How to jumpstart digital transformation in healthcare

Every industry assumes a distinctive culture, which in turn influences the kind of IT infrastructure that supports it. Healthcare is no exception. Led by medical professionals, dedicated to patient care and insulated from common market dynamics, healthcare self-consciously stands apart. The impact on IT is a dichotomy: at best, it leads to shared industry knowledge; at worst, to insularity and resistance to change.

But external factors – regulation, competition and technology – are combining to make resistance more futile. That’s putting healthcare provider CIOs in a difficult situation.

“After years of successfully implementing systems to meet regulatory requirements, half of them are not sure what to do next,” says Doug Smith, general manager of the WGroup, a peer-led IT management consulting firm, and former CIO of the Cleveland Clinic. “They say, ‘I have all this technology debt, my team’s skills are limited, our engagement model is broken, and funding is drying up.’ They are being forced to make some tough decisions.” (Disclosure: the company I work for, NTT Communications, partners with WGroup in healthcare and other industries.)

For CIOs willing and able to act, here is a three-part strategy to jumpstart the process: 1) take inventory, especially of vendor contracts; 2) become a co-equal partner with your technology providers; and 3) focus on capabilities that can help you bridge the digital transformation gap ahead.

Audit, cut and self-fund

 Pressure to reduce healthcare costs is growing. For IT departments, this presents a chance to take stock of vendor relations. For some general vendor management advice, see these six tips from my colleague Rich Harper. But if you’re a healthcare IT leader under the gun to cut costs and embrace new challenges, consider these suggestions from the WGroup to help you cross the digital transformation chasm:

• Review all contracts with suppliers. If you’re paying twice – or even once for something that’s unnecessary – adjust and recover those savings.
• Locate high fees and align them with market pricing.
• Reconsider all SLAs and OLAs. Do they meet your needs and add value? Or are they aimed at static and non-strategic targets? Do they align with the business’ targets and strategy?
• Eliminate and retire all shelfware.
• Drop any provisions for maintenance that are no longer applicable or appropriate.
• Rationalize your supplier lineups. (Redundancies are common following mergers and acquisitions.)
• Cancel auto-renewals – this is especially apt for contracts involving any SaaS or cloud services.

After two or three months, these measures should have a two-fold effect. You will have regained more control in your vendor relationships and likely generated measurable savings. If your organization has already created a vendor management office, direct those savings there. If it hasn’t, find the right partners (legal, procurement, etc.) and self-fund a similar effort.

Become a focused partner

At the same time, you’re auditing vendor contracts, take additional actions to create more efficient/effective processes, optimize future spending and realize value. A first step is to minimize distractions from non-core activities.

Your job is stressful enough without a constant barrage of “bright shiny objects.” While CIO of the Cleveland Clinic, Smith says he received many dozens of such “objects” in emails every week, often forwarded from department chairs, about new business ideas, applications or widgets aimed at solving one or more business challenges. “Over a year,” he says, “that becomes a whole lot of activity.”

A mature IT organization driven more by product development than ad hoc projects should find efficient ways to funnel these kinds of solicitations. Again – think products, not projects. Try to reduce the impact of random actors by assessing any new ideas and requirements against established roadmaps.

That is not to discount innovation. There are indeed many current breakthroughs – from IoT to blockchain to AI – with great potential for healthcare. One way to handle the more promising applications is to set up centers of innovation or excellence, or joint labs for tests and trials.

Outstanding healthcare IT leadership today calls for much more than competence in purchasing. The model is not simply to buy but to broker. Finding the right mix of suppliers, setting up best-in-class terms and aligning with market pricing – those are by no means easy feats. But the goal is to position your organization to better serve internal customers, patients and the business at large.

Adjust your assets

A case in point – more common in other industries – is working with a managed service provider to host enterprise applications. In healthcare, this could mean transferring an Electronic Health Records (EHR) system – such as Epic, Cerner or McKesson – over to a third-party data center. Whether you have the capabilities to do so, however, is another question.

“It’s not just a procurement exercise,” says Smith. “You can’t just hand this off and hope that things go well. You have to be intentional about how you interface and how you collectively set up your governance, so you can have a successful long-term strategic relationship.”

To make such scenarios more common, healthcare CIOs will need to recalibrate. That includes focusing on building blocks, such as APIs, cloud integration, standards and other tools that allow their team to run more complex plays with internal customers and external providers. It also includes personnel, even if they regard themselves as untouchable. You may want to reskill EHR system implementers as programmers who can apply today’s devops best practices to solve a different set of challenges.

Even when jumpstarted, change takes time. Conditions differ in each departmental silo: infrastructure, help desk, field services, security, implementation, support, integration, customer interaction, etc. A transformational CIO, however, should find ways to create agile, cross-functional teams that can not only broker and integrate, but also orchestrate.

The endgame is easy to visualize. Medical clinicians who collaborate at a rapid cadence in frequent standups and huddles provide IT colleagues – just down the hall – with a ready example of how to join efforts and achieve shared objectives.