Q&A with CIO Pamela McNutt: “Deliberate Growth,” Being Financially Focused & Looking for ‘Gotchas’

Since Pamela McNutt first became CIO at Methodist Health System back in 1993, the role itself, along with the industry, has undergone a significant transformation. “When I got here, IT was doing basic automation of administrative functions,” she said in a recent interview with Kate Gamble, Managing Editor of healthsystemCIO. Now, CIOs are seen as consultants who must have a wide range of knowledge on everything from cloud computing to finances to contract negotiations.

It’s a big change, and one that she believes “is only going to get more dramatic” in the coming years.  And McNutt, who has been recognized numerous times as one of the most influential leaders in healthcare IT, is up for the challenge. During the discussion, she talked about what it’s been like to serve the same organization for so many years—and what has kept her at Methodist. McNutt also shared insights on the major transformations her team has led; the “herculean efforts” during the pandemic; why CIOs need to be “financially focused,” and the value of being involved in advocacy work.

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Key Takeaways

• On growing from the ground up: “We very carefully select sites for growth, and then build new hospitals in emerging communities. We’ve been very successful with that.”
• On Methodist’s binding culture: “You can tell pretty quickly if somebody really doesn’t believe in and isn’t engaged in our culture and our mission. They generally don’t last very long.
• On standardization as a foundation: “my helpdesk can so quickly and accurately address a need on one of their devices because of the great deal of standardization that we’ve done and the tools we’ve put in place. What we’re contributing to the organization is that rapid response.”
• On “heroic” efforts during Covid: “What struck me was how they would do anything to make sure patients who were isolated from their families could make contact with them through electronic means. It was quite a passion for my teams to get that done.”
• On being financially focused: “You have to have a broad grasp of the financial impact of your operations. You have to be able to guide other people as they’re looking at proposals for a system, or a program that has an IT component.

Q&A with Pamela McNutt, CIO, Methodist Health System

Gamble:  First off, congratulations on 30 years. That’s really remarkable.  I don’t have to tell you that in this industry, being in the same organization is amazing.

McNutt:  That’s true. It is unusual. I know from how many people I’ve known in the industry, there are some – like I think David Weiss had 30 years before he retired at Barnes-Jewish Christian, but it’s not very common.

 

“Deliberate” growth & conservative finances

Gamble:  No, certainly not. So, I’d like to talk about the organization has evolved over the years, as well as your role. When you have the type of growth Methodist Health has had in recent years, I would think that comes with challenges. You have to make sure it’s done in a sustainable way. Has that been a very deliberate approach?

McNutt:  Yes, we are very deliberate about it. A few of our hospitals have been added through acquisition, and then others we’ve grown from the ground up. We’re probably best at growing from the ground up. I think that’s been a great testament to Methodist; we very carefully select sites for growth, and then build new hospitals in emerging communities. We’ve been very successful with that.

But we are very deliberate in everything we do. I think that serves us very well.  For many years, we’ve always been very conservative financially. We weigh everything very carefully from a financial standpoint — not just growth, but how we manage our operations.

 

“It was all an evolution”

Gamble:  That’s tremendously important. When you first took on the CIO role, obviously things looked a bit different. From an IT standpoint, when was the first major kind of change?

McNutt:  It was all an evolution. This was before EHRs, but people were starting to do more than just billing and registration systems. They were implementing nursing systems and automated pharmacies, labs, and radiology, and tying things together with interfaces. That era when all of that was starting was when I came onboard.

One of the first things we needed to do was to upgrade or revamp some of those systems to move into what at that time was the modern era of nursing documentation with integrated labs, pharmacy, and radiology.

 

Gamble:  So you jumped into that right away?

McNutt:  Yes, exactly. And this may sound funny, but another big priority was basic office and email automation. This was during the beginning of emails and basic automation of administrative functions.

 

Standardization as a core principle

Gamble:  That’s huge. And I imagine some really big workflow changes.

McNutt:  Well, if there’s another thing Methodist has been really good at, it’s developing standards. That has worked well for us. From an IT perspective, I can run a lean IT shop; I also have biomedical engineering, which runs in a lean and cost-efficient way.

