The question of how to demonstrate the value of healthcare IT, in a financial environment of shrinking resources, is one I have been thinking about since the start of MHCD. Senior leadership has an inherent understanding of the need for IT and a robust EHR, however, do they appreciate the value added of these same capabilities? Regardless of where a health systems resides on the volume-based to value-based continuum, all leadership has an understanding that further “cost reductions” will be directed at hospitals and physicians, rather than consumers. The result is key business service lines, including IT and medical informatics, competing for limited dollars.
There are several healthcare IT benchmarking services available, all of which use some form of a ratio of IT spend to organizational revenue or operating expenses (IT OpEx as % of Org OpEx). There are also measures of personnel expenditure (Users supported/IT FTE or IT FTEs as % of Org FTEs). The Health Care System for which I work is a member of the Scottsdale Institute (SI), which has multiple well established, data driven IT benchmarks. Based on any SI benchmark we spend 16-24% less than the mean (interestingly, said mean is about 50% less than non healthcare industries), with excellent quality, safety, and satisfaction metrics. So, the response given to requests for more financial resources to support growth of market share has been that “other areas are more in need of the dollars”.
My goal is the define a niche for healthcare IT that is data driven, financially secure, and accepted. Demonstrating value by under investing, falling behind and having IT use and effectiveness problems is suboptimal and provides recovery challenges. To more specifically frame some questions;
- Has anyone developed a strategy for secure, sustainable funding for healthcare IT in their company?
- Are there suggestions for how to approach this from a business perspective, specifically when competing for dollars? We have had some success with aggressively defining Capital Expenses (CapEx) to move below the line, reducing our OpEx.
- I am looking for conceptual ideas that clearly define the important use cases for IT, in order to rise out of the mosh pit competing for dollars.
- What will help senior leadership (mostly non-clinical) understand the importance of investing in IT, and the associated non-monetary ROI?