See if this whirlwind of major projects makes you dizzy.
Evanston Northwestern Healthcare's growth and expansion plans are running ahead of its information systems' capabilities. So the healthcare system, based just north of Chicago, decides to replace and highly upgrade its computer applications for the business office, payroll and materials managementÃone after the other.
Now throw in a merger with Highland Park (Ill.) Hospital, bringing a third acute-care facility into the system with 1,500 new employees to add to the payroll, business office, materials management and all other operations.
While all this is happening, an information systems staff has to operate and maintain a range of "mission-critical" information systems already serving the academic medical center and more than 50 other nonhospital locations.
But why stop there? The best interests of such a geographically diverse organization call for electronic transfer of diagnostic images to escape the limitations of film-bound radiology. And the effectiveness of a staff of 1,700 physicians depends on getting clinical information from a hospital data repository to doctors' offices and homes through the Internet.
That about sums up the information technology objectives achieved or conceived during just the past 18 months, the result of a polished partnership between executive strategists at Evanston and an outsourced army of professionals supplied by the Atlanta-based information technology business of McKesson HBOC.
The ambitious roster of projects required cutting-edge IT skills, plus the know-how to integrate new applications successfully with existing information systems. In addition, there had to be a balance of workforce quantity and quality: enough staff on hand to handle big workloads, but enough of the right staff available when needed to troubleshoot technical mysteries in any number of uncharted areas.
And that describes the major role of information technology outsourcing at Evanston, says Thomas Smith, the healthcare system's chief information officer since 1991. When top management wants to jump on market opportunities or cover expanding business requirements, it's important that the outsourcer have the wherewithal to supply "better people faster," Smith says. "That does have an impact on our ability to support any initiative the hospital (system) may have."
About 125 McKesson HBOC information professionals handle day-to-day operations, most of them interviewed and hired by Evanston to fill specific needs, although they officially work for the McKesson outsourcing division, he says. More are called in when needed for a particular job, either from one of the 35 other hospital organizations under contract or from so-called SWAT teams of "super-experts" not attached to any location.
The top two IT managers -- Smith and a new chief technology officer for e-business -- are on the Evanston payroll, and Smith himself has been a member of corporate management only since 1998; before that he was on the outsourced side of the workforce. McKesson employees continue to hold titles at Evanston, including two who are assistant vice presidents, he adds.
Details of the contract's financial terms are not divulged, but overall the healthcare system has budgeted $15 million for IT operating expenses in the current fiscal year ending Sept. 30. Add to that another $4 million in operating expenses for telecommunications, also under Smith's responsibilities. The combined capital budget for IT and telecommunications is $16 million.
A heritage of partnership
The scope of IT and the reach of outsourcing have both increased immensely since Evanston first entered the outsourcing arena, but that's to be expected of any operation during the course of two decades.
As healthcare organizations today wrestle with the thought of outsourcing -- and the issues of control and change that it engenders -- the management technique has been in force for so long at Evanston that it's considered normal, says Jeffrey Hillebrand, the system's chief operating officer. "This was a solid business decision 21 years ago, and we'd do it today," he says.
Solid business is what Evanston is all about, judging from its performance during the past decade. For seven consecutive years, the organization has been listed among the 100 Top Hospitals, an annual calculation of acute-care financial and operational excellence. Its robust performance in fiscal 1999 -- $14 million in operating income on net operating revenue of $530 million -- was eclipsed by its results the following year. In fiscal 2000, income from operations jumped 60% to $23 million on net operating revenue of $711 million, a 34% increase from 1999.
Hillebrand has a long view on executive challenges through the years and the role outsourcing has played in the solutions. He should: As a new employee in 1979, he got there just as Evanston managers were getting ready to hire a local company called Medicus Systems to run the hospital's mainframe computer and collaborate on a new patient-accounting information system. The outsourcing services division of that company, called Mediflex, was purchased in 1985 by Atlanta-based HBO & Co., which itself was purchased in 1998 and became part of McKesson HBOC.
The early years of Evanston's outsourcing experiences are steeped in historical significance for the healthcare information systems industry. Only a few options then existed for running daily operations and making use of a patient-accounting system: one was a remote connection through telephone lines to computers at Shared Medical Systems in Malvern, Pa., and another was a basic application for IBM mainframe computers called the Shared Hospital Accounting System. Evanston and Medicus sought to improve on the SHAS system and ended up with a product called MediPac that still runs at Evanston as well as at large medical centers such as the Mayo Clinic, Cleveland Clinic and Henry Ford Health System, Smith says.
When the Mediflex unit was purchased by HBO in 1985, its patient-accounting and patient-care systems became HBO's HealthQuest information systems line, and Evanston became the largest of HBO's outsourcing customers.