The secret is also a great deal of standardization, whether it’s a workstation, software, or biomedical equipment. That’s been a strength of ours for many years. We started out with two hospitals. Luckily, as we grew, we kept that discipline of having standards. That has served us very well over the years in being cost effective.

 

A “systematic” strategy for standardization

Gamble:  Does it get difficult at times to maintain that?

McNutt:  Yes. When you do an acquisition, one of the questions is always, ‘can’t we keep some of the stuff we currently have?’ Some things you can. Maybe it’s not your standard for CT scanners but it’s working fine, so you’re not going to replace it.

There is a systematic, precision-driven look at what we do or don’t replace. In all, I’ve had four different CEOs; and all of them, as well as the two CFOs, have all been incredibly supportive, along with our COO — a position that was created probably 15 years ago.

They have all been incredibly supportive as far as maintaining these standards. And we have a forum to discuss things. If a hospital has a reason they want to deviate from a standard, we have some ways they can express their opinions, and then we all decide whether it’s something we’re going to do or not.

 

Managing change requests

Gamble:  I’m sure that can get interesting at times.

McNutt:  It’s just incredible, the amount of support that we have from leadership, including all of our hospital presidents. It’s probably difficult sometimes for them, but they understand that we have standards, and we will change standards from time to time. If they’re very passionate about something, maybe it’s time to look at changing a standard and get everyone to understand the merit that you’re seeing in some new product or some new modality in the biomed world, for example.

At Methodist, our culture is very binding, in a good way. People here refer to this as their ‘Methodist family.’ That’s all part of the culture too — marching toward the same mission which, at the forefront, is around what’s right for the patient. We’ve kept that in mind over all these years; that’s what keeps Methodist moving in a positive direction. For me, it makes it fun and rewarding to work here.

 

Methodist’s “binding” culture

Gamble:  When you say binding though, what do you mean by that?

McNutt:  We take culture very seriously here. I’ve learned over the years that you can tell pretty quickly if somebody really doesn’t believe in and isn’t engaged in our culture and our mission. They generally don’t last very long. Occasionally you’ll see people who are here a year or two and leave. And then you’ll see a whole bunch of us who have been here 15, 20 or 25 years. That’s what the binding piece is; people are bound to the Methodist culture because we’re so mission-focused. Our senior executives and our board are all very supportive of this. You’ll see a lot of the same longevity and dedication to Methodist in our board as you’re going to see in our executive and other management ranks. It’s a special place.

 

One unified record

Gamble:  Certainly. I would imagine having that framework played a role once it was time to move to EHRs and other forms of automation.

McNutt:  It did. We’ve made a couple changes to our EHRs over the years. They’ve all had a good run, like 10-plus years. But when we started really expanding our footprint in our medical practices and really growing our Methodist Medical Group and bringing in more physicians and specialists — and as we grew our hospitals — it became apparent that we really needed a totally integrated EHR so that we could have one unified record, which is the right thing for our patients. And of course, that’s also very helpful to our physicians and caregivers to have that unified view. That became a strategic priority for us in 2015. That’s when we moved to a unified electronic record between our divisions.

 

Gamble:  I’m guessing that was a pretty significant undertaking.

McNutt:  It was huge, but it’s been so rewarding. We were on the same journey as so many other health systems around that timeframe where people were making the decision to move to a unified electronic record platform. It was also right after the era where we really needed to get to interoperability, working to share data with other electronic record systems so it all fell into place. It was a modernization campaign.

We’ve been on Workday for about a year now. That was a similar initiative where we were unifying the components of our administrative, payroll and HR systems into one platform.

 

“We know why we’re here”

Gamble:  So there’s a blueprint in place when it comes to these big initiatives, which makes a big difference, along with having the right people in place.

