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Final report - Industry Research: Health Care Delivery


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Researched features, processes and current trends in project management in Health Care Delivery culminating in a comprehensive 39 page report. …

Researched features, processes and current trends in project management in Health Care Delivery culminating in a comprehensive 39 page report.

Made recommendations to Health Care Executives to adopt certain approaches toward achieving excellence in IT project management.

Group received top score in class for both written and verbal presentation and defense of paper.

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  • 1. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare DeliveryHospitals/HealthcareDelivery –Group 3 Final Project Report: IST 700
  • 2. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare DeliveryTable of Contents I. Overview…………………………………………………………….3 II. Analysis………………………………………………………………6III. Discussion…………………………………………………………...14IV. Challenges…………………………………………………………..22 V. Recommendations………………………………………………….25VI. Lessons Learned……………………………………………………37VII. Bibliography……………………………………………………….38
  • 3. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare DeliveryOverviewThe hospitals industry includes firms licensed as general medical and surgicalhospitals that provide surgical and nonsurgical diagnostic and medical treatment toinpatients with medical conditions. Hospitals maintain inpatient beds and usuallyprovide other services such as outpatient services, operating room services andpharmacy services. The industry excludes psychiatric and other specialty hospitals.The hospitals industry is a huge industry that is made up of total annual revenues of$757b, with total profits of $18.2b in 2011 (Snyder, 2011). The annual growth for thehospital industry from 2006-2011 was 2.9%, which is really good because it withstoodthe recession. This number is projected to increase to 4.1% between 2011-2016, whichwill help revenues reach a total of $923.7b (Snyder, 2011).As you can see, the size of the hospitals industry is huge, with total revenuesreaching $757b. A peculiar issue is that even though with such high revenues, thehospitals industry profit margin is extremely slim with total profits of only $18.2b in2011. This shows us that the hospitals industry has very high expenses, which wouldexplain the slim profit margin. Total wages amount to a total of $290.9b in 2011,which shows us that wages roughly account for 38.4% of the total revenue (Snyder,2011).
  • 4. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare DeliveryEconomic TroublesThe recession in 2008 and 2009 only managed to moderately dampen industry sales.During this said recession, there were fewer people with health insurance coverage,which led to a lower demand for healthcare. However, hospitals treated moreuninsured and Medicaid patients in Emergency Rooms (ERs). The total number ofinsured patients in hospitals room shrank during this period, which explains thedeclining profit margin.Another problem that hospitals face is the shortage of employable persons. Hospitalsstruggle to recruit and retain qualified personnel because of insufficient and costlyeducation programs. As a result, wages as a percentage of revenue have risen,resulting in a total of 38.4% of revenues going to payroll expenses. This trend inwages is forecast to continue and grow more severe during the next five years, whichmay lead to a higher proportion of revenue being set aside for wages. This makes itvery important for IT to be improved in the industry, in order to help make workprocesses more efficient. This would allow hospitals to see more patients, whilespending less time, thus, helping revenues to grow, while keeping wages low withlower billable hours.ConsolidationOne thing hospitals are doing to counter high costs, is consolidating. This enablesthem to have better negotiating power with suppliers and payers. Most operatorsare also starting to close underperforming hospitals. During 2006-2011, hospitallocations were expected to decline at an average of 3.5% per year to a total number
  • 5. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Deliveryof 4833 hospitals nationwide (Snyder, 2011). Consolidation is also happening tocounter heightened competition from other healthcare providers. Consolidation isgoing to be a huge factor when IT comes into play, there will be needs for projectmanagement as hospitals are so fragmented with so many departments, andconsolidation will require data to be standardized, merged, and also secured to makeit accessible to the different hospitals that are now consolidated.Technology developments influence hospital efficiency. For example, computerizedsystems help with patient management and record keeping, and an extensive rangeof medical equipment enable tests to be performed quickly and treatment to bedelivered more accurately.Policies and GrantsHospitals can register and receive information technology incentive payments underthe Medicare and Medicaid programs. In 2011, hospitals have scrambled to implementand meaningfully use EHRs to qualify for Stage 1 federal clinical informationtechnology incentive payments under the American Recovery and Reinvestment Act(ARRA). The Act will provide $27b in payments over the life of the multiyearinformation technology incentive program (Snyder, 2011). The share of hospitals witha basic or a comprehensive EHR was 11.9% in 2009, but only 2.0% reported having EHRsystems that allowed them to meet the federal government’s meaningful-usecriteria. The researchers also found a widening IT divide opening between the digitalhaves and have-nots in this country.
  • 6. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare DeliveryThe Health Information Technology Economic and Clinical Health Act, part of theAmerican Recovery and Reinvestment Act of 2009, calls for hospitals to createelectronic health record (EHR) for every American by 2014. The funding is expectedto range between $9.7 billion and $27.4 billion and will be distributed over 10 years(Snyder, 2011). Hospitals that fail to comply by 2015 stand to lose 1% of their Medicarereimbursements. Almost $20 million in new technical support assistance provided bythe federal government will help critical access and rural hospital facilities convertfrom paper-based medical records to certified EHR technology.For our project purposes we interviewed two professionals from two healthcarefacilities i.e. Upstate Hospital, Syracuse and St. Jose Hospital in Syracuse. Below arethe names and designations of the two personnel.Susan Berry – Program Manager, Upstate Hospital, Syracuse, NYTom Haskel – Manager, Information Services, St. Joseph’s Hospital, Syracuse, NY
  • 7. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare DeliveryAnalysisIT and Business Strategy AlignmentThe information systems currently utilized by the health care organizations generallyfall into three main areas: transaction processing systems, management informationsystems, and decision support systems (DSSs). The healthcare IT projects typicallycomprise of new implementations or introducing reforms to the current IT portfolio.Typically in the healthcare industry IT has been treated as an expense rather than anenabler for enhancing business value. The below diagram is a holistic view of thecontext of IT projects in healthcare. As we can see there are few factors thatinfluence the IT projects in healthcare.This figure is adopted from “Why Have a Project Management Methodology in Healthcare” and “Howto Deliver Successful Projects”, A deliverable of the HIMSS Project Management Task Force January 7,2008
  • 8. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare DeliveryElectronic TransactionsA lot of electronic data is shared across multiple entities in the healthcare industry.One of the important trends is to move toward a universal electronic patient record.It could be defined as electronically stored health information about one individualuniquely identified by an identifier. This entails capturing, storing, retrieving,transmitting and manipulating patient-specific health care-related data, includingclinical, administrative, and biographical data. All the electronic transactions aresubject to the HIPAA (The Healthcare Insurance Portability and Accountability Act) of1996 when electronically conducting certain health care administrative transactions,such as claims, remittance, eligibility, and claims status requests and responses.Examples of electronic transactions include submitting claims that need to adhere tothe newly defined standards (Versions 5010, D.0 and 3.0). Electronic transactions alsoinclude sharing of large patient files across the organization for reference purposes.Following two major IT systems are being implemented industry wide. The hospitalsare implementing these IT systems in order to qualify for the Meaningful Use GrantFollowing two major IT systems are being implemented industry wide. The hospitalsare implementing these IT systems in order to qualify for the Meaningful Use Grant.Electronic Health Record (EHR)In general, technology advances allow the industry to streamline care, reduce fraudand reduce medical errors. Specifically, electronic health records (EHRs), systemsthat integrate electronically originated and maintained patient-level clinical healthinformation, have been a major and ongoing development in the industry. EHRs can
  • 9. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Deliverycombine information derived from multiple sources into one point of access. An EHRcan replace the paper medical record as the primary source of patient information.The use of EHRs is growing, albeit as a slow pace. A survey from the AmericanHospital Association found that 69% of reporting hospitals have either fully or partlyimplemented an EHR (Snyder, 2011). Larger hospitals, those in urban areas andteaching hospitals are more likely to be among those with implemented EHRs.Clinical guidelines for disease management have a demonstrated benefit whenaccessible within the electronic record during the process of treating the patient. A2005 report noted that medical practices in the United States are encounteringbarriers to adopting an EHR system, such as training, costs and complexity, but theadoption rate continues to rise.With individual computerized patient systems, the next question is how toimplement medical information systems at different sites and how to connect thenetworks, allowing users in multiple sites to access the systems.Computerized Provider (Physician) Order Entry (CPOE)Computerized provider order entry (CPOE), formerly called Computer physician orderentry, can reduce total medication error rates by 80% and adverse errors by 55%. Inaddition to electronic prescribing, a standardized bar code system for dispensingdrugs could prevent a quarter of drug errors. Consumer information about the risksof the drugs and improved drug packaging (clear labels, avoiding similar drug namesand dosage reminders) are other error-proofing measures. Interoperable HIT willimprove individual patient care, but it will also bring many public health benefits
  • 10. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Deliveryincluding: Early detection of infectious disease outbreaks around the country;improved tracking of chronic disease management; and evaluation of health carebased on value enabled by the collection of de-identified price and qualityinformation that can be compared. The industry-wide adoption of electronic healthrecords (EHRs) will amplify these benefits. Prescribing errors are the largestidentified source of preventable errors in hospitals. Medicare now offers financialincentives to providers for e-prescribing (PwC).Privacy and SecurityThe total economic burden created by data breaches in the health care industry isnearly $ 6 Billion annually. The healthcare industry faces significant challenges forpreventing data frauds and thefts. Sensitive data such as SSNs, insuranceidentification numbers, payment information, and medical provider identificationnumbers enables criminals to file fraudulent claims that often go undetected for longperiods of time (Deloitte, 2011). Electronic health records and their exchange providea convenient and efficient healthcare information utility but it brings with itselfgreater data risks.National and Local PoliticsHospitals are non-profit and hence they are a heavily audited industry. Someorganizations have a “non for Profit” mindset and do not view themselves as abusiness. This can be a hindrance to their growth in the highly competitive hospitalindustry. Even though St Jose is a “non for Profit” hospital with a “For Profit wing”under which they provide homecare services and management services like
  • 11. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Deliverysecretaries, payroll, accounting to Physician’s offices, they still have a “non for Profit”mindset. Heath care in the United States comprises a complex web of decisions madeby various institutions and political actors across a broad spectrum of public andprivate sectors. These institutions and actors include federal, state and localgovernments in the public sector. In the private sector they include healthcareproviders such as hospitals and nursing homes; health care professionals andhealthcare purchasers such as insurance companies industries and consumers. Awide variety of interest groups influence and shape health care politics andpolicymaking. The Political environment of the country also affects the healthcareindustry as it is a highly regulated industry. Certain regulatory requirements maychange that may lead to either changing project priorities or even discarding certainprojects that have a lot of money, time and effort invested in it. The health careindustry is driven by regulations by many regulating bodies such as the departmentof health and the joint commission.Following regulations are prevalent in the Health care industry a. HITECH Act: The Health Information Technology for Economic and Clinical Health (HITECH) Act, enacted as part of the American Recovery and Reinvestment Act of 2009, was signed into law on February 17, 2009, to promote the adoption and meaningful use of health information technology. Subtitle D of the HITECH Act addresses the privacy and security concerns associated with the electronic transmission of health information, in part,
  • 12. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery through several provisions that strengthen the civil and criminal enforcement of the HIPAA rules. b. Meaningful use: It monetary incentive offered by the government to the hospitals to adopt EHR (Electronic Health Records) and CPOE (Computerized Physician order entry). c. Accountable Care Organizations – The affordable care act commonly known as health reform law. It is geared towards preventing illness by improving healthcare quality. d. Any new regulation like ICD 10. That takes priority over every other project. e. RHIO: Regional Health Information Organization. They capture Patient Demographics, Lab results and Radiology resultsTechnical InfrastructureTechnical Infrastructure refers to the network backbone that connects the systemsused across the healthcare facility. Infrastructure improvements are often consideredsecondary when it comes to the healthcare delivery industry (InformationWeek, Mar2012). Along with the software part of the systems for example Electronic HealthRecords (EHR’s) it is necessary to maintain a good support on the networkinfrastructure in order to derive the benefits of the deployed software. Roughly 8 outof 10 health IT executives admit that they have added server, storage, or networkprogram technology after the fact--in other words, after implementing EHRs andother health information technology systems, according to a new poll (Lewis, 2012).According to a survey conducted by CDW Healthcare lack of proper infrastructure
  • 13. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Deliverysupporting the healthcare IT systems lessens the quality of these systems. Thereneeds to exist a balance between the systems such as EHR’s and the infrastructure(storage, servers) that supports them. As an IT project manager, it is necessary tohave a certain amount of control over these factors considering their dependency.This balance needs to be monitored on regular basis in order to avoid anyunexpected problems. Irrespective of a hospital implementing one of the besthealthcare systems, the advantages derived from them would not be sustainable ifthere is a loose network infrastructure in place.Return of Investment (ROI)As an IT project manager, it is would be necessary to liaise with the stakeholders andmonitor the financial gains that are incurred as a result of implementing thehealthcare system. The role of key performance indicators is crucial here. When ahospital or a healthcare facility implements a system, it is intended to cater to certaingoals and bridge some gaps that persist in their current system. It is the responsibilityof the project manager to make a note of these goals and then come up withappropriate metrics or key performance indicators on which the Return ofInvestment (ROI) would be based upon.InformaticsInformatics blankets a wide range of technological benefits that hospitals are tryingto derive from to enhance their operational efficiencies and patient care. Asmentioned earlier that healthcare providers are in the nascent stages oftechnological and data evolution. Another challenge lies in taking full advantage from
  • 14. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Deliverythe Business Intelligence solutions in healthcare. Healthcare organizations tend to beagglomerations of independently run units. Data comes from a variety of sources andis difficult to integrate. Data consistency and quality varies and is a key factor holdingback use of BI and analytics (Stodder, 2011). In the future, BI and analytics will havemore impact on clinical decision-making. Healthcare providers will be able to analyzetreatment outcomes based on who provided them, what treatment options werechosen and where they were administered, among other factors. They’ll be able tolook at what they spent on personnel and other resources and see how thosedecisions affected patient outcomes.IT systems Supplier PowerThere are only 2-3 major healthcare IT systems in the market. That leads to a very highsupplier power. Upstate university hospital has “Envision” (they are now switchingto Epic) and St.Jose’s has Mckinsey.There are three main vendors in the industry:1. McKinsey – A Hospital can buy an IT system from them and integrate it with theircurrent IT systems.2. Epic- The hospital has to use only their products. They cannot integrate an Epic ITsystem with their current IT systems. They do not have much power as a client whenit comes to Epic.3. All Strips-They are a big company and they buy small companies. They do not havea lot of in house development. Instead they take over smaller companies that makeIT systems for healthcare.
