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

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

[email protected]

September 20, 2012

mailto:[email protected]�

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 countriesHowe 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

3

EducatorMBA, MS in IS, PhD programs

IT Management – including Healthcare ITTextbook co-author – Pearson, 7th ed.

ResearcherTopics 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

Personal Introduction


MIS Quarterly ExecutiveEditor-in-Chief• Carol V. Brown, Stevens Institute of Technology

Senior 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 Business

Editorial Board Members = peer reviewers • c.50 academics experienced in conducting practitioner research

Association 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.

www.misqe.org

4Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012

http://test.misqe.org/ojs/index.php/misqe�

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 5

*IT for Healthcare Delivery Organizations, which include Hospitals (acute care, inpatient), Physician Practices (ambulatory, outpatient), long-term care facilities, etc.


#1: Historically, a laggard in IT investments

In 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 bedsIT = 3.87% for 501-600 beds

• rural versus urban locationsIT = 1.81% for ruralIT = 2.67% for urban (Source: HIMSS Analytics 2008)

6

Why Collaborate on Healthcare IT Research ?


Source: 2007 MGH Institute of Health Policy, IHP Study; DesRoches, et al., NEJM, July 3, 2008

In PhysicianPractices

In U.S.

Size

Minimally Functional EHR(clinical notes; recordpharmacy, lab and imaging results)

Fully Functional EHR System Total

1-3 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 doctors

33% 17% 50%

Total 13% 4% 17%


8 8

IT Investments in Other Industries: 1990s - Today

Information Technology Types of Software Applications

Early 1990sPortable computers (with mouse input)Graphical user interfaces (Windows)Local area networks connect desktop computers

Mid-1990s and LaterEnterprise systems with centralized databases and client/server architectures

• Data repositories and analytic tools for “business intelligence”

WorldWideWeb (WWW) standards (URL, HTML, IP protocol)Web 2.0 applicationsSmart phones and tablet computers

• PCs with Windows operating systems• Suites of integrated apps for knowledge workers (MS-Office) • Network operating systems enable multi-user sharing of apps, data, printers

Suites of integrated software apps to support multiple departments and cross-unit workflow(ERP, CRM, SCM) Executive information systems and decision support tools using integrated databases

Easy-to-use Web browsers E-commerce websites by dot-com (online) & traditional firms Organizational use of social networking tools Small, downloadable software “apps”


Administrative Systems

• 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

Packaged Software for Hospitals:Enterprise Systems for Operational Efficiencies

9

ERP vendors (like SAP)


Packaged Software for Hospitals:“Best of Breed” Applications by Niche Vendors

Clinical Systems• 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

10

Not ERP vendors



#1: Historically, a laggard in IT investments – including enterprise systems with integrated modules

#2: Healthcare sector is a major component in global economy


Healthcare Spending in U.S. as % GDP

Healthcare costs = 16% of U.S. GDP by 2006

Healthcare costs >18% of U.S. GDP by 2012Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012 12

Healthcare Spending per Capita in Developed Countries

13

McKinsey&Company, Dec 2008


Two Universal Healthcare Goals

CostsReduce growth rate

Quality Improve Patient outcomes

(& reduce medical errors)


Two Universal Healthcare Goals + 3rd U.S. Goal




Patient Access

to ProviderPhysically accessible(& financially affordable)


40+ millionUninsured

In U.S.

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 = Patient


U.S. System• Bismarck model

– Provider = Private If employed….– Payer = Private

• Beveridge model– Provider = mostly Gov’t If military veteran– Payer = Government

• National Health Insurance– Provider = Private If over 65 Medicare– Payer = Government If classified as “poor”

• Out-of-Pocket– Provider = Private (in cities) Uninsured patient– Payer = Patient


Medicaid

Est. 40 Million under age 65

By Employers who subsidizeHealthcare insurance; mayInclude $$ deductibles

Serviced by Veterans Health Administration (VHA)

Two Universal Healthcare Goals + 3rd U.S. Goal




Patient Access



Affordable Care Act 2010

[“Obamacare”]

Affordable Care Act (2010)


Patient Protection and Affordable Care Actalso referred to as “Obamacare”

Date

In effect Increased age for “child” under a parent’s plan

2013 New “caps” on coverage and insurance paymentsNew Pharmaceutical company taxes, more drug subsidiesNew Medical Device company sales tax

2014

etc….

INDIVIDUAL MANDATE: Federal Tax (penalty) for Individuals with No insurance coverageEMPLOYERS: Penalty if 50+ workers and No health insurancePRIVATE INSURERS: No caps on annual or lifetime $$; cannot drop individual for pre-existing condition or charge moreSTATES: Must establish a health insurance “exchange” for individuals & small employers to purchase insurance plans

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)

Other Recent U.S. Legislation: HITECH Act




Patient Access



HITECH Act of 2009$19.2 B for Electronic

Health RecordAdoption

Affordable Care Act 2010

[“Obamacare”]

The HITECH Act: Some Specifics

• $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.


HITECH Act (2009)Part of the American Recovery and Reinvestment Act (ARRA)*

* Economic stimulus package

-patient demographics -medications

-existing conditions & progress notes -vital signs

-past medical history -immunizations

-laboratory data & radiology reports


• $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




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.

