Enterprise systems in healthcare: leveraging what we know from other industries

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Dr. Carol Brown - distinguished professor at Stevens Institute of Technology , The Howe School of Technology Management
enterprise systems in healthcare: leveraging what we know from other industries

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Enterprise systems in healthcare: leveraging what we know from other industries

  1. 1. Confenis 2012 – IFIP WG 8.9 International Conference on Research andPractical Issues of Enterprise Information Systems Enterprise Systems in Healthcare: Leveraging What We Know from Other Industries Carol V. Brown, Ph.D. Stevens Institute of Technology carol.brown@stevens.edu September 20, 2012
  2. 2. Stevens Institute of Technology•Established in the 1860s as an Engineering School•Most famous graduate: Frederick Winslow Taylor (Theory of Scientific Mgmt)• c. 2,300 Undergraduate Students from 41 states and 50 countries Howe School (Business), Engineering, Sciences, Arts & Letters• c. 3,000 Graduate Students (MS, ME, MBA, PhD)• c. 220 Full-time Faculty Campus on 55 acres in Hoboken, New Jersey Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 2
  3. 3. Personal Introduction Educator MBA, MS in IS, PhD programsIT Management – including Healthcare IT Textbook co-author – Pearson, 7th ed. Researcher Topics of interest to IT Executives ERP research beginning in mid-1990sField survey & interview research methods Journal EditorEditor-in-Chief, MIS Quarterly Executive Technology Editor, MDAdvisor Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 3
  4. 4. MIS Quarterly ExecutiveEditor-in-Chief www.misqe.org• Carol V. Brown, Stevens Institute of TechnologySenior Editors• Omar El Sawy, University of Southern California• Blake Ives, University of Houston• William Kettinger, University of Memphis• Dorothy E. Leidner, Baylor University• Jeanne Ross, MIT Sloan School of Management• Leslie Wilcocks, London School of Economics & Political Science• Philip Yetton, Australian School of BusinessEditorial Board Members = peer reviewers• c.50 academics experienced in conducting practitioner researchAssociation Sponsors• AIS and Society for Information Management (SIM)Primary mission: the transfer of knowledge based on rigorous research that is immediately relevant and useful for practice. Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 4
  5. 5. Why Collaborate on Healthcare IT * Research ?#1: Historically, a laggard in IT investments – including enterprise systems with integrated modules#2: Healthcare sector is a major component in global economy*IT for Healthcare Delivery Organizations, which include Hospitals (acute care,inpatient), Physician Practices (ambulatory, outpatient), long-term care facilities, etc. Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 5
  6. 6. Why Collaborate on Healthcare IT Research ?#1: Historically, a laggard in IT investmentsIn 2003 in U.S.: average IT expenses across all industries = 3.9% In 2007 in U.S.: average IT expenses by hospitals = 2.6% • hospital size (=number of hospital beds) IT = 1.86% for 1-100 beds IT = 3.87% for 501-600 beds • rural versus urban locations IT = 1.81% for rural IT = 2.67% for urban (Source: HIMSS Analytics 2008) Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 6
  7. 7. #1: Historically, a laggard in IT investments Source: 2007 MGH Institute of Health Policy, IHP Study; DesRoches, et al., NEJM, July 3, 2008 In Physician Minimally Fully Functional Practices Functional EHR EHR System Total In U.S. (clinical notes; record pharmacy, lab and imaging results) Size1-3 doctors 7% 2% 9%4-5 doctors 11% 3% 14%6-10 doctors 17% 6% 23%11-50 doctors 22% 8% 29%More than 50 33% 17% 50%doctors Total 13% 4% 17% Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 7
  8. 8. IT Investments in Other Industries: 1990s - Today Information Technology Types of Software Applications Early 1990s Portable computers (with mouse input) • PCs with Windows operating systems Graphical user interfaces (Windows) • Suites of integrated apps for knowledge workers (MS-Office) Local area networks connect desktop computers • Network operating systems enable multi-user sharing of apps, data, printers Mid-1990s and Later Enterprise systems with centralized Suites of integrated software apps to support databases and client/server architectures multiple departments and cross-unit workflow (ERP, CRM, SCM) • Data repositories and analytic tools for  Executive information systems and decision “business intelligence” support tools using integrated databases  Easy-to-use Web browsers  WorldWideWeb (WWW) standards (URL,  E-commerce websites by dot-com (online) & HTML, IP protocol) traditional firms  Web 2.0 applications Organizational use of social networking tools Smart phones and tablet computers  Small, downloadable software “apps”8 Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 8