  • 15. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare DeliveryDiscussionToday, information technology is considered not just a supporting tool but a“strategic necessity” by world class organizations. As competition increases, the useof more sophisticated information technology tools and techniques is essential inorder for organizations to obtain a competitive advantage. In our research we foundthat there is usually no formal process to capture and document Best practices.St Jose’s aspires to be a network of services instead of just a hospital i.e. anorganization in which all the departments are united and offer same level of care.They want to be able to establish how much does it cost to treat a patientthroughout the entire network of services. They really want to be an accountablecare organization and build a long lasting relationship with their patients. They planto build such an IT infrastructure that enables St Jose’s to be able to deliver such aservice. Project Management is almost non-existent. They have no formal Projectmanagement. The vendors come in and bring their own project managers to managethe project. Thus, it is basically vendor’s responsibility to run the project. They createthe Project plan, conduct weekly status meetings and assign resources. The IT teamand the Business Analysts (BA’s) are responsible to get the internal team for testingand develop a testing interface if required. The approach is significantly ad-hoc anddriven by need rather than a vision. Tom Haskell feels that they would really benefitfrom a PMO office hospital wide. (Haskel, 2012). People do not see the time andresources that go into a project. They do not assign cost to that. Systems that theydevelop internally are not made visible. No-one accounts for the effort gone into it.
  • 16. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery(Haskel, 2012). Scope creep is huge, they have major issues in requirements gatheringand developing acceptance criteria that is signed by all the stakeholders. The IT teamat St Jose’s aspires to use Project Management to manage the expectation of thecustomer (stakeholders). Change management is one of the biggest priorities.The IT team is very small but growing aggressively. They have doubled in past twoyears. They are weak on documentation and communication. They are expected tosupport the entire organization including the off-site facilities like surgery centers,Physician’s offices, North medical center etc. There are a number of assorted systemsand they are looking to replacing all those assorted system with one system.Departments usually work as silo’s than as a team. There is considerable resistance toaccepting the new IT systems. Communication with these departments becomes achallenge as they do not have a business process tying them together. If a group ofdepartments are tied through a business process, they communicate very well witheach other as far as patient is concerned but there are still some things that are verysilo. (Haskel, 2012)At Upstate Best practices are only captured around software applications for theClinicians. They have a best practices advisory board to provide decision support tothe clinicians. This applicable to the “clinical advise” being entered into the system.For example, a certain drug is prescribed in combination with another given drug. Ora given drug is usually prescribed a certain dose (Berry, 2012).
  • 17. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare DeliveryAt Upstate they do not formally capture Best Practices but they capture positive andnegative lessons learned for every project. These lessons learned could be on anytopic. For example  How to manage stakeholders,  What could have been done better in terms of communication or training.These lessons learned are mostly captured on excel sheets. As an informal Bestpractice, these are captured from each committee engaged in the project. Theproject managers are trained to draw out the lessons learned from each committee.The lessons learned are categorized into following 3 major categories  Executive steering committee lessons learned  End user’s lessons learned  IT lessons learnedThey ask general questions such as: 1. In your opinion what was done well 2. What can be improved and how?IT Projects (Upstate Hospital):  Bar-coded Medicine system: In implementation the IT department personnel followed the nurses around as they gave out medication to capture the information to be entered into the system.  “My Chart”: Upstate has a web portal called “My Chart”. The patient can log in sand see their lab results. They can also schedule an appointment with their
  • 18. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery doctor and email their physician directly. This has allowed upstate to integrate patient information as a complete picture.  Bar-coding: They have IT systems to barcode the  Patient  Medication being given to the patient. Along with dosage and other information  Clinical staff servicing the patient. The staff is required to sign off on the patient.  Data Mining: They have a data warehouse and a whole department for decision support. They use Business Objects and have a whole team only responsible for reporting.  Telemedicine: Upstate hospital is very big on Telemedicine. They use it to collaborate with other doctors and to give physicians an opportunity to monitor and connect with their patients remotely.  CRM Welcome Kiosks: They have welcome kiosks to allow patients to sign in, check their balance and pay their co-pay.  Social Media: They have a face book page to promote the hospital.  Cifer Health: It is a post discharge automatic phone call that’s asks the patient of they would like to be called back. If they choose ‘Yes’ they called back on the same day through the call center. This has been a major success at the Upstate.
  • 19. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery  In House software: Upstate has home grown software for things that are not mission-critical like Human Resource software, student and employee health.Today, information technology is considered not just a supporting tool but a“strategic necessity” by world class organizations. As competition increases, the useof more sophisticated information technology tools and techniques is essential inorder for organizations to obtain a competitive advantage. The information systemscurrently utilized by the health care organizations generally fall into three main areas:transaction processing systems, management information systems, and decisionsupport systems (DSSs). One of the important trends is to move toward a universalelectronic patient record. It could be defined as electronically stored healthinformation about one individual uniquely identified by an identifier. This entailscapturing, storing, retrieving, transmitting and manipulating patient-specific healthcare-related data, including clinical, administrative, and biographical data.Project Management in Healthcare IT Sector:It is very mission critical from the clinical systems standpoint but also from billing,financial systems and admissions point of view. There is an increasing dependency onIT today and it is steadily increasing. A lot of projects that are strategic for thehospital involve technology. General departments in the hospitals are not trained todo strategic analysis. That is when Project Managers are involved as such projectsrequire extensive analysis. Project management is involved to some degree in allparts of the organization.
