Reference no: EM131701924

WHAT WAS THE CASE STUDY ABOUT AND WHAT DID YOU LