How Penn Medicine’s IT department integrates with operations to capitalize on high-priority investments
In August 2023, Healthcare IT news sat down with John P. Donohue, vice president of IS entity services at Penn Medicine Information Services, to discuss what an entity information officer is and why healthcare organizations might need some.
Penn Medicine is at the forefront of entity services, and Donohue offered a deep dive on the topic. Today we look again at Penn Medicine and Donohue to build on the topic of entity services and discuss how the IT department can effectively integrate with business operations to strategize and achieve the goals of high-priority investments.
Donohue speaks here about creating opportunities for standardization in a complex healthcare system, determining the priority for initiatives across the healthcare system, realizing the benefits of the programs and projects, and identifying opportunities for efficiencies and cost savings.
Q. Where’s a good place for CIOs and other technology leaders in hospitals and healthcare systems to start when it comes to effectively integrating IT with business operations to align and leverage high-priority investments?
A. There are several key touchpoints that are critical to aligning IT with business for high-priority investments. The first and perhaps most important point of contact is the annual budget planning process. In many cases, this is where critical discussions take place about the organization’s overall priorities, its willingness to invest, and its ability to staff such investments.
At this time, the organization is announcing its intentions regarding both capital investments and the operating costs required to realize the investment. This process becomes more complex for large healthcare systems, where this coordination must occur across the enterprise.
At Penn Medicine, the focus of the alignment and investment process is on consolidation and standardization on specific platforms for cost optimization purposes.
Moreover, we tend to rely on our mature governance processes, which in some ways are part of our organizational DNA. These governance processes are very effective and really serve to strengthen alignment, allowing any discussion about prioritization and standardization.
The regular rhythm of these board meetings ensures that we never stray too far from the alignment agreed as part of the annual budget process.
Finally, we typically rely on a highly collaborative approach when executing projects for large-scale investments that require coordination. This means that both IT and operations play a role when it comes to realizing the return on investment associated with high visibility projects.
This approach has allowed us to stay focused on the overall benefits associated with an investment, and has reduced the need for finger-pointing when challenges inevitably arise. Our approach encourages IT and operations to stay aligned and dedicate more focus and resources to successful delivery.
In summary, the alignment between IT and operations activities starts with the budget planning process. Then, it’s critical to leverage existing governance processes to maintain alignment while discovering, staffing, and executing the high-priority investments.
Finally, the ‘special sauce’ is that senior managers from the IT and operations sectors retain joint ownership of the investment initiatives by delivering and realizing the identified benefits.
Q. You argue that creating opportunities for standardization within complex healthcare systems is critical. How can healthcare IT leaders do this?
A. I would go a step further and suggest that senior IT leaders should drive this standardization across complex healthcare systems. Without a strong stance on standardization, the IT organization and IT-related expenditures will never be cost-effective.
With the cost and investment headwinds facing most healthcare organizations today, this should be viewed as the commitment to running a mature organization.
In my opinion, standardization starts with creating a centralized IT organization that eliminates shadow IT across the organization. A centralized IT organization is more efficient and allows healthcare systems to eliminate the costs associated with redundant functions and capabilities.
An enterprise-wide IT organization has optimal visibility into IT investments across the organization and has its finger on the pulse of business and clinical needs and key investment priorities. This centralized organization can now focus on rationalizing infrastructure and applications, leading to further efficiencies that drive out more costs while improving system reliability.
Once you have an effective, centralized IT organization, coordination across the enterprise will run more smoothly. To further support this alignment on a daily basis, we have created the role of an Entity Information Officer.
At Penn Medicine, we have several organizational units that we call “entities.” For example, each of our hospitals is considered an entity. This EIO role reports through IT, but the leader is embedded in the entity and works closely with the operational leaders.
This IT leader has a team of people they use to focus on local support requirements. This EOB plays an advocacy role for both IT and operations and has allowed us to look at standardization opportunities as entities look at new technologies or refreshing end-of-life technologies.
Finally, the centralized IT organization can strategically focus on key platforms that have been adopted as standards across the enterprise. An enterprise-wide commitment from both IT and operations leaders to these platforms paves the way for easier discussions about standardization and lastingly driving costs out of the system.
Q. You say that strategically prioritizing initiatives across the healthcare system is fundamental to the effective integration of IT with business operations. How can this best be done?
A. We have found that having a formal prioritization process is critical to effective alignment between IT and business. I talked about some of the things that are critical to acting as foundational pieces: centralized IT, standardization around key platforms, and leveraging governance.
The next step is to strategically prioritize the investments so that they are ordered as effectively as possible, remembering that delivering world-class healthcare in 2024 is a dynamic proposition – priorities are shifting.
At Penn Medicine, we have a very formal prioritization process. Each of the entities sets its priorities (usually based on the annual budget process). With IT support, a detailed discovery process is conducted around their priority requests.
This process identifies the nuances of the project, the investments required (capital and operations), the personnel requirements and, most importantly, the return on investment.
These priority investment requests are regularly reviewed by a panel of senior leaders, including our CIO. This is usually the moment when the green light is given for the start of an initiative. This also serves as a final opportunity to look for further standardization opportunities and ensure that IT activities are aligned. This approach does not entail any surprising investments.
Q. What should healthcare IT leaders do when it comes to realizing the benefits of programs and projects?
A. In our organization, IT leaders are part of the process to identify and then confirm the realization of benefits. Our project managers are involved early and often in the planning process. They work closely with operations to identify opportunities for benefits, both within IT and within the operating entity.
When these capital projects are completed, we then work with operations again to confirm and validate the realization of the identified benefits. In addition, every two years we produce a formal benefits realization report, which reflects on the investments made over the past two years, identifying and documenting the audited benefits.
This approach has created a culture where leaders know they are responsible for realizing the benefits they outline when proposing an investment. This also shows that the alignment between IT and operations spans the entire life cycle of the investment – from planning to execution and documenting the benefits.
Q. What are best practices for identifying opportunities for efficiencies and cost savings?
A. The most important best practice is to have a formal process that both IT and operations work on together. If an organization has the discipline to implement and live by these types of processes, leaders know they must adhere to these rules.
IT and operations leaders know that their priorities and initiatives won’t get much attention without identified efficiencies and cost savings. In today’s world, an initiative without a fairly quick return on investment is a hard sell.
It doesn’t take long for IT and operations leaders to develop a knack for identifying efficiencies and cost savings. Smart leaders figure this out pretty quickly. The first few years are usually quite easy as there is some low hanging fruit.
As organizations mature, these savings opportunities become more difficult to identify and realize. With automation capabilities and generative AI, we now see opportunities that we could not have realized years ago.
In summary, smart leaders in both IT and operations know where to identify savings through investments. It’s a matter of instilling the discipline and rigor so that they know they must deliver a return on their investment and then be held accountable downstream when the project is completed.
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