  • 20. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare DeliveryAt Upstate university hospital, Project Managers are often approached when adepartment is trying to build an ancillary application or a system to ensure that thesystem is able to talk to the central interface engine. (Berry, 2012)The project may notget approved if system integration is more cumbersome than the actualimplementation of the ancillary system. This project may also get rejected if it is notwithin the strategic plan or if the IT department does not have resources available.Culture:The executive board lack an understanding of the change management andorganization cultural issues, the role of business analysts is either absent or is merelyto document things. They expect the project to turn around very quickly as they havemade the financial investment. They do not understand the intricacies involved inimplementing a successful project. Everyone is extremely busy. They just want theproject done. According to them it does not have to be perfect. Getting time fromthe stakeholders is one of the major constraints.At Upstate they usually require the PM to submit very detailed reports in terms ofhours of manpower and level of effort required when asking for an extension on aproject.IT does everything auto magically:Users either reject the new IT system or blindly depend upon it. They forget that thenew system is merely a tool to assist them but they do have to continue to do theassigned tasks very intelligently. Some users expect the IT to speed up their work orreduce the effort required. This may not be the case at all sometimes. There will be
  • 21. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Deliverycertain other reasons for the adoption of an IT system but it may not necessarilyreduce the time or effort for the user. In some cases, it may even increase the timerequired. For example, in a CPOE (Computerized Physician Order Entry) it may takethe user more time to enter the order instead of just writing it on the paper. ButCPOE has many other advantages long with being much safer. Technology mayintroduce new sources of error. Technologically induced errors are significant andincreasingly more evident in care delivery systems. Terms to describe this new area oferror production include the label technological iatrogenesis for the process and e-iatrogenic for the individual error.Fragmented Industry:Different departments in the hospital have the tendency to work in Silos. They have acertain budget approved and they often build their own access databases or go andbuy applications and implement them. However, these applications are brought toProject managers when they either breakdown or if they need to be integrated withthe central system. The Project Managers are often not involved from planningphase. This leads to limited opportunity to improve the quality of the project.Upstate has one repository for Patient demographics, billings and lifetime clinicalrecord. It is housed in their vendor system. But they have other departments thathouse their own data. Each of these local systems has been implemented usingdifferent technologies. Hence, this leads to integration issues within theorganization. In Upstate and at St Jose’s EHR Electronic Health Records has been
  • 22. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Deliveryimplemented, but there are multiple EHR Electronic Health Records each withdifferent IDs for a patient.Upstate is currently moving to Epic’s IT system. This will allow them to have a singledatabase. This in turn would lead to better inter-departmental communication andgeneration of orders for different services. The IT department is also fragmentedwith different types of teams such as networking team, developers and projectmanagers.Staff iteration is another commonly faced issue. IT staff and clinical staff are typicallystretched very thin. The staff works under very high stress. And they have to becertified at regular period of intervals. The fragmented organizational culture thatencourages departments to work in silos also adds to this issue and createsbottlenecks or dead ends. People who really know a system(s) sometimes leave orget sick. Today this issue is handled at Upstate by cross training people. There are atleast 2 people who are cross trained for a certain job profile.
  • 23. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare DeliveryCHALLENGESHealthcare delivery systems are considered to be in an evolving state as far as use ofIT is concerned as they attempt to provide a full continuum of services in a user-friendly, one-stop-shopping environment that eliminates costly intermediaries,promotes wellness, and improves health outcomes. The proponents of IT feel that ITcan help improve strong physician-hospital links, coordinated systems of care,geographic reach, quality management, contractual capabilities, utilization controls,financial strength, organized oversight and economies of scale. But large size oforganizations, the geographical distances and structural differences amongcomponents, and the differences in services and staff involved create formidablechallenges to those responsible for installing IT solutions and software. The financialperformance of hospitals affiliated with systems suggests only small gains in manyinstances.Some of the challenges faced by IT Project Managers and PMO (Project ManagementOffice) as regards to IT in healthcare are as follows:Choosing the right technology: It is very important for PMO to choose the righttechnology which aligns with the business initiatives.Finding skilled IT personnel: Studies have shown the demand for consultants is at anall-time high, which is due in part to the rapid growth of the industry. For example,the EHR market is projected to grow from $973 million in 2009 to $6.5 billion in 2012.A report from CHIME (College of Healthcare Information Management Executives)also found IT staffing shortages were putting projects at risk, and it noted a project
  • 24. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Deliveryshortage of 50,000 qualified IT personnel in the next two years (McNickle, 10 ITchallenges for physician practices in 2012, 2011). The CHIME survey found that out ofCIOs looking for personnel, 71 percent said they had open positions in clinicalsoftware implementation and support. So it is important for PMOs to encouragerapid hiring in IT. (McNickle, 10 IT challenges for physician practices in 2012, 2011).Gain internal alignment: PMO should strive to achieve internal alignment by havinggood budgeting processes in place and good relationships with their internal clientsor users, like doctors and nurses who need services from IT. Failing to maintaininternal alignment, makes it easy for vendors to approach specific departments andthrow off an organizations budget year. They approach hospitals or physician groupsand get those wanting solutions that may be overlapping with something the ITdepartment already has on its strategic plan. So project managers should be wary ofsuch a situation. (McNickle, 5 things CFOs need to communicate to CIOs to preventoverspending, 2012)Benchmarking the spending: PMO should take efforts to benchmark everything fromsalaries of IT personnel to expenses incurred on IT products.
