Good Governance: Healthcare’s Rx for Digital Transformation
Author:David Morris, Managing Partner, Americas Health Consulting, CSC
Healthcare, more than any other industry, receives great praise for its use of technology to cure diseases, and great criticism for its slow adoption of technology innovation in managing its business. Gartner estimates that the provider industry will spend $88 billion in 2014 on IT services and technology, growing at 4.4 percent annually, which is almost 20 percent higher than the average growth rate for all other industries.
Across the world and the spectrum of healthcare delivery organizations, there are increasing pressures to dramatically lower costs. Regulators are mandating change, practitioners are screaming for a greater portion of the revenue, and patients are seeking new, less expensive options such as telemedicine.
As a result, healthcare delivery organizations are looking to technology to change the cost dynamics of the industry. This isn’t a new pursuit, but today is different. Never before has there been the readily available technology to address these issues.
To be sure, healthcare providers have been seriously investing in new systems. Worldwide sales of electronic medical records (EMR) systems, for example, now exceed $23 billion, according to research firm Kalorama Information.
Yet many healthcare administrators have not seen the benefits from all this new technology. In the case of EMR initiatives, many efforts have failed to reach expectations, in large part because hospitals did not obtain agreement from their physicians as to exactly what would be used, or even how the systems would be used. The technology was purchased, installed and implemented, but due to what can be labeled governance issues, it never delivered the intended business benefits.
The fault is not with the technology. What is often missing is a governance framework — and the willingness to consistently reinforce that framework. Without good governance, stakeholders may not understand why a new system is being implemented, and as a result, may refuse to use it to its full potential. Hospitals and other healthcare providers can still automate processes, but they won’t receive the expected business benefits.
Good governance is the key to implementing healthcare technology solutions that deliver real business benefits. So, in the context of healthcare technology, what is good governance, and what does it look like?
Essentially, good governance is an explicit framework for managing the competing and often conflicting interests and desires of different stakeholders. More concretely, a governance framework may start with a document and then workshops and other forms of training. The end result is a scalable process for resolving differences, making decisions and then communicating those decisions to all stakeholders. Ultimately, a governance framework connects the dots between a technology implementation and its intended business benefits, resulting in the wide acceptance and use that any new system requires.
Resolving differences is crucial in healthcare. Many organizations are competing fiefdoms of departments and specialists. These “fiefs” may be accustomed to high levels of independence and autonomy. Now they are being asked to collaborate more closely with others in the organization, and to also embrace necessary compliance requirements, compromises and decisions. Even with a governance framework, this work can be challenging. But without one, it’s nearly impossible.
CEO Not Included
Governance should also be scalable. With far too many healthcare technology projects, complex but relatively low-level decisions end up stalled, sitting on the desks of high-level executives. Of course, this means the entire project grinds to a halt. Deliverables and deadlines pass, and efficiencies and return on investment are lost. The solution is an effective governance framework that includes a logical escalation plan — one that does not include the chief executive!
Fortunately, effective technology governance does not require a total restart. Hospitals in many cases can use the committees they’ve already formed for clinical governance. However, a new approach will be needed. Much healthcare governance is focused on maintaining the status quo. But technology is all about change. What’s vital is that these committees not only identify obstacles and conflicts, but also have an effective way of resolving issues, making decisions, adding those determinations to the final implementation plan, and communicating in a way that fosters buy-in and action.
In addition, a healthcare provider that implements and actually uses a governance framework is well positioned to become a service-enabled enterprise. This involves wide use of cloud computing, costs matched to actual usage, better visibility on technology assets, and a wider range of quick deployment options. Best of all, service-enabled enterprises build and deploy new applications not in quarters and years, but in weeks and months.
For today’s pressured healthcare providers, that’s a powerful vision for the future.