But the teaching institution's provision of specialty medicine and its budding territorial growth -- Glenbrook Hospital opened in nearby Glenview, Ill., in 1977 -- introduced business needs that were very different from the midsized hospitals that made up HBO's customer list, Hillebrand says. If the arrangement was going to work, it meant going beyond HBO's product line and gaining support for the market changes being felt by an early adopter of the integrated delivery system structure, he says.
Evanston became a key partner with HBO in sorting through the integration of acquired information systems that suddenly have to work together in a healthcare system, says Jorge Cerda, national vice president of IT operations in the McKesson outsourcing unit. HBO in the 1990s added the healthcare applications of nearly 20 companies in stock-financed acquisitions.
Meanwhile Evanston had made a strategic decision to concentrate on medical specialty care, to the point of making its physician staff two-thirds specialists, Hillebrand says. That meant it had to expand the number and types of information systems to facilitate specialty care, and it had to expand and strengthen the telecommunications networks necessary to exchange clinical and administrative data between hospital facilities and physician practices.
The challenge for outsourcing vendor and client was to develop a little integration project of their own. OIntegrating their strategic directions with ours has really helped facilitate the change,O Hillebrand says.
Freedom of choice
In the 1980s, Evanston's expectations for outsourcing included full use of both the people and the products of HBO, except for a couple of nonhealthcare areas such as general ledger and payroll, Hillebrand says. But by the early 1990s the healthcare system had changed its approach to an open search for the best application to suit a particular need -- the so-called "best of breed" buying strategy. It was HBO's job to successfully integrate and operate what Evanston chose to implement, whether or not the choice was something from HBO.
At one point the healthcare system made four decisions in a row to buy an information system that wasn't an HBO product. But within six months, HBO had bought the companies making the information systems, Hillebrand remembers.
Today McKesson HBOC supplies only about 30% of the overall information systems operating within the Evanston organization. Of the clinically oriented systems, about half are from the former HBO, Smith says. Evanston gets discounts on software licenses and maintenance as part of its outsourcing arrangement but is under no obligation to purchase anything from the outsourcing vendor, he says. Among the competing products chosen were a radiology system from Cerner Corp. of Kansas City, Mo., and a laboratory system from SCC Clinical Information Systems, Palm Harbor, Fla.
That's about normal for the three dozen organizations outsourcing their information systems operations to McKesson, says Larry Krassner, who directs the division and its staff of more than 1,000 healthcare professionals. The company typically is the vendor of at least one "core" information system, such as for patient accounting, billing or clinical order entry, but otherwise supplies 50% to 60% of total applications on average, he says.
"Our people are not allowed to be incented in any way toward software or HBOC revenues," Krassner says. "Actually, the opposite is true."
"If we buy a lab system from HBOC, nobody here makes any more money," Smith says. But if an HBOC system is selected over a competitor preferred by employees on the front lines, HBOC employees are faced with answering to the users and trying to make the information system work under contract terms that measure customer satisfaction, he says. "We're not going to pick a product that the lab employees don't want."
When the situation calls for it, an entire function can be subcontracted to another outside company. The healthcare system's independent practice association, which is responsible for 85,000 enrollees and generates $100 million in annual claims, is managed through a remote connection to Infotrust, a subsidiary of Trustmark Insurance Co. in Lake Forest, Ill.
Speed and competence are key factors in managing claims, enrollment and eligibility processing for the IPA, Smith says, and Infotrust was judged to provide "a better set of services for a very big and important part of our business." The managed-care application central to the service also runs on a computer platform Evanston does not have in-house and would have had to acquire just for that operation, he adds.
Increased reliance on computerization has its advantages but also its risks. Each addition or expansion increases the number of skilled professionals necessary to introduce sophisticated new technology and keep the information flowing.
It's the know-how
With the addition of a clinical data repository in 1998 for hospital-based records, physicians gained online access to patient information and the ability to compare previous records with current charting information. But along with that improvement, computer performance suddenly became even more critical. "The more we rely on clinical systems, the more the risk escalates," Hillebrand says. "That argues for the need to rely more and more on the expertise of others to help us."
The umbilical cord to McKesson supplies the extra measure of recruitment reach often needed to land the right person, Smith says. The company's recruiters go to job fairs, run ads and manage a Web site posting openings for specific skills, creating the capacity to fill jobs faster than providers could on their own, he says.
Retention is as important as recruitment, and the outsourcing arm of McKesson has the lowest turnover rate of any business unit in the information technology business division -- about 5% compared with the industry average of 15%, says McKesson's Krassner.