  • 25. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare DeliveryThis figure is adopted from “A CIO’s Guide to Healthcare IT Compliance without Overspending” bywww.npifinancial.comThis helps companies drive more savings, even more than they realize, because theyare paying too much. Effective spend management incorporates risk management toforecast the actual spend and cross reference it with the budget to avoid financialsurprises at the crucial stages of the project.Competition will lead health care organizations, and their associations, to theopportunities presented by information technology. How well a provider approachesthis challenge, from a strategic planning and implementation standpoint, will spellthe difference between success and failure in taking advantage of theseopportunities.
  • 26. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare DeliveryRECOMMENDATIONSProduct-Based Approach:According to Professor Gary Hamel, "Competition today is not between differentProducts - Its between different business models". The general tendency of thehospitals today is to be a COE-center of excellence for something. They could be acenter for stroke or breast care, any other kind of other service. They think “ProductBased” and project management can help identify opportunities for business modelinnovations and their implementation.Less Mature organizations like St Jose’s hospital can benefit from heavy projectmanagement methodologies and a PMO office as they need a set structure forProject management. We recommend the following for St Jose’s hospital: o Convince - centralized approach for PM is required o Clarify roles and authority - facilitate better decision making o Hire Certified PM-Services of a trained Project Manager should be offered to clinical and business units to facilitate training and to build structure. Conduct Training o Define Critical success factors and Key Performance Indicators o Develop acceptance criteria to manage scope creep o Value driven PMFor more mature organizations like Upstate we recommend them to experimentwith the traditional model of PMO and explore “Agile project management” andmaybe create a new and a more flexible PMO structure that is suited to the unique
  • 27. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Deliveryneeds of the healthcare industry. Following are our recommendations for a matureorganization: o Develop sustainable and flexible project management methodologies o Achieve vertical and Horizontal integration and develop new business models o Capture Best Practices o CDI-Customer Delight Index for Projects o Earned Value Management o Auditing and benchmarking, Change and Risk ManagementThe focus on IT Project Management in terms of the Quality across the healthcareindustry as a whole is minimal. Quality at Upstate is more focused around patientcare. They work with Press Ganey, a performance excellence consulting firm toimprove their clinical and business outcomes. They do not have quality managementcomponent of project management that we read about. According to Kerzner’smodel of PM Excellence, TQM (Total Quality Management) is an important quotientof the ‘Integrated Processes’. Hospitals should learn that project managementprinciples can be used to support and administer TQM programs in the facility. Thiswould primarily be targeted towards the operations functions in the healthcarefacility.Research is needed to better document and understand the link between IT andquality, including the types of quality problems information technology can be usedto solve and implementation strategies to ensure that quality objectives are met.
