Since 1985, Anthony Lennen has worked in administration at Major Hospital in Shelbyville, Ind., a quaint county seat with a fountain in the downtown square. It's the only hospital in a county of about 44,000 people whose largest land use is growing corn and soybeans. With downtown Indianapolis just a half-hour's drive up Interstate 74, Lennen is acutely aware of the competition from Indy hospitals.
In the first quarter of this year, 58-bed Major Hospital captured just 52% of inpatient visits by Shelby County residents and 54% of outpatient surgeries while netting 85% of emergency room visits. More than half of the hospital's patients are on some form of public health insurance, he says, a percentage that increases as the population ages.
Lennen rose to CEO at Major Hospital in 1993. Jack Horner, a former pharmacy manager, is now Major's chief information officer, and the two men have been plotting the community's healthcare IT future for more than a decade.
"When I first got here, Jack Horner and I mused that the foundation of this mission is not bricks and mortar, but information," Lennen says. Soon after he took charge as CEO, he says, they began "rebuilding the hospital around information technology" and, in the process, creating a regional IT infrastructure built on the model of a very small integrated-delivery network.
Their work began with deciding to use a single, enterprisewide clinical information system and selling the idea to the clinical staff. Major chose as its IT vendor Medical Information Technology, or Meditech, which has targeted small hospitals.
"We felt Meditech was the best integrated solution out there and had a good track record of actually working," Lennen says. "Plus, four of the other hospitals in the counties surrounding Indianapolis already had Meditech, so we could help each other, at least in theory."
Staff training and the rollout began in 1997. Concurrent with the IT implementation, the hospital started buying medical practices in its service area, Lennen says, convinced that IT and financial integration were twin keys to clinical and financial success.
"We talked to our physicians and our employees, telling them we wanted to use IT as part of our business strategy," Horner says. "We saw it as a competitive advantage. It certainly has helped in recruiting. Doctors coming out of medical school expect integration."
About 100 physicians have joined the integrated system, accounting for all but one family-practice group and one general surgeon in the area, Lennen says. So far, five offices and 21 physicians are using the hospital's remote-hosted electronic medical-records system in their practices in family, internal and sports medicine, OB/GYN and pediatrics. Lennen says he hopes to have the remaining 80 or so physicians and their staffs trained and using the EMR in the next 18 months in what he described as a "grind it out" implementation.
"We're taking four or five people (on staff) now and telling them they're not doing anything but working the doctors' offices. We have 570 employees. About 112 people are involved in this. It's a heck of a gamble for us to do this."
An integrated, countywide EMR will be the next link in a chain of healthcare connectivity in which Major Hospital has played a big role. Shelbyville's small size and the rural surroundings forced the hospital to take extraordinary steps to implement its IT strategy, Lennen says. High-speed Internet service was not going to reach Shelby County in time for Lennen and Horner to contract for the bandwidth they needed, so they took the hospital into the Internet business. They entered into an economic development consortium with the city and county, bought out two local Internet service providers and laid enough fiber-optic cable to extend high-speed connections to physician offices and other facilities.
With the county's IT infrastructure thus laid, the hospital sold its network to an Indianapolis ISP, but retains an ownership stake in the company. Most Shelby County physicians have ready access to Major Hospital's clinical IT system via the high-speed lines and virtual private network, Horner says. Only a few have to log in through a Web portal and a dial-up modem.
In six months, the hospital will have the technical capability to let patients access their medical records via the Internet, though Lennen says the hospital has not made plans to offer that level of access yet.
Lennen says the hospital is spending $1.5 million of its normal $3 million capital budget on IT, against total operating expenses of about $55 million. Total spending on the clinical IT system so far has been about $6 million.
Last year, the hospital had net income of $5 million, Lennen says. "This year, we'll be lucky if we make $1.5 million." The difference, in addition to IT spending, includes heavy outlays on a new cancer treatment center and an upward shift in public-pay in the patient mix.
Now, the new challenge for Lennen and Horner is to market their technological advantage to the county's healthcare consumers.
"If you come into the ER, if that data is unified, we can make an argument that it's better to stay in our system because that data is there," Lennen says.
Adds Horner, "We've got to convert that to a consumer model that sells. I think we're ahead of the curve again on this."
Major Hospital, Shelbyville, Ind.
Major Hospital's IT network
Service area: Shelby County, Ind.
Population in service area: 44,000
Physicians: About 100
IT vendor: Meditech