In this Business Profile, Mitch Morris, vice chair and global leader, healthcare, Deloitte, and Michael O’Rourke, senior vice president and chief information officer, Catholic Health Initiatives (CHI), share perspectives on the need for transformational IT in health care today.

Mitch Morris, vice chair and global leader, healthcare, DeloitteA key focus for Deloitte is information technology (IT) consulting. What are some of the big-picture challenges you see affecting healthcare CIOs?

Mitch Morris: Many organizations have made large investments around meaningful use and ICD-10. As a result, they are experiencing some capital exhaustion on IT. Accessing future capital is more complicated these days because of competing priorities and many organizations diversifying revenue streams by buying physician practices and branching into retail and ambulatory practice. At the same time, there’s a need to support operations in an environment of declining reimbursement. All of these factors make it hard to drive additional funding around IT and are adding pressure for CIOs to demonstrate return on investment.

I think CIOs also are regrouping a bit after physicians’ tepid reception of electronic health records (EHRs) following such a big spend. In fact, in Deloitte’s 2014 Survey of U.S. Physicians, three out of four physicians said EHRs “cost too much and take too much of my time.”

Michael O'Rourke, senior vice president and chief information officer, Catholic Healthcare InitiativesMichael O’Rourke: So much of the industry’s investment in EHRs has been driven by the opportunity to receive stimulus dollars and meaningful use reimbursement. And yet, even though billions of dollars have been spent on EHRs industrywide, their promise has yet to be delivered on.

Given the challenges you both mentioned with EHRs, what do you anticipate will be different in organizations’ technology strategies going forward?

Morris: Going forward, focus is going to be on EHR optimization, where installing an EHR is not simply a project with a start and finish date, but rather an ongoing journey by which technology enables the transformation of payment models from volume- to value-based care. What will be different this time around will be focusing on the cost and quality effects of care transformation and improved collaborations.

That said, there are some promising tools already available. Deloitte offers Evergreen™, for example, an application management services solution that configures and maintains EHR content in a way that helps clinicians make decisions, anticipate changes, predict outcomes, and manage populations. The solution uses global delivery and economies of scale to save between 20 and 30 percent off of application maintenance costs from what the cost would be with internal resources.

O’Rourke: The goal of EHR use is to make clinicians more effective at the point of care by aiding evidence- based decision-making. Better decision-making can then help them deliver improved outcomes, faster interventions, and better management of disease states. To realize these benefits, however, we still need to optimize our ability to bring information together from many sources and then measure impact of process change on cost and care. As an industry, we’re early in this path toward ROI.

As part of care transformation, many organizations are seeking to improve capabilities around population health management. What are some of the IT implications of this focus?

Morris: Healthcare providers and health plans are focused on how to converge functions effectively. One aspect is improving analytics. Having the ability to gather and analyze data from many different sources will be important to understand costs of care and actuarial risk associated with patient populations. Whether providers and payers enter into population-focused agreements around payment bundles, accountable care organizations, or full capitation, it’s important from a business perspective for both parties to understand for each DRG or disease state how much is being spent, how to best manage risk, and how to examine cost and revenue across the population served. Having the right IT solutions and intelligence will be key in these efforts.

At Deloitte, our wholly own subsidiary, ConvergeHEALTH, is developing advanced solutions that aid clients’ data integration, management, and analytics endeavors, and that also go a step beyond and enable them to apply those insights. We also have an alliance with the Northern New England Accountable Care Cooperative, which is helping us develop best practices in this space. What we are seeing through these relationships is that, as the healthcare industry continues its shift to value-based, personalized health care, it’s the application of data-driven insights that will be a market differentiator and become increasingly important to drive healthcare transformation.

O’Rourke: Whether IT users are providers or payers, their ability to make effective clinical and business decisions comes down to delivery of information. Exchanging data from many sources is going to be key to having the information needed to provide patients with the right care at the right place at the right time.

Also important operationally is exchanging data across the care continuum. Many health systems, including CHI, are making investments so they can better manage care outside of the acute care environment. Yet integrating cost and quality data between inpatient and ambulatory settings can be challenging, particularly when the exchange may involve many physicians who are each operating with different systems.

Earlier we discussed some of the financial pressures organizations are under. Can you talk about how IT outsourcing is being viewed in this regard?

O’Rourke: To be successful, organizations are going to have to find ways to be more efficient and reduce their current spend, because we as an industry simply can’t do the same things operationally in the future that we have done in the past and succeed. At the same time, we can’t afford incremental change. Improvements in how organizational resources are managed and the quality of care provided must be transformational. Because IT is one of the biggest expenses, we need to be out front driving down cost and increasing innovation. When every part of the business changes as fast as is being seen in health care today, we have to adapt at least as quickly, if not faster, in putting new structures in place. If you don’t have the right skill sets on board to address the changing times, get them. Position your organization with the disruptive technology needed to move value-based initiatives forward quickly. Engaging vendors can be an efficient way to access the intelligence and analytics capabilities that are necessary to lower cost and optimize service delivery.

Bringing in IT support can also introduce the organization to different skill sets and ingenuity that can be applied to better understand each part of next-era service delivery. For example, external companies may have experience working with physician organizations and health plans that are now part of integrated delivery networks. These business partners who know the service lines and have been embedded in their processes for years can often more effectively identify cross- continuum performance improvement opportunities than internal staff.

Are there any educational materials you would like to share to help providers in improving their IT strategies?

Morris: Readers can learn more at Deloitte’s Center for Health Solutions and the Deloitte Survey of U.S. Physicians, and get more information on the Deloitte EvergreenTM solution.

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Publication Date: Wednesday, April 01, 2015