Loyalty is a laudable trait when it comes to family, friends, a political cause or a favorite sports team. But in the business world, there's a thin line between loyalty and foolishness. Loyalty to a new technology or information system is great if things work out in the end and you get to say, "I told you so!" to all your detractors. But such loyalty can selfishly put a company and all its employees at risk if the board or top executive blindly sticks with a new technology or system that has little hope of succeeding.
It takes real backbone to pull the plug, and it's an art to know when to do it. Some executives use the "year from now" test. Will the new technology or system work any better (or improve or be more profitable, etc.) a year from now? If the answer is no, then you have to consider a new direction or at least some sort of intervention. Some technologies or systems inherently require a longer timeline, like the "five years from now" or "10 years from now" test. Unfortunately, taken to the illogical extreme, some ineffectual executives or boards prefer the "100 years from now" test. That's also known as the "let the next guy straighten it out" test.
This year, a number of healthcare companies have shown incredible bravery by calling it quits on much ballyhooed information technology projects:
* In January, Cedars-Sinai Medical Center in Los Angeles suspended the development of a multimillion-dollar computerized physician order-entry system less than four months after it was rolled out (Jan. 27, p. 12).
* In February, Kaiser Permanente in Oakland, Calif., scrapped a 10-year effort to build its own electronic medical record system and instead hired an outside vendor to do it for $1.8 billion (Feb. 10, p. 6).
* Also in February, Detroit Medical Center filed suit against an outside vendor to get out of a 10-year, $300 million contract to outsource management of the system's medical records just one year into the venture (Feb. 24, p. 6).
* In early May, Baylor Health Care System in Dallas announced the termination after only one year of a 10-year, $200 million outsourcing contract for billing, collections and revenue management (May 12, p. 3).
* Later in May, HCA in Nashville said it was scrapping the development of a new accounts-receivable software program after one year, predicting a $110 million to $130 million write-off in the second quarter (May 26, p. 3).
The gurus of the healthcare industry like to talk about leadership-or the alleged lack thereof-in the field, with leadership often measured by doing something bold such as undertaking a massive merger or construction project. But there's nothing more bold or smart from a business perspective than knowing when to pull the plug and then pulling it. It won't make you as famous, but it saves companies, jobs, money and reputations.
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five more reasons why Modern Healthcare is the leading source of healthcare business news and information in the industry.
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