23

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


CPOE Module: Difficult to Implement



• $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 PhysiciansMax. $2M + per-discharge amount for Eligible Hospitals

& future reductions in payments if not an EHR adopter [in future]




2626

“Meaningful Use” Criteria increase over 3 stages (multi-year periods)*

• Electronic capture of structured data

•Tracking key clinical indicators

• Care coordination

• Reporting for clinical quality and public information

•Disease management

•Clinical decision support

•Medication management

•Transition in care

•Quality measurement and research

• Bi-directional public health

•Improvements in outcomes (quality, safety, efficiency)

•Decision support for national high priority conditions

•Patient self-management tools

•Improving population health outcomes

Stage 1

Data Capture and Sharing2011-2012

Stage 2

Advanced Clinical

Processes2013-2014

Stage 3

Improved Outcomes2015-2016

Source: Medical Informatics: An Executive Primer, 2nd edition, 2011


* August 2012: Stage 2 criteria released & some time period adjustments

Example: Medicare payments to eligible Physicians

Stage 1 Stage 1 Stage 2 Stage 2 Stage 3 Stage 3$18k $12k $8k $4k $2k $0

Stage 1 Stage 1 Stage 2 Stage 3 Stage 3$18k $12k $8k $4k $2k

Stage 1 Stage 2 Stage 3 Stage 3$15k $12k $8k $4k

Stage 1 Stage 3 Stage 3$12k $8k $4k

2016+ Maximum Incentive

$44k

$44k

$39k

$24k

2010 2011 2012 2013 2014 2015

Stage 1: Data capture and sharing

Stage 2: Advanced clinical processes

Stage 3: Improved Outcomes


Source: Medical Informatics: An Executive Primer, 2nd edition, 2011

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


Why collaborate on Healthcare IT research ?


#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


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?


ERP Benefits Sought by Other Industries

New Millennium Internal & External Drivers

• Enable global operations • Enable information sharing

across business partners (external supply chain with suppliers & customers)

• “Jump on bandwagon” and/or “options” investing


Initial Internal Drivers• Enable cross-functional

business processes• Leverage modern

technology platforms and centralized database for improved data access

• Configured for “best practices”

• Ability to integrate data for decision support

External Driver –• Avoid Y2K costs

EHR Benefits Sought by Healthcare Industry

Additional Internal & External Drivers

• Enable information sharing across other healthcare stakeholders (suppliers, insurers/payers, patients, government)

• Government mandates(& HITECH incentives)


Initial Internal Drivers

• Enable cross-functional clinical workflows

• Leverage modern technology platform and centralized database for improved data access

• Configured for “best clinicalpractices”

• Ability to integrate data for decision support

Understanding the Healthcare Context:

• Organization Level– Key Drivers (benefits sought by the organization)Healthcare Industry: What’s Different: Government role


Enterprise System Projects

ERP early adopters

• ERP suites of integrated modules to replace “functional silos” (often custom legacy systems)

• Heavy reliance on 3rd-party “implementation partners”by early ERP adopters (Fortune 500, Global 1000)

• Publicized failures by major companies (EHR suites)

EHR early adopters

• EHR suites of integrated modules to replace “functional silos” (usually best-of-breed packages)

• Heavy reliance on software vendors and internal staff (not consultants)

• Publicized failures by major health systems (EHR suites, CPOE modules)





36

Critical Success Factors (CSF)* Research

* What “must go right” for Initial Implementation Projects


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.


Critical Success Factors (CSF) ResearchComparative 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.38Prepared by Carol V. Brown forIFIP WG 8.9, Ghent, Sept. 2012

Understanding the Healthcare Context:


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


Learning from Other Industries:Enterprise Systems Research in Healthcare



• Program Level– Multi-stage Enterprise System Cycle (includes after Go-Live)


The ERP Journey: 5 StagesRoss, SIM-Seattle; Ross, Vitale and Willcocks, 2003

Design

ImplementationStabilization

ContinuousImprovement

-“Go Live” (initial Implementation) is analogous to “diving off a cliff” into the water, and then attempting to “resurface” before running out of breath (Stabilization).

- Once a stable state is reached, a Continuous Improvement phase begins, which is a precursor to achieving the organizational Transformation benefits that are the “ERP promise.”

Based on ERP case studies from late 1990s:


4-Phase Enterprise System Experience CycleMarkus and Tanis, 2000

Phase I

ProjectChartering

Phase II

The Project

(configure & rollout)

Phase III

Shakedown

Phase IV

Onwardand

Upward

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 ImplementationShakedown includes Stabilizing = getting to normal operationsOnward and Upward includes Continuous Improvement (also with new versions)

Based 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).



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 theory

Type #3 research has the potential to significantly contribute new knowledge – to academics and practitioners –because it takes into account how the healthcare industry differsfrom other industries.

*Source: Chiasson & Davidson, 2004


What else is Different from Other Industries ?Enterprise Systems Research in Healthcare

• Software Maturity Curve:“Mature” for ERP, but not Healthcare ES


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

Business

brown forifip wg

industries carol

executive information

laterenterprise systems

niche vendorsclinical

packaged software

executiveserp research

rigorous research