Tuesday, August 26, 2008

Systems Integration

With so much going on, I was surprised that I spent quite a bit of time thinking about a series of questions a writer posed about integrating health care information systems. I think I did this because I believe that the very definition of a "system" more or less dictates the outcomes producting the system and, in my mind, asking "are your current systems integrated?" is not as important as asking "do you know what information sources you must emphasize and integrate to improve health care?" One can either design for the last conflict, or try to anticipate the future and built towards what one knows must be achieved. I have always favored the latter approach.

Effective use of Information is the life blood of health care. Such integration affords greater quality of service, greater economic returns, and - in some instances - may literally save lives. The purpose of integration, therefore, extends beyond short-term efficiency and will either enable or constrain the evolution of a business.

To address any question of integration, health care executives must make assumptions about the very nature of their organization. When one says X is not integrated with Y (or X is integrated with Y) one states that somehow both X and Y are important to the business. When one has systems or information sources that are not even included in the assumptions, one is saying that these systems or information sources are not core to the business. If I say “it never occurred to me to think about integrating A with my integrated X and Y” one is saying either that such integration does not meet business objectives or is not even considered central to the core mission of the business.

So the right questions are not just : Are you integrating your current systems but also “are you developing a road map to integration or coordination of information sources that will improve your short-term prospects and position your organization for leadership in a wildly disruptive and chaotic environment? Integrating the right things propels an organization into a whole new level of business.

One need look only at organizations like Wal-Mart or Amazon to see how systems integration support market dominance. Integrating the wrong things may actually anchor one in the past and accelerate organizational demise.

Think of Clayton Christensen’s “Innovator’s Dilemma.” In this book he noted that the makers of the steam shovel knew about the back hoe, but they were so wedded to their steam shovels that they just couldn’t envision this new market. Similarly, most makers of main frame computers knew as much about early personal computers as those who built them, but they just couldn’t see how focusing on these disruptive technologies could possibly be the best use of their time as their margins were shrinking and their margins declining.

Health care plan executives need to approach their integration strategies to make sure they are answering the right business questions. They need to remember that the last steam locomotive ever built was no doubt one of the very best steam locomotives, but that the market has moved on.

The same issues face health care. Consumers, frustrated with the fragmentation and complexity of the health care system and fairly oblivious to its costs, are taking power - through informal support groups, through new means of care delivery, and through a new generation of personal health records and systems. Health care executives would be wise to try to understand this rising tide.

It appears that even within relatively well-defined boundaries, health care executives often believe that their own information technology houses are not in order. One must be sympathetic. The growing and increasingly absurd degree of coding complexity, regulatory confusion, and changing policy directions make integration of complex systems challenging. Still, given rising costs and the public perception that health plans and other intermediaries are doing very well, executives should be prepared to face a degree of unprecedented public accountability. Employers and individuals should, rightly ask, “if you don’t even have your own houses in order and running efficiently, why should I allow you stewardship over my health care dollars? Why, indeed, should you be in business at all?”

There are answers.

When I was employed by a large company in the health benefits sector that had acquired several other firms (each with its own free-standing information system), our visionary CEO tied a significant fraction of the bonus for every individual to achievement of systems integration targets. His claim was that everyone - in one way or another - could make life better or worse for our IT staff, and if we made it worse, the company would suffer. He recognized that until we got our own IT house in order, our customers would be confused, our employees would be frustrated, and our shareholders would not realize the potential of their investments. His strategy worked.

Other data suggest some integration with external partners or within their own family of companies. In addition, wise executives are uncertain which alignments made sense in this changing world. This explains the reticence to embrace new technologies, be they health information exchanges, personal health records, or other emerging approaches to health information management.

But the reality is this. As more and more health expenses are returned into the hands of consumers and as more complex mechanisms are required to extend coverage to more (or all) Americans and to cushion the impact of catastrophic illness, health care executives simply must try to understand that their organizations are only a part of the overall information flow affecting the lives of Americans. They don’t “own the health information game” but instead must work with others more effectively.

Abandoning a paternalistic approach - particularly if such an approach has been associated with short-term financial success - is not for the feint-of-heart. But a reformulation is as essential to these executives as it is to travel agents facing an emerging Internet or retailers facing Wal-Mart. Things change, and knowing how to change is a skill critical to success if not survival itself.

I am sympathetic with those who face integration challenges. Particularly in a field where billing complexity and reimbursement methods have never been stable and are likely to change radically in the years ahead, it is difficult to commit to 5-year plans where the regulatory and financial environment is at best seen only on a two-year horizon.

So at times it is far wiser to know what systems not to integrate, what systems to radically redefine, and what system to phase out. Simple integration of current systems could actually make things worse by making a broken system only break more efficiently. To paraphrase Mayor Richard Daleys’s comments 40 years ago during the Chicago Democratic Convention: “The police are not here to create disorder, they are here to preserve disorder.”

This is precisely the dilemma faced by health care executives. How do they balance IT investments among: systems that may “preserve disorder” and increase short-term operational margins; new systems that may attenuate disorder at the expense of short-term margins and that are not currently associated with a undeniable strategic advantage; entirely new relationships focused on the individual consumer and provider that both pose grave threats to current business models but significant opportunities if the world is changing as rapidly as many believe.


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