  9. 9. Packaged Software for Hospitals: Enterprise Systems for Operational EfficienciesAdministrative Systems ERP vendors (like SAP)• Financial Management – Accounting/Finance – Materials Management – Decision support (including budgeting support, Executive Information Systems)• Human Resources – Payroll – Benefits management – Personnel management)• Payment Systems – Claims/billing Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 9
  10. 10. Packaged Software for Hospitals: “Best of Breed” Applications by Niche VendorsClinical Systems Not ERP vendors• Electronic Health Records – Patient Record (Electronic Medical Record) – Order Entry with Decision Support  CPOE with Decision Support – Physician Documentation• Nursing – Staffing, Scheduling, Medication administration)• Health Information and Document Management – Charting, Dictating, Encoding, Transcribing, Forms Management• Ancillary Departments – Emergency Department, Intensive Care – Lab, Radiology – Pharmacy• Operating Room (Surgery)• PACS (Imaging) – Radiology, Cardiology Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 10
  11. 11. Why Collaborate on Healthcare IT Research ?#1: Historically, a laggard in IT investments – including enterprise systems with integrated modules#2: Healthcare sector is a major component in global economy Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 11
  12. 12. Healthcare Spending in U.S. as % GDP Healthcare costs = 16% of U.S. GDP by 2006 Healthcare costs >18% of U.S. GDP by 2012 Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 12
  13. 13. Healthcare Spending per Capita in Developed Countries McKinsey&Company, Dec 2008 Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 13
  14. 14. Two Universal Healthcare GoalsCostsReduce growth rate Quality Improve Patient outcomes (& reduce medical errors) Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 14
  15. 15. Two Universal Healthcare Goals + 3rd U.S. Goal 40+ millionCosts UninsuredReduce growth rate In U.S. Quality Improve Patient outcomes (& reduce medical errors) Patient Access to Provider Physically accessible (& financially affordable) Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 15
  16. 16. Health Care System Models (Reid, 2009)• Bismarck model – Provider = Private – Payer = Private• Beveridge model – Provider = mostly Gov’t – Payer = Government• National Health Insurance – Provider = Private – Payer = Government• Out-of-Pocket – Provider = Private (in cities) – Payer = Patientby Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 Prepared 16
  17. 17. U.S. System• Bismarck model – Provider = Private If employed…. – Payer = Private By Employers who subsidize Healthcare insurance; may Include $$ deductibles• Beveridge model – Provider = mostly Gov’t If military veteran – Payer = Government Serviced by Veterans Health Administration (VHA)• National Health Insurance – Provider = Private If over 65 Medicare – Payer = Government If classified as “poor” Medicaid• Out-of-Pocket – Provider = Private (in cities) Uninsured patient – Payer = Patient Est. 40 Million under age 65 Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012
  18. 18. Two Universal Healthcare Goals + 3rd U.S. GoalCosts Affordable Care Act 2010Reduce growth rate [“Obamacare”] Quality Improve Patient outcomes (& reduce medical errors) Patient Access to Provider Physically accessible (& financially affordable) Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 18
  19. 19. Affordable Care Act (2010) Patient Protection and Affordable Care Act also referred to as “Obamacare”DateIn effect Increased age for “child” under a parent’s plan2013 New “caps” on coverage and insurance payments New Pharmaceutical company taxes, more drug subsidies New Medical Device company sales tax2014 INDIVIDUAL MANDATE: Federal Tax (penalty) for Individuals with No insurance coverage EMPLOYERS: Penalty if 50+ workers and No health insurance PRIVATE INSURERS: No caps on annual or lifetime $$; cannot drop individual for pre-existing condition or charge more STATES: Must establish a health insurance “exchange” for individuals & small employers to purchase insurance plansetc…. NOT upheld by Supreme Court (June 2012): STATES must accept new Federal definition of Medicaid eligibility (which would increase Medicaid roles by about 17 Million people) Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 19