  • 28. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare DeliveryHospitals must consider both financial return on investment and nonfinancialbenefits when making IT investment decisions. The costs of CPOE and EHR can bedifficult to measure because they require investment not only in the technologiesthemselves, but also in changing work processes, significant staff training, andongoing system support. Thus in order to gain complete advantage of thesetechnological and non-technological investments, there is a need to effectivelygovern these parameters so that measureable progress can be made in the ITprojects which is why project management plays an important role.Recommendations for a PMOThere is too much disparity between "types" of projects and the implementationmethodology and structure each project receives. Its quite interesting, actually, howthe same resources (people) are coordinated for varying projects that fall underdifferent "sponsors". It just makes sense to streamline this by implementing a PMO.This way you get standardization, planning, resource tracking, communicationchannels and most importantly, the organization quits operating out of individualsilos. The real question here is: How do you propose the idea of a PMO, centralized inIT with the idea of project management methodology in a healthcare facility?The best way to propose a PMO is to not propose a PMO at all. For one, most PMOproposals to management often fall upon deaf ears or ears pained by the noise ofchange of any kind. But the key point is that a PMO is an enabler to achieve anobjective, not the objective itself. As a first step, one approach would be to focus theproposal not on the need for a PMO, but instead on the need and opportunity for
  • 29. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Deliveryimprovement. Treat this like any project effort. After establishing goals, objectives,and a high level overview of requirements, put forth a few options and pro formabusiness case assessments for management such as1) Do nothing, 2) Implement a PMO, 3) Implement a "virtual PMO", 4) Implement aPM quality circle, etc.For many organizations, if management is truly committed to improvement, a greatdeal can be accomplished with minimal cost and organizational impact simply byempowering a talented and energetic IT PM to set up a "virtual" PMO or head a PMquality circle to "get done" all of those things you mentioned. And based upon value,adoption, and ongoing maturity this can easily and predictably evolve into a full PMO- via the request of the users and thinking of management (not those who want tomanage or be in the PMO. Another good reason for this approach is that ifmanagement is not committed or if the organization is just not at the right maturitylevel, then proposing or pushing the PMO will likely fail. Conversely, if they are ready,then there is no need to push it through.According to Kerzner, one of the best practices for a healthcare PMO would bestructuring all projects in a consistent manner with a core methodology in place (thatis required to be adhered to). From our interviews with the Upstate, we discoveredthat in its case having a PMO and predefined methodology would not be a muchhelp. But as the recommendation says that there can definitely be a coremethodology which would be a small static part to have some degree of governancein place. Apart from this, hospitals like Upstate can enjoy a dynamic methodology
  • 30. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Deliverythat can be devised over this static part that would give the project managers therequired flexibility due to the fragmented nature of the projects.For healthcare IT projects or programs it is important to have a project formalizedwith the proper initiation and closing presentations. This is crucial success factor thatis necessary to make measureable progress in a more disciplined manner rather thanany ad-hoc manner. In case of St. Jose hospital, from our interviews we discoveredthat there is a need for this approach taking into consideration their relativelyunstructured way of executing projects. One of the challenges that we discoveredthrough our interviews is the stakeholder resistance that the project managers forthe IT initiatives. It is the responsibility of the project manager or PMO to come upwith action plans that would encourage stakeholder participation since the actualbenefits of the projects are only derived when the stakeholders, in this case cliniciansand executives get to speed using the systems. The sooner the stakeholders getinvolved, it is beneficial in identifying the hidden issues that can create operationalblocks and can be addressed at the initial phase itself rather than the issuescascading and forming a bigger issue at a later stage. As a part of reducing the digitaldivide and ensuring stakeholder participation, it is important that the experiencedclinical representatives issue a scoring/rating for the projects on regular basis thatwould supplement the project prioritization.Project Metrics that can be assessed by the stakeholders are of prime importance tomonitor the project or program condition. As discussed earlier, the project manageror the PMO members need to be proficient with the hospital industry and it is
  • 31. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Deliveryprerogative for them to be abreast with the domain. Using this knowledge and theirexperience they should come up with detailed project metrics that is specific to theirhealthcare facility. The business analysts will play an important role here assisting theproject managers with formulating the metrics. These metrics should be madeavailable and accessible to the crucial stakeholders in the facility.Portfolio Management:In case of the mature organizations, like Upstate, project management and programmanagement can be effectively carried out using Portfolio Management. Portfoliomanagement is a business function that is designed to support the successfulplanning and execution of the strategic objectives of the business. Regardless of itsname, effective and comprehensive portfolio management is implemented at anorganizational level and across an organizational scope where decisions about thebest use of resources—human, financial, facilities, and others— are made (Solak &Pickens). One of the challenges organizations face while defining and implementingPortfolio Management is differentiating between the initiatives that are managed bythe PMO and those which are not.In the case of a mid-size healthcare delivery organization trying to implement an EHRat multiple facilities, greater success is achieved when a PMO implementation teamworks with the leadership and critical resource managers at each facility to plan andexecute that facility’s rollout. In these cases, EMR standards are implementedconsistently across all facilities, while the benefits for front-line service and caredelivery at each facility are optimized.
  • 32. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare DeliveryThe objective behind implementing Portfolio Management in a hospital or healthcarefacility is to increase the overall operational efficiency and supporting theorganization in meeting its strategic long term and short term goals. Essentialportfolio management activities in healthcare industry include:• Opportunity identification - It is the process in which organizations assess their current business practices and identify opportunities to improve them that would better support the overall strategic objectives. The project manager would then analyze the technical and functional feasibilities and further work with the IT team to support the executive’s efforts who is the business process owner.• ROI forecasting and value definition - IT penetration in healthcare industry being in early stages implies that the number of skilled personnel who are well versed with the industry and its IT side are relatively less. In many healthcare organizations, many managers are competing for limited resources for their own parochial needs without sufficient regard for the strategic needs of the overall enterprise (Solak & Pickens). ROI forecasting and value definition is going one level ahead of defining the project or program details regarding the resource needs and the justification of the initiative. Ideally, along with the project costs, ROI accounts for the costs that would be incurred in the coming three to five years i.e. costs like system maintenance, training and upgrades, license renewal charges etc. In the healthcare facility scenario, clinical executives who own
  • 33. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery the business processes, benefit the most by liaising with the IT and finance for initiatives like CPOE, EHR implementation to calculate ROI during the analysis phase of the project. Many hidden costs are uncovered during this process. ROI is more accurately computed through close examination of vendor options and all associated costs (Solak & Pickens).• Project prioritization - Depending on ROI forecast and opportunity identification, the project manager should come up with a ranking of the project initiatives by utilizing the quantitative and qualitative parameters derived from the above mentioned steps. Project prioritization can give rise to learning opportunities in the project.• Capacity planning - Capacity planning is the beginning of the action part of the project. In this phase, an analysis of the available resources to spearhead the prioritized work and when that capacity is available is done. In this part of portfolio management, the types of resources that are present in the organization and their timeframes are identified to facilitate the resource allocation evenly. For example, in a healthcare facility, the IT manager is the resource owner and the doctors or the end-users are typically the business process owners. The IT manager might allocate dedicated resources working on single project or allocate same resources to multiple projects based on the project prioritization.
  • 34. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Delivery• Work scheduling - In work scheduling, the project manager comes up with the schedule of the projects as to which projects will be done when. Work scheduling is based on the previous capacity planning and project prioritization. Having project ‘check-points’ in the project execution and scope clearly defined, eases this process.• Project performance and value assessment - The project or program is regularly assessed to check if the deliverables are being met. Secondly, the resulting business process out of the project is examined and checked if it is meeting the objectives. We recommend that this process is done after several months after the project completion when the stakeholders and end users come to speed and integrate the project with their job function. The purpose of this value assessment is to verify if the portfolio management is operating effectively. Because some of these concepts are fairly new to healthcare organizations, the value of many healthcare initiatives has not been actually computed and aggregated over time.Extensive analysis around establishing correct business processes around the ITimplementations should also be done and someone or a team should be heldaccountable for that. (Maybe, a team of senior Business Analysts (BA’s) withorganizational change management experience). The end users should be involved inthis. The analysis and documentation of the “Future-To-Be” processes should begin
  • 35. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare Deliverywith the planning phase of the project and should ideally be completed before theactual physical implementation. (The BA’s may choose to work with trial versions ofthe technology to clearly define and document the business processes goingforward.)According to PMBOK, there are two kinds of PMO:  A PMO that handles the Portfolio of the whole organization and manages projects from a huge umbrella all the way down.  A PMO that serves as a resource for Project managers.A traditional PMO model may not work in the healthcare sector as there arenumerous IT projects running simultaneously in several departments. It is verydifficult to have a consensus for the prioritization of these projects for a PMO. ThePMO would need to have full support and buy in from the administration and theywould also need to be given authority to make decisions and to support the strategicplan of the organization. It is very difficult to do that in reality as the stakeholdersinvolved are highly influential and the environment within the hospital industry isvery political.The Healthcare industry can be compared to a set of spoke wheels that lock eachother up. Everything has to move together in one direction.
  • 36. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare DeliveryUpstate hospital is further governed by the state of New York. They are governed bylegality, by contracts and by the attorney General’s office.The hospital industry is very political and the organizational culture plays a huge rolein success of a PMO or a project. There is this general mindset that IT or computerstake away time from Patient care. A PMO for a hospital would have to be verysensitive to the culture. They may first have to come in and build relationships beforethey are officially announced as a PMO. They would also have to evaluate if they willbe accepted as decision makers by the organizations. A traditional PMO is more likelyto succeed in a smaller organization as compared to a university hospital. The roleand structure of the PMO may differ depending upon the size of the hospitalorganization. A large organization may have different tiers or levels of people whohave decision making authority. At Upstate there are executives at the hospitals whohave the ultimate decision making power. But they have the state over them.
  • 37. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare DeliveryEnd User Training:Training is very critical in IT project implementation. Project Managers have to ensurethat proper attention and time is given to each user. They also have to arrange forpeople to come in and cover the shifts of the trainees or pay them overtime to dotheir training after hours. They have to be very creative in their training methods tomake the projects acceptance as smooth as possible. The real “buy-in” for an ITsystem is only achieved after the users start using it. According Susan Berry, it usuallytakes 2 weeks for the users to completely accept a system. Training and Educationalso forms an integral part of the Kerzner’s model.
  • 38. IST 700: Complex Issues in IT Project Management Hospitals/Healthcare DeliveryLessons Learned: 1. Health care industry is very fragmented and very political. 2. There are many influential stakeholders, each with a different agenda. The competing interests of the different groups are not always clear or permanent. Hence it is very important to have visible executive support. 3. Medical treatment has made astonishing advances over the years. But the packaging and delivery of that treatment are often inefficient, ineffective, and consumer unfriendly. The end to end business model of the hospitals needs to be evaluated and refined. A number of independent players can be brought into a single organization—horizontal integration—to generate economies of scale. Or the treatment of a chronic disease can be brought under one roof— vertical integration—and make the treatment more effective and convenient. 4. Project management can really help identify these opportunities for business model innovations and their implementation. 5. However, it is important to understand different organizations are at different levels of readiness and different levels of adoption for Project Management.
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