IT Solutions for Hospitals in PerspectiveIt is an extremely common situation when a hospital, not matter what the size, calls in an IT vendor for their Information and Communication Technology needs and starts discussing about OS and development platforms, technology, hardware specification and such other trivia instead of focussing on what matters to the hospital. Let’s face it – it is not the core competence of the hospitals to be manage procuring, implementing and maintaining IT solutions.
While IT managers in hospitals may often appear to be extremely talented IT specialists, hardworking and brilliant professionals, these persons often have a limited exposure to the entire breadth of what an IT solution will need to do in an healthcare setting. This has often led to even large hospitals managing their IT systems with people who with limited vision for effectively using and enhancing their technological capabilities. The situation is smaller hospitals is even worse. The infrastructure is often managed by a person who is only knowledgeable about the IT products and not as much about what the IT products are expected to deliver in terms of changing the way the business processes of the hospital work.
What is it that the hospital needs when they say that they are looking for an IT solution? Ask any set of senior managers in a hospital this question and what one gets is an answer that looks like the response of the proverbial six blind men describing an elephant. Is an IT solution on which the hospital has invested anything near 2 to 5 percent of the total cost of the hospital project such an elephant? To answer that question truthfully and completely we need to evaluate the really need of various stakeholders in a hospital.
The Principal Stakeholder – Management
The management is looking at principally the following:
- Strategic contribution of the IT solution for the initiatives for improvement of the hospital conceptualised by the management as a whole and in its various functions.
- Ensuring an integrated solution that achieves synergy across functions rather than each function being an island of efficiency and having data in its own silos.
- Business value of the IT solution that enables information regarding functional and financial measures required to improve the business efficiency.
- Ensuring compliance with standards and ensuring adherence to rules, rates, policies, privacy and confidentiality expected of the hospital.
- Enabling the compliance of the system with the corporate governance plan.
- Tracking budgeted v/s actual expenses and income.
If the IT solution comes close to achieving these objectives of the system it would have made a big dent in the way the hospital would function.
The second most important stakeholder – the Customer
The entity called the customer is difficult to define in the case of the hospital. For the IT vendor or an IT department of the hospital, the customer is each of the departments which are touched by the system, while for each of these departments it is their eventual customer – the patient, the materials vendor, the financial institutions, and the management – who needs to see the difference. The customer whichever way one defines the term from an immediate or a long term perspective has a very limited set of needs not all of which are easy to understand and fulfil namely:
- Customer satisfaction based on the feedback received from the customers in the form of a positive feedback or a lack of negative feedback.
- Extent of involvement of IT vendor or department in providing new strategic applications for the business processes enhancement.
- Performance of the system in terms of its ability to provide quality measured by user feedback, timeliness measured in terms of reduced waiting period and reduced turn-around time, and reduced cost of and on the activities.
It is important that the impact of the systems on customers is kept as the primary operational focus of the systems.
Operational Excellence of the IT team or vendor
Operational excellence centres on what is seen by multiple stakeholders as benefitting them in an indirect manner. Among the areas where IT contributes significantly are:
- Process excellence measured through the capability of the organisation to meet regulatory and quality norms.
- Simplification of the processes, resulting from single point of data entry and access to the data from across the hospital.
- Process excellence measured in terms of ability to quickly identify areas of non-compliance, and areas deserving attention towards preventive and curative actions.
- Assuring security and privacy of the data and ensuring safety of the information with rapid action against security breaches. It needs to be overemphasized that the largest source of security breaches is often the team responsible for managing the systems.
- Providing a set of dashboards for decision support to various stakeholders in the organisation.
Operational excellence is often not only felt when one enters the organisation but also is something that translates into a direct benefit to the stakeholder.
Finally the Future Orientation
There is hardly any field in the world that has seen a change that has been so rapid, as is visible in the field of Information and Communication Technology. The technology providers therefore need to have a vision, mission, capability and ability to deliver solutions consistent with the needs of the future, not only to ensure continued excellence but also to ensure that this critical aspect of business competitiveness receives its rightful place in the scheme of business processes.
- Among the various critical parameters for the IT systems to gauge future orientation are:
- Service capability improvement through delivery of internal process to plan for
- On-going Process improvement
- Readiness towards Organisation growth and development
- Support for Professional development in providing efficient service
- Technology leadership of the institution to ensure capability to provide state of the art services.
- Enterprise architecture evolution though development of the concept of the enterprise and systems to ensure adherence to the enterprise architecture plan, encompassing the network of hospitals and their associates
- Active research and implementation of the benefits of advances in technology to meet the challenges of emerging techniques and technologies.
It is therefore appropriate that every organisation considering IT solutions for their operational and strategic excellence needs to look beyond the set of numbers that will enable justification in conventional terms for the expenditure on IT which is now a critical component in the continued competitiveness of the organisation.
The justification of numbers for investing in IT
For those who use the financial numbers as the gospel truth here are some numbers that will help you to decide how Healthcare IT solutions stack up. Most of the returns from an IT solution will be in the nature of improvements in business processes, removal of deficiencies that can potentially cost the organisation a substantial amount, reduction in revenue leakages due to erroneous calculations and rates, and the ability to carry out the business processes in shorter duration of time, at a lower cost, with reduced manpower and space requirements. It is important therefore to ensure that when one invests in an IT solution it should not be with the objective of replicating the manual process on computers, but with the objective to rework the processes that become redundant after the IT systems are in place.
Most organisations are confused regarding the cost of an IT system. Typically the investment in IT systems should be considered as written off in about 3 to 5 years time. It is unlikely that one would not need to refresh a system after 5 years of use. It would also be difficult to ensure proper maintenance of a system that is over 5 years old given the rate of changes and obsolescence in IT hardware and software. Considering the interest on the investment and the likely cost of maintenance over this period of time it may be a good idea to take 35% of the initial cost of the IT infrastructure as the annualised cost of the system. In case you are also deploying manpower for smooth operations the annualised cost would be at least 50% of the initial cost on the IT infrastructure including hardware, networks and software.
Most organisations have reported a 20 to 30% improvement in efficiency as a result of putting in place IT systems. In a labour intensive organisation like healthcare the improvements are at the upper end of the scale. It is typical that the investment in IT is unlikely to be more than 3% of the turnover of the hospital. Even a 10% improvement in efficiency will mean a return in excess of 2.5 times the initial investment or nearly 5 times the annualised cost – a return of over 500% on the investment!!
Recommendations for IT procurement for hospitals
If you are a small or medium sized hospital, consider the feasibility of joining hands with similarly placed hospitals in your area and approach the IT vendors for a solution that meets your requirements. Outsource your entire IT infrastructure so that you end up paying for the benefits of the IT solution rather than take the pain of maintaining the IT infrastructure. Don’t try to buy everything at one go. Costs of IT products fall over a period of time, and it is advisable to go in for enhancements from time to time rather than pay for everything upfront and not utilise it for a year or more.
Use the benefit of a joint negotiation for the group of hospitals. Explore the possibility of using common services like inter hospital referrals, joint connections to one or more pharmacies and diagnostic centres through the system and other similar concepts to help you utilise the full benefits of an interconnected system. It is worth keeping the technology aspects out of the negotiations and instead focus on outcomes. There can be a mind boggling quantity of terminologies that experts in the field will throw, most of which you may not be able to appreciate at all.
If you are a large hospital or a hospital chain, the single most important aspect is to consider the credentials of the IT vendors in terms of their capability to provide and support a solution on an on-going basis for a size of hospitals or a network as large as your own, besides of course the features and functionality that you need in your hospital or hospital chain. The previous comments about incremental addition to the infrastructure equally well hold for even large hospitals and hospital chains. It is not worth attempting to swallow an entire elephant at one go!!