was the best budget season they can remember. It’s usually a very painful experience, but we were able to navigate that really well.
The second thing I asked for right out of the gate was a CIO coach. Not a professional coach; but someone who has been a CIO. Someone who’s done this work before and who knows the big piles of mud you can step in, and how to navigate them.
Gamble: How did you go about finding a CIO coach?
Milligan: I reached out to Bill Russell, and he said yes. I’ve admired his work for a while. I enjoy watching the video interviews he does, and so I figured I’d start there.
Gamble: Are there certain topics or areas that you discuss with him? How does that work?
Milligan: A lot of it was navigating politics, and looking at how to frame things. With the budget, for example, it really took the combination of Pam on the numbers side, and Bill on the strategy side. Pam could shore up the numbers so I knew exactly what they were, and Bill could help me think about the numbers in a way that would allow me to present a story to the key people, so that the numbers don’t get buried behind other numbers. Having that team, I was able to navigate much better than I otherwise would’ve been able to.
Gamble: Going back to the budget, what you think was the biggest factor in achieving that success?
Milligan: A few things come to mind. Finance folks like to look at run-rate — basically the current fiscal year’s spend, which has been extrapolated to the next year. So if your run rate is $50 million, why does your budget for the next year say you need $66 million? The run rate is always lower than the budget, for several reasons. One is that we have asymmetric purchases. Another is we generally have a number of people who leave the organization; there’s always an absence rate of 5 or 6 percent.
There are a lot of reasons why it would be lower. I felt that this metric didn’t fully capture the ITS financial picture, but I had to be delicate about it. And so, after speaking with some friends in the industry, I came back with a different metric. I said, if you care about us hitting a 3 percent market, then what’s really important is that IT doesn’t outspend the rest of the organization consistently.
A better metric is, what is ITS’ spend over the entire operational spend? What is that percentage? I went back four years, and each of those years it was either 4.8 or 4.9. My budget was coming in at 4.5, and so I was able show pretty clearly, using numbers they provided me with, that our current budget is significantly lower that it has been historically, despite the fact that I’m way above the run rate.
I found that to be a very effective conversation tool; it was hard to argue with that.
The second thing I think was effective was to build a relationship with the CFO. Previously, the Finance & ITS departments didn’t enjoy a fully harmonious relationship. I realized that I have a job to do; we have to figure out a way to get along. And so I started meeting with them ad hoc. I set up some formal meetings, and then I was put on a committee with them, and I learned that we have a few things in common; I actually like the Finance people. We get along fine. Are there things they say that I don’t agree with yes? Yes, but I look at this way: they’re human beings doing their job.
I’ve found that being able to reframe the argument, and actually having a relationship with the people you have to negotiate with — that combination can be powerful.
Gamble: I can imagine. That’s not have things have traditionally been done with the CIO and CFO.
Milligan: Exactly. The third thing is, you really have to understand your numbers well, and you have to understand how things are calculated. For example, we had an executive team meeting right before the budget closed where the focus was on corporate spend: that’s HR, finance, and IT. The hospitals wanted to understand the underlying reasons for the ITS OpEx spend, because they get basically capped in order to pay for the corporate budget. They wanted to understand, what are we spending money on?
A variety of leaders asked me very critical questions about the IT spend for a good 45 minutes. A CEO of one of the entities said, ‘I see you’re adding 19 new FTEs going into fiscal year 2020.’ I paused and said, ‘before we talk about the add, let’s talk about how that number is calculated.’ It’s calculated based on a snapshot in April. They look at that snapshot and compare it to what the FTE is going into 2020.
Well, there are three different components to that. The first is, at the time, we had 13 vacancies, which is about 5.5 percent of my total FTEs within IT, and that’s the industry average. The next three are folks who were hired, but they were budgeted to start after the middle of the fiscal year.
The third bucket is folks who were hired new in 2019. They went through all the proper channels, including our physician control board, which includes our CFO. When you factor all of that in, there’s actually nobody new for 2020. It just goes to show, you can’t just accept these statements at face value. You have to go back to how we calculate these numbers.