McNutt:  Yes. Having the right people is extremely important when you undertake a project of that size, particularly with our EHR deployment from 2015 to 2017 where we went to Epic. The unification of all the areas that came together to do that was truly amazing. I think it’s why we were very successful in our Epic implementation. Because of the leadership that came to the table, both at a higher level and also at my level with my peer that were a part of this Epic journey, it just went so smoothly. We were all in lockstep together.

It goes back to the Methodist culture. We all know why we’re here; it’s to do the right thing for our patients, our physicians, and our colleagues.

 

The “chaos” of Covid-19

Gamble:  Looking back at Covid, there was a tremendous amount of change. Can you talk about how your team go through some of the biggest hurdles?

McNutt:  Probably the biggest initiative for us was rolling out the vaccine. We were one of the first in the country to receive the vaccine in December of 2020. We received the shipment and were the first to get it out. It was very chaotic figuring out who was going to get what and when, and how to begin to roll that out in a non-chaotic fashion to everyone who needs it. The population that could receive it grew quickly; all of a sudden, we were rolling it out not just to patients, but to other family members and employees. Then it went even further to include community clinics. We had to come together quickly to figure all that out, whether it was setting up an auditorium or an auxiliary emergency department outside one of the hospitals. We also had to figure out how to do things like self-scheduling for patients to get the vaccine.

One thing that really impressed me was the teamwork that went into place. With IT in particular, what really struck me was how they would do anything to make sure patients who were isolated from their families could make contact with them through electronic means. It was quite a passion for my teams to get that done. It was a very extraordinary time. I won’t forget all the efforts that were done in the background to keep things moving.

And also, let’s not forget we had to figure out with 24 hours’ notice how to get the majority of our non-clinical workforce working from home. There were so many heroic efforts and Herculean efforts went on during that timeframe. I’m sure we’ll all be proud of them for the rest of our lives.

 

IT’s “rapid response”

Gamble:  I think that for IT teams, the pandemic and all of the efforts around it presented an opportunity to demonstrate a connection to patient care that maybe isn’t always visible. It was really encouraging to see the impact IT can have.

McNutt:  Exactly. The telemedicine aspects of bringing in specialists in when they couldn’t be there physically and enabling patients to have televisits to meet their healthcare needs — everything that was done. It was very rewarding to have that big of an impact.

What the average person in a clinic or in a nursing unit doesn’t understand is that my helpdesk can so quickly and accurately address a need on one of their devices because of the great deal of standardization that we’ve done and the tools we’ve put in place. What we’re contributing to the organization is that rapid response. They don’t appreciate or understand everything that goes into place to make that be possible.

 

Gamble:  Right. So obviously, the CIO role has changed so much and evolved so many times over the years. What do you think is the most significant way in which it has changed?

McNutt:  When I got here 30 years ago, IT was just automating some things. Fast forward to where we are today, and it’s amazing what has happened. And it’s only going to get more dramatic, as almost everything has some type of IT component to it. That’s why I have biomedical engineering, because almost everything you do in biomed now has an IT component.

You could say the same thing about other areas. Whether it’s an IT component you’re running in house, or a software-as-a-service tool that a department wants to have, we still get heavily involved because of the security aspect. Security, as you know, has been front and center for the last five years. That’s getting even more intense, and so, we’re very much appreciated for our ability to look at the security aspects of cloud computing or software as a service that people want to purchase.

From hosts to consultants

Within IT, we’re not only seen as the folks that hosts things; we’re also seen as consultants to help in this new world of cloud computing. For instance, we implemented Workday for our ERP, which is completely cloud hosted. That’s the way things seem to be going, and it’s up to us to make sure all of this is safe and secure, and that we can deliver it properly and with a seamless sign-on experience.

We’ve become more of a consultant. The interesting thing is that because we do have our fingers in so many pies, my team has a very broad knowledge of a lot of subjects beyond the basics of IT. With something like hospital-at-home, there is a technology aspect to it, but there’s also knowledge about billing requirements, supplies, and other areas. Because of all the systems we’re involved in, many of the staff have a broad knowledge of operations, which I think then adds to the value of the CIO.

 

Being “financially focused”

Gamble:  That has become so important.