  20. 20. Other Recent U.S. Legislation: HITECH ActCosts Affordable Care Act 2010Reduce growth rate [“Obamacare”] Quality Improve Patient outcomes (& reduce medical errors) Patient HITECH Act of 2009 Access $19.2 B for Electronic Health Record to Provider Adoption Physically accessible (& financially affordable) Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 20
  21. 21. HITECH Act (2009) The HITECH Act: Some Specifics Part of the American Recovery and Reinvestment Act (ARRA)* * Economic stimulus package• $19.2 billion for Electronic Health Record adoptions An electronic record of health-related information on an individual that conforms to nationally recognized interoperability standards and that can be created, managed, and consulted by authorized clinicians and staff across more than one healthcare organization. -patient demographics -medications -existing conditions & progress notes -vital signs -past medical history -immunizations -laboratory data & radiology reports Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 21
  22. 22. HITECH Act (2009) The HITECH Act: Some Specifics Part of the American Recovery and Reinvestment Act (ARRA)* * Economic stimulus package• $19.2 billion for Electronic Health Record adoptions – To receive payments: Certified EHR software package installed including CPOE module with DSS Demonstration of achieving “Meaningful Use” (MU) of EHR over 3 consecutive stages Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 22
  23. 23. CPOE: Computerized Physician Order Entry An EHR module in which healthcare providers enter patient orders—such as medications, diagnostic tests, discharge instructions –which can be distributed without transcription to those responsible for carrying them out or monitoring their completion. Orders are captured as structured data: data elements are retrieved from order sets with established names in an electronic database …NOT entered into systems as free text Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 23
  24. 24. CPOE Module: Difficult to Implement Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 24
  25. 25. HITECH Act (2009) The HITECH Act: Some Specifics Part of the American Recovery and Reinvestment Act (ARRA)* * Economic stimulus package• $19.2 billion for Electronic Health Record adoptions – To receive payments: Certified EHR software package installed including CPOE module with DSS Demonstration of achieving “Meaningful Use” (MU) of EHR over 3 consecutive stages Incentive payments disbursed via CMS in HHS (Medicare and Medicaid) Max. $44K - $63K for Eligible Physicians Max. $2M + per-discharge amount for Eligible Hospitals & future reductions in payments if not an EHR adopter [in future] Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 25
  26. 26. “Meaningful Use” Criteria increase over 3 stages (multi-year periods)* * August 2012: Stage 2 criteria released & some time period adjustments •Disease management •Improvements in outcomes •Clinical decision support (quality, safety, efficiency)• Electronic capture of structureddata •Medication management •Decision support for national•Tracking key clinical indicators high priority conditions •Transition in care •Patient self-management tools• Care coordination •Quality measurement and research •Improving population health• Reporting for clinical quality outcomesand public information • Bi-directional public health Stage 1 Stage 2 Stage 3 Data Capture Advanced Clinical Improved and Sharing Outcomes 2011-2012 Processes 2015-2016 2013-2014 Source: Medical Informatics: An Executive Primer, 2nd edition, 2011 Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 26
  27. 27. Example: Medicare payments to eligible Physicians Maximum2010 2011 2012 2013 2014 2015 2016+ Incentive Stage 1 Stage 1 Stage 2 Stage 2 Stage 3 Stage 3 $44k $18k $12k $8k $4k $2k $0 Stage 1 Stage 1 Stage 2 Stage 3 Stage 3 $44k $18k $12k $8k $4k $2k Stage 1 Stage 2 Stage 3 Stage 3 $39k $15k $12k $8k $4k Stage 1 Stage 3 Stage 3 $24k $12k $8k $4k Stage 1: Data capture and sharing Stage 2: Advanced clinical processes Stage 3: Improved Outcomes Source: Medical Informatics: An Executive Primer, 2nd edition, 2011 Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 27
