In August 2023, Healthcare IT News sat down with John P. Donohue, vice president of IS entity services at Penn Medicine Information Services, to discuss what an entity information officer is and why healthcare provider organizations might need a few.
Penn Medicine is ahead of the game with entity services, and Donohue offered a deep dive on the subject. Today we are revisiting Penn Medicine and Donohue to build off of the subject of entity services and discuss how the IT department can effectively integrate with operations to strategize and achieve the goals of high-priority investments.
Donohue here talks about creating opportunities for standardization across a complex health system, strategizing prioritization of initiatives across the health system, realizing benefits of the programs and projects, and identifying opportunities for efficiencies and cost savings.
Q. Where’s a good place for CIOs and other technology leaders at hospitals and health systems to start when it comes to effectively integrating IT with operations to align and make the most of high-priority investments?
A. There are several important touchpoints key to IT alignment with operations for high-priority investments. The first and maybe the most important touchpoint is the annual budget planning process. In many cases, this is where the critical discussions are conducted around the organization’s overall priorities, appetite for investment and ability to staff such investments.
At this time, the organization signals its intentions around both capital investments and the operating expense required for delivering on the investment. This process becomes more complex for large health systems where this alignment needs to happen across the enterprise.
At Penn Medicine, the alignment and investment process focus is on consolidation and standardization on specific platforms for cost optimization purposes.
Additionally, we tend to rely on our mature governance processes, which in some ways are part of our organizational DNA. These governance processes are highly effective and really serve to reinforce the alignment, allowing for any discussion around prioritization and standardization.
The regular cadence of these governance meetings ensures that we never get too far away from the alignment that has been agreed to as part of the annual budgeting process.
Lastly, we typically rely on a highly collaborative approach to project execution for large-scale investments that require alignment. This means both IT and operations have skin in the game when it comes to delivering on the return on investment tied to high-visibility projects.
This approach has allowed us to stay focused on the overall benefits associated with an investment and has really reduced any finger pointing when challenges inevitably pop up. With our approach, IT and operations are both incented to stay aligned and commit more focus and resources on a successful delivery.
In summary, IT and operational alignment starts with the budget planning process. Then it is key to leverage existing governance processes to maintain the alignment during the discovery, staffing and execution of the high-priority investments.
Lastly, the “special sauce” is having senior leaders from IT and operations maintain joint ownership of the investment initiatives through delivery and realization of the identified benefits.
Q. You suggest creating opportunities for standardization across complex health systems is key. How can health IT leaders go about doing this?
A. I would take it a step further and suggest that senior IT leaders need to drive this standardization across complex health systems. Without a firm stance on standardization, the IT organization and IT-related spend will never be cost effective.
With the cost and investment headwinds that most healthcare organizations are facing today, this should be considered table stakes for running a mature organization.
In my opinion, standardization starts by creating a centralized IT organization that eliminates shadow IT across the organization. A centralized IT organization is more efficient and allows health systems to drive out costs associated with redundant functions and capabilities.
An enterprise-wide IT organization has optimal visibility into IT investments across the organization and has a finger on the pulse of business and clinical needs as well as around top investment priorities. This centralized organization can now start to focus on infrastructure and applications rationalization that lead to further efficiencies that drive out more costs and at the same time improve systems reliability.
Once you have an effective centralized IT organization in place, alignment across the enterprise becomes smoother. To further support this alignment on a day-to-day basis, we have created an entity information officer role.
At Penn Medicine we have several organizational units that we call “entities.” Each of our hospitals is considered an entity, as an example. This EIO role reports through IT, but the leader is embedded at the entity working closely with the operational leaders.
This IT leader has a team of people they use to focus on local support requirements. This EIO plays an advocacy role for both IT and operations and has allowed us to look at standardization opportunities as entities look at new technologies or refreshing end-of-life technologies.
Lastly, the centralized IT organization can strategically focus on key platforms adopted as standards across the enterprise. An enterprise-wide commitment by both IT leaders and operational leaders to these platforms paves the way for easier discussions around standardization and continuing to drive costs out of the system.
Q. You say strategizing prioritization of initiatives across the health system is fundamental to effectively integrating IT with operations. How can this best be done?
A. We have found that having a formal prioritization process is key to effective alignment between IT and operations. I have talked about some of the things key to having in place as foundational pieces – centralized IT, standardization around key platforms, and leveraging governance.
The next step is strategically prioritizing the investments so they are most effectively sequenced, remembering that delivering world-class healthcare in 2024 is a dynamic proposition – priorities shift.
At Penn Medicine, we have a very formal prioritization process. Each of the entities identifies their priorities (mostly informed by the annual budgeting process). With IT support, a detailed discovery process is conducted around their priority requests.
This process identifies the nuances of the project, required investments (capital and operating), staffing requirements, and, most importantly, return on investment.
These priority investment requests are regularly reviewed by a panel of senior leaders that includes our CIO. This is typically the time the green light is provided for an initiative to start. This also serves as a final opportunity to look for further standardization opportunities and ensure we have alignment between IT and operations – there are no surprise investments with this approach.
Q. What should health IT leaders do when it comes to realizing the benefits of programs and projects?
A. In our organization, IT leaders are part of the process to both identify then confirm the realization of benefits. Our project managers are engaged early and often in the planning process. They work closely with operations to identify benefits opportunities both within IT and within the operational entity.
When these investment projects are completed, we then work again with operations to confirm and validate the realization of the identified benefits. Furthermore, every two years, we produce a formal benefits realization report that is a retrospective look at investments over the previous two years with audited benefits identified and documented.
This approach has created a culture where leaders know they will be accountable for realizing the benefits they outline when they are proposing an investment. This also shows the alignment between IT and operations runs the full lifecycle of the investment – from planning through execution and documenting benefits.
Q. What are best practices for identifying opportunities for efficiencies and cost savings?
A. The most important best practice is having a formal process that both IT and operations buy into together. If an organization has the discipline to implement and live by this type of process, leaders know they need to play by these rules.
IT and operational leaders know their priorities and initiatives won’t get much airtime without identified efficiencies and cost savings. In today’s world, an initiative without a fairly quick return on investment is a hard sell.
It does not take long for IT and operational leaders to develop a knack for identifying efficiencies and cost savings. Smart leaders figure this out pretty quickly. The first few years tend to be fairly easy as there is some low-hanging fruit.
As organizations start to mature further, these savings opportunities become more difficult to identify and deliver. With automation capabilities and generative AI, we are now seeing opportunities we could not have delivered on years ago.
In summary, smart leaders in both IT and operations know where they can identify savings through investments. It is a matter of instilling the discipline and rigor such that they know they have to produce a return on investment and then will be held accountable downstream when the project is completed.
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