McNutt:  Yes. And it’s not just processing things anymore. As a CIO, you’re deeply involved in clinical and other operational aspects. Another thing that has contributed to my success is being very financially focused. I was a business major, and I had a strong background in finance. That’s really key for a CIO.

Now, you may have someone who does more of the day-to-day financial things in IT, but you have to have a broad grasp of the financial impact of your operations. You have to be able to guide other people as they’re looking at proposals for a system, or a program that has an IT component. You have to be able to provide guidance on the financial aspects of it as well. That’s a skill set that CIOs really should bring to the table.

It’s making sure everyone on the senior team, including the CFO, trusts your judgement. If you say, ‘I looked at this Epic conversion and I feel like these numbers are correct as far as how much it’s going to cost, and I know we can meet those numbers and have accurate budgeting,’ you’re able to build trust and make there are no big surprises.

For me, it’s been essential to gain the confidence of the entire C-suite executives, and to have the financial prowess to manage large scale projects.

 

The “win-win” with advocacy work

Gamble:  You’ve been involved in policy work throughout your career. I’m sure that has been pretty beneficial.

McNutt:  It’s been very beneficial to me. I find it interesting. And when I see a policy being put forth, and there’s some aspect of it that just doesn’t make sense, I want to speak up. I’ve done that with the CHIME Policy Committee and other organizations; we work with folks in Washington to make sure they hear our boots on the ground reactions.

That’s the way we tend to look at it. Whether it’s a regulation or a bill that’s being introduced, we provide our viewpoint. For example, ‘this aspect of this is great, we love it.’ Or ‘we love the intent, but here’s where it may not work in real life.’ Maybe it needs clarity. Maybe it needs a complete overhaul. I love doing that and seeing the results when we are able to help shape bills. It’s not necessarily about making them work well for us; it’s about making sure the bills or regulations that are being proposed actually achieve that goal.

We’re looking at what’s the right thing for our industry. For the patients and for the staff — if something isn’t going to work or it’s unsafe, we’re going to speak up. And yes, it does benefit my organization if I’m on top of those regulations so that we don’t have a misstep and get penalized, or miss an opportunity to get in on an incentive. It’s a win-win.

 

Gamble:  For sure. That’s great advice for people who want to step into the CIO role or a similar role.

McNutt:  I do think that when people know they can turn to you because you know policy and regulations, it gives you an extra set of credentials. But it’s not everybody’s passion.

 

Gamble:  But, like you said, so important.

McNutt:  Exactly. You don’t want to have the CFO come in and say, ‘can you explain to me why we took a penalty on promoting interoperability this year?’ and not be able to answer. The worst possible answer would be, ‘I don’t know.’

 

Mastering contract negotiations

Gamble:  And then probably the last really important attribute is being able to form relationships, especially for CIOs.

McNutt:  Yes. Another skill that CIOs need to have in their toolkit — and if you don’t, make sure you can augment it — is having prowess around contract negotiations and being able to help with legal matters (unless you are lucky enough to have a dedicated IT legal professional on your team, which most organizations don’t). You can partner with them on negotiations and making good business deals, and making sure you have language in contracts that protects you from unexpected outcomes where you get a big surprise in year 3 or 4 of a contract.

Even if you’re not a lawyer, it’s important to know your way around that and be able to participate in negotiations and at least know the business terms that you’re trying to negotiate. There are different business terms if you’re running stuff in-house as opposed to software as a service, and you need to understand those differences.

 

Gamble:  That’s really important. You want to make sure you’re getting the best value for all of these investments.

McNutt:  It’s also looking out for the gotchas when making proposals. When you’re making a big decision, like with an EHR, ERP or PACS system, for example, you have to make sure the contract language matches it. Like I said, you don’t want to find out that some aspect of your pricing expires in year 3 and that the rules change. We also have to understand, especially in the software-as-a-service world, what metrics you’re being held to and what the licenses and the costs track against. That’s really important.

 

Gamble:  Absolutely. Well, we’re out of time, but I want to thank you so much for speaking with us. This has been great.

McNutt:  Thank you, Kate.