Recruits to Evanston don't move around much even within McKesson, says Smith. In fact, he can't remember anyone hired for an Evanston position who left for another job at one of McKesson's other contracted hospitals. But five staffers who worked elsewhere in the outsourcing division came to Evanston with thoughts of staying in one place and settling down, he adds.
Evanston pays a premium for the personnel arrangement in the form of management fees on top of staff salaries. "We think that's a worthwhile expense," Smith says. Even though Evanston's expansion and reputation have put it on an equal competitive footing with other large corporations in the Chicago area, Smith figures the talent it gets is better and more immediately available than the provider organization could manage on its own. "We're in a much better position to attract people than we were in the past, but good people are hard to find."
With McKesson focusing on information technology recruitment in a hot job market, Evanston is free to focus on recruitment and retention of nurses and other personnel more closely related to its basic mission of care delivery, Hillebrand says.
Putting outsourcing to the test
The professionals working within the outsourcing division constitute a "knowledge base" allowing client hospitals to reach outside their on-site workforce for help in specialized areas, Krassner says. McKesson can link IT staff at one hospital to "mentors" from other sites, or it can shift people from one facility that can spare them temporarily to another site with shortages of the personnel needed.
Smith says he can get on the phone to managers of similar sets of information systems to talk about shared issues of operation and integration. "It's easy to get advice, and it's good advice."
Those capabilities were tested during 2000, when Evanston executed an ambitious information-systems replacement and standardization campaign at its two longstanding acute-care facilities while also integrating the acquired Highland Park Hospital's management, medical staff and reporting systems into the healthcare network. "Having outside expertise really helped facilitate that merger," Hillebrand says.
A new payroll system was rolled out early in 2000 to all three hospitals and more than 50 other sites in the organization. A general ledger system was implemented across the network by May 1, and a new materials management system was operating by September. By Feb. 1 of this year, Evanston's patient accounting and clinical results reporting systems were installed at Highland Park.
The materials management system was a shock to the workforce. "This is a big change for people," Hillebrand says. "They've been using the same materials management system since 1984."
But Evanston's scope of operation required the upgrade. When the old materials management system was running, it could handle a maximum of 400 users. After the new system was installed and could handle anyone with responsibility for ordering, the number of employees authorized to use the system more than doubled to 950.
The access was especially beneficial at nonhospital offices and clinics where employees had to fill out paper-based requisitions and endure days of delays in getting materials requests to the proper department, Smith says. Now they can place immediate orders online. "At remote sites, that's a very big deal," he says.
The venerable general ledger system also was operating beyond its capabilities, though it was still reliable. "The old iron horses were really working well. But for modern management needs, they were insufficient," Hillebrand says. For one thing, reports still were compiled in the information systems department instead of being accessible from computers in management offices, he says.
Even more unmanageable was the time-card payroll system, which dated back to when the organization consisted of two hospitals. Now Evanston Northwestern Healthcare comprises dozens of ancillary businesses and offices, which makes the mere collection of time cards a logistical challenge each week, Smith says. The switch to a sophisticated online system erases the problem of remote locations and adds such management features as the ability to track vacation days and add or modify employee benefits, he says.
Throughout 2000, the success of new implementations depended on being able to mesh new systems with existing ones so information could be passed and shared. "It's impossible to keep that level of expertise if we have to do it independently," Hillebrand says.
Continuing the continuum
The next push is to forge routine communications between the hospitals and independent doctors on staff, most of whom do not have electronic access to patient test results and other essential information, Smith says.
About 400 employed physicians can get data through dedicated phone lines, but it's too expensive to put private lines in place for all 1,700 physicians on staff, he says. So last December, the organization signed a contract with Healthvision, a Dallas-based healthcare technology company, to provide a secure Internet connection through which independent physicians can get remote access.
Terms were not disclosed, but the contract calls for connecting 500 physicians within two years of setting up the physician "portal," Smith says. Evanston also contracted for a separate Internet portal serving community information needs.
In deciding on Healthvision, Evanston once again selected a competitor to McKesson HBOC. The choice was between Healthvision's remotely delivered application and McKesson's newer but promising system for physician connectivity called Horizon. Smith says the offering from McKesson would integrate well with current systems and was coming on strong, but it was not as mature and proven as Healthvision at the time a decision had to be made. Evanston still might proceed with the Horizon product for in-hospital use, he adds.
In its evolving strategy to build a successful continuum of care, computer connections are essential to achieving an identity as Evanston Northwestern Healthcare, Smith says.
"Without a good system infrastructure and the ability to supply applications to the users, we wouldn't be able to project one image to our users and wouldn't be able to project ourselves as one ENH, which has been very important for us to do."