(PART 1 OF A 2-PART SERIES)

For healthcare executives, there are three realities about the proliferation of IT within their hospitals that should command attention. The first is that without well-managed IT systems, any hospital today would be challenged to deliver quality patient care. Second, any hospital without IT would be virtually unable to generate claims to get paid for its services. Third, despite IT’s central role in hospitals, it seems to live in a separate world, with its own unique demands, timelines, skill sets, and vocabulary — making its activities and performance levels difficult for laymen to understand. This combination makes for a potential perfect storm when the right (or wrong) conditions occur within a hospital.

Today, your IT shop must be performing up to its potential, and your executive team must be sure it is getting the best return on every dollar invested. The team must be able to understand and evaluate IT performance — without geek-talk, internal bias or fuzzy answers that cause heads to shake. This calls for an objective, highly methodical and thorough assessment by a qualified independent professional. How do you know when it’s time for such a review?  Every hospital goes through internal transitions or circumstances that should be recognized as strong smoke signals. This 2-part series explores potential tipping points when hospitals are in greatest need of an objective IT assessment.

When should you get an independent assessment of your IT function? Here are our first five reasons/scenarios:

1. You have a new CIO. Enabling the new CIO to enter his or her role with an objective third party assessment in hand has multiple benefits:
   • It will help him/her get off to a strong start with the IT team and the hospital’s management team, without personally being held responsible for pushing hot buttons or creating resentments. (Unpopular reports can be “blamed” on the independent assessment.)
   • If the incoming CIO is new to the hospital, an early external assessment provides him or her a jump start in understanding the entire department.
   • If the new CIO has been promoted from within, an outside assessment offers an unbiased perspective of the department —  which he or she is not in a position to provide.
   • The new CIO gets the support of a third party’s trusted advice in implementing his or her new vision. Some of the strongest CIOs I know have used this strategy to quickly help them get internal traction and to provide political support for needed change.
2. The hospital is taking a significant new strategic direction. A major shift in vision for the facility likely means new priorities for many departments, and almost certainly for IT. A third party can analyze the impact of these organizational priorities on IT, and help align IT objectives, operations, spending and staffing with them. The perspectives of your internal IT staff are likely to be very connected to current state. Taking leaps outside of that box may be too difficult for them without support from a professional with a broader, more objective perspective.
3. The organization has been hit with a regulatory crunch or crisis, such as a security breach or failure of a Meaningful Use / MIPS audit. Compliance-related issues are obvious red flags that failures need to be found, analyzed and addressed without delay. An objective third-party review is essential in these situations because impartiality is critical to moving forward appropriately, and will be viewed positively by regulators and other concerned parties, including the press and the community.
4. You’ve had an outsourced IT function for several years. Many hospitals have outsourced all or parts of their IT functions, and with good reason. Outsourcing can provide access to resources that a hospital can’t otherwise afford, and offers avenues to reduce risk look here.  However, many hospitals have relied on outsourcers to manage their IT department for as long as ten to fifteen years; their original contracts were signed in ancient history in the technology world. Depending on the length of time you’ve been outsourcing and the outsourcer you are partnered with, the following factors should be considered:
   • Time can change everything, including the effectiveness and appropriateness of IT outsourcing in your hospital. Longtime outsourcing relationships are often founded on now out of date SLAs, early objectives that are no longer relevant, or even pricing models that are now too high. Over time, some outsourcers may have become complacent, with leaders paying less attention to the outsourced hospital, including allowing performance to slip.
     It is easy for a hospital to simply renew every few years, but chances are your current leadership does not understand the conditions of your contract as well as the original signers did, and may not know if the outsourcer is meeting them. A renewal may or may not be the right thing for you now, but this should be determined by understanding all the facts.  After such a long period, an independent analysis of your contract, its appropriateness in today’s environment,  and your outsourcer’s performance against it will be invaluable in making the right decision going forward.
   • Many hospitals rely on their primary software vendor to outsource the IT function, because of early “package deal” price breaks and other incentives. We have found, however, that while software vendors can provide excellent service for their own products, other products and new technologies in your environment can suffer. Further, a software vendor / outsourcer generally will prefer to solve new IT issues with their own products (and partners), and is unable or unwilling to objectively consider other marketplace options that may be more appropriate and cost-effective.
     A third party assessment will clarify whether you are getting all the services you are paying for, if the outsourcing model and provider is in sync with the organization’s current strategic goals, if your outsourcing contract and conditions still make financial sense, and most importantly — whether you still should be outsourcing IT.
5. Strategic IT projects are falling behind. One or two projects falling behind is not necessarily a sign of trouble, though that can depend on their priority. However, when multiple projects slip, significant internal issues likely exist. They may be internal  IT issues, or organizational impediments such as competing priorities, inadequate funding or lack of sponsorship. An unbiased opinion can diagnose the problems, help re-determine priorities realistically, and get the projects back on track.

Stay tuned — next week! — for our second five reasons to undertake an IT assessment.