  28. 28. HITECH Act (2009) in U.S. Part of the American Recovery and Reinvestment Act (ARRA)– $19.2 billion for Electronic Health Record adoptions Regional Extension Centers (to facilitate EHR adoption by eligible physicians)– $$ millions allocated for: Healthcare Information Exchanges (state & regional networks)– Office of the National Coordinator for Healthcare IT Permanent position within the Health and Human Services (HHS) department with roles for executing HITECH Act Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 28
  29. 29. Why collaborate on Healthcare IT research ?#1: Historically, a laggard in IT investments#2: Healthcare sector is a major component in global economy, and HIT is a major enabler of 2 universal healthcare goals#3: Historically, not a mainstream IS research context, but we have 2 decades of ES research in other industries Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 29
  30. 30. Leveraging what we know from Enterprise Systems Research in Other Industries• Organization Level – Key Drivers (benefits sought by the organization)• Project Level – Initial Implementation Projects (usually up to Go-Live)• Program Level – Multi-stage Enterprise System Cycle (includes after Go-Live) What’s the Same and What’s Different for a Healthcare Delivery Organization Context? Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 30
  31. 31. ERP Benefits Sought by Other IndustriesInitial Internal Drivers New Millennium Internal• Enable cross-functional & External Drivers business processes• Leverage modern • Enable global operations technology platforms and • Enable information sharing centralized database for across business partners improved data access (external supply chain with• Configured for “best suppliers & customers) practices”• Ability to integrate data for • “Jump on bandwagon” decision support and/or “options” investingExternal Driver –• Avoid Y2K costs Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 31
  32. 32. EHR Benefits Sought by Healthcare IndustryInitial Internal Drivers Additional Internal & External Drivers• Enable cross-functional clinical workflows • Enable information sharing• Leverage modern across other healthcare technology platform and stakeholders (suppliers, centralized database for insurers/payers, patients, improved data access government)• Configured for “best clinical practices” • Government mandates• Ability to integrate data for (& HITECH incentives) decision support Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 32
  33. 33. Understanding the Healthcare Context:• Organization Level – Key Drivers (benefits sought by the organization) Healthcare Industry: What’s Different: Government role Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 33
  34. 34. Leveraging what we know from Enterprise Systems Research in Other Industries• Organization Level – Key Drivers (benefits sought by the organization)• Project Level – Initial Implementation Projects (usually up to Go-Live) Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 34
  35. 35. Enterprise System ProjectsERP early adopters EHR early adopters• ERP suites of integrated • EHR suites of integrated modules to replace modules to replace “functional silos” (often “functional silos” (usually custom legacy systems) best-of-breed packages)• Heavy reliance on 3rd-party • Heavy reliance on software “implementation partners” vendors and internal staff by early ERP adopters (not consultants) (Fortune 500, Global 1000) • Publicized failures by major• Publicized failures by major health systems (EHR companies (EHR suites) suites, CPOE modules) Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 35
  36. 36. Leveraging what we know from Enterprise Systems Research in Other Industries• Organization Level – Key Drivers (benefits sought by the organization)• Project Level – Initial Implementation Projects (usually up to Go-Live) Critical Success Factors (CSF)* Research * What “must go right” for Initial Implementation Projects Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 36
  37. 37. Critical Success Factors (CSF) Research EXAMPLE: Brown and Vessey, MIS Quarterly Executive, 2003 – research based on ERP case studies in Manufacturing firms#1: Top management is engaged in the project, not just involved.#2: Project leaders are veterans, and team members are empowered as decision makers.#3: Third parties fill gaps in internal expertise and transfer their knowledge.#4: Change management goes hand-in-hand with project planning and includes people & process changes, not just system changes.#5: A satisficing mindset prevails for customization and rollouts – initially, as well as when unanticipated events occur. Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 37
  38. 38. Critical Success Factors (CSF) Research Comparative analysis with award-winning EHR implementation projects *#1: Top management is engaged in the project, not just involved.#1: Key physicians are committed to and “engaged” in the project#2: Project leaders are veterans; team members empowered as decision makers.#2: Project leaders and team members are trusted by other clinicians & hospital staff#3: Third parties fill gaps in internal expertise and transfer their knowledge.#3: Software vendors and other IT service providers/consultants fill skill gaps#4: Change management goes hand-in-hand with project planning and includes people & process changes, not just system changes.#4: Planning for workflow changes and training are organization-specific#5: A satisficing mindset prevails for customization and rollouts#5: A “satisficing” mindset prevails for adjusting plans as needed *For paper presented by C.V.Brown at HIMSS pre-conference academic workshop, contact author. Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 38
  39. 39. Understanding the Healthcare Context:• Project Level – Initial Implementation Projects (usually up to Go-Live)  Critical Success Factor research Healthcare Industry: What’s Different: - Dual administrative role in hospitals (staff administrators & chief medical officers) - Heavy dependence on Physicians for Champion roles, project leadership, workflow redesign, order sets - Traditional reliance on niche software - Quality delivery for acute care delivery takes precedence over operational efficiencies Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 39
  40. 40. Learning from Other Industries: Enterprise Systems Research in Healthcare• Organization Level – Key Drivers (benefits sought by the organization)• Project Level – Initial Implementation Projects (usually up to Go-Live)• Program Level – Multi-stage Enterprise System Cycle (includes after Go-Live) Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 40
  41. 41. The ERP Journey: 5 Stages Ross, SIM-Seattle; Ross, Vitale and Willcocks, 2003Based on ERP case studies from late 1990s: Continuous Improvement Design Stabilization Implementation-“Go Live” (initial Implementation) is analogous to “diving off a cliff” into the water, and thenattempting to “resurface” before running out of breath (Stabilization).- Once a stable state is reached, a Continuous Improvement phase begins, which is aprecursor to achieving the organizational Transformation benefits that are the “ERP promise.” Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 41
  42. 42. 4-Phase Enterprise System Experience Cycle Markus and Tanis, 2000Based on ERP case studies from late 1990s- Problems in achieving success in later phase(s) may have roots in an earlier phase –but it is possible to achieve goals in spite of earlier mistakes (or even an early failure). Phase I Phase II Phase IV Phase III Project The Onward Chartering Project Shakedown and (configure Upward & rollout) Project Chartering includes documenting current business processes, analyzing for potential improvement, comparing processes with embedded “best practices” in ERP software, selecting software, and planning the rollout (modules, business units) The Project includes Design and Implementation Shakedown includes Stabilizing = getting to normal operations Onward and Upward includes Continuous Improvement (also with new versions) Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 42
  43. 43. Why Collaborate on Healthcare IT Research ?Four types of prior IS research in a Healthcare context*: #1: IS theory without consideration of healthcare context #2: IS theory with some consideration of healthcare context #3: Healthcare context using IS theory to explain phenomena #4: Healthcare context without consideration of IS theoryType #3 research has the potential to significantly contribute new knowledge – to academics and practitioners – because it takes into account how the healthcare industry differs from other industries. *Source: Chiasson & Davidson, 2004 Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 43
  44. 44. What else is Different from Other Industries ? Enterprise Systems Research in Healthcare• Software Maturity Curve: “Mature” for ERP, but not Healthcare ES Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 44
  45. 45. Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 45

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