From the President: IT Is a Strategy Tool
Richard L. Clarke, DHA, FHFMA
It was not a pretty site. Several CEOs from the nation's largest banks that accepted funds from the Troubled Assets Relief Program were being grilled by angry members of Congress.
"What happened to the money?" "How did the public's investment help anyone?" "What is the public's ROI?" Tough questions for which the bank executives didn't have good answers.
Will healthcare executives experience the same outrage related to acceptance of "stimulus" monies for healthcare IT? Will we be asked to "show the return"? It could happen if healthcare executives focus only on technology and not on the strategy the technology is designed to accomplish.
John Glaser, the CIO at Partners HealthCare System, once wrote that IT does not have an intrinsic ROI. Rather, it supports strategies that have an ROI. I agree with John on this issue. So I am concerned that the billions contained in the recently passed stimulus package appear to focus primarily on technology investment. The premise seems to be that significant investments in IT will provide significant cost savings or ROI. IT investments are critical, but not sufficient to achieve a true return.
This is not to say the systems being developed and sold are not good investments; a vast majority are very effective at what they are designed to do. Returns, however, come from successful implementation of the strategies that the systems support. ROI comes from successful redesign of processes to achieve strategies and outcomes that are supported by the new IT system. And ROI comes from ensuring that the staff who use the new processes supported by technology are properly trained and motivated. The definition of the strategy comes first; the selection of the IT system that supports the strategy comes afterward.
For example, given the unprecedented challenges facing us, a fundamental strategy that has an ROI is to increase value. Increasing value involves driving costs down while simultaneously increasing quality. This strategy has an ROI because it recognizes that the healthcare system of the future must focus on reducing costs and increasing consumers' engagement. Low cost and high quality win when payment systems shift incentives from expensive, hospital-based services to less expensive community-based services. Almost every other industry that experienced price stagnation or compression had to focus on value. And this strategy needs effective technological support to be successful. But the technology alone will not ensure success.
So although the stimulus package provides funding for IT investments, it is critical for healthcare executives first to define the strategies that position their organizations for the future and then define the technologies that support those strategies. To implement systems solutions without clearly defining the other crucial components-process redesign, employee training, and motivation-will not produce the desired return. Accepting public money requires that we're clear on how the investment supports a clear strategy that provides an exceptional ROI.
Publication Date: Sunday, March 01, 2009