After five years on the job, Jim Olson could finally start thinking about the third item on his to-do list at Waterbury (Conn.) Hospital. The chief information officer has been at the 268-bed facility for five years and says the facility spends about $5.5 million, or 3% of the operating budget, on information technology. His first task was Y2K. After 2000 came and went, he moved to his second task: acquiring a new IT system. "We thought it would take a year," he says about the process of finding an IT vendor.
But the acquisition process took almost two years. Getting grants and a certificate of need took nearly another year. Only then was the hospital ready to start the 18-month implementation process, which is scheduled to conclude in November 2005.
IT initiatives are timely and costly endeavors for hospitals. Unexpected problems-which will crop up-make them even more time-consuming and expensive. For community hospitals with limited access to resources, bringing down the cost is imperative.
Most high-end clinical application suites are not only prohibitively expensive for smaller community hospitals but also are built to allow maximum flexibility to map their features and functions to a particular set of provider circumstances and to change them when the need arises. That flexibility adds up to extra cost and a need for IT expertise that many hospitals can't afford, says Michael Kreitzer, an independent healthcare IT consultant.
Clinical IT vendors have attempted to resolve the cost and complexity problems by building "stripped-down versions" of their products aimed at smaller customers, Kreitzer says. The lower-cost products still offer a central database and good integration with feeder information systems just like the brawnier versions. But they don't give customers as much latitude to customize features for their unique needs. Many of the features and functions are set to be the same for all customers, which brings down the price but limits the number of options that otherwise would be left to the hospital, he says.
When considering which vendor to choose, hospitals should completely understand the architecture of the system; they should know how to modify it, not just how to use it, says Skip Lemon, a consultant with First Consulting Group. Once the system is understood it's easier for the staff to operate it.
At Waterbury, Olson says the committee grilled the vendors and presented them with different scenarios. The vendors "whined and complained" about the process, he says.
However, Olson wanted to ensure that the vendors weren't just showing what their products could do well. "Some might be strong in evidence-based ordering," he says. "We needed patient flow."
After the vendor's system is running, hospital executives should revisit the contract and see what applications are being used. Many times the contract will stipulate that hospitals start paying for applications after a specified length of time. Once that time comes, hospitals will be required to pay maintenance fees whether they're using the software or not.
George Hickman, CIO of Albany (N.Y.) Medical Center, says hospitals should be aware of exactly what they are using. If they are paying for applications they are not using, they should attempt to negotiate out of that part of the contract-which can deliver big savings.
Another way to save some money is through "aggregation of equipment," he says. "Don't buy computers from Dell, printers from HP, IBM laptops," he says. "Select a vendor that you trust" and make a bid to buy hardware in a bundle. Buying used equipment would also be cheaper, but used products often don't come with a warranty and hospitals likely will have to pay someone else for maintenance, Hickman says. He suggested instead looking into resellers of new equipment.
Despite hints that the federal government might develop incentives and subsidies for healthcare IT, outside funding help can be a challenge. A good way to tap outside resources is by partnering with private organizations that might have a mission similar to the hospital's, Hickman says.
But such arrangements should be a net gain for a hospital. Hickman advises against applying for grants that would require starting a new project. When hospitals do this, they won't likely receive enough funding for the project and will take on a new recurring cost.
Olson says hospitals should seek grants that might be specified for one purpose but can be used to improve IT.
At Waterbury, Olson has used funds from grants to upgrade IT. One of them, a federal grant, went to fund care for patients with HIV. The money enabled the hospital to improve an outdated 8-year-old network serving a clinic that provides HIV care, and now the new network supports other areas in the hospital.
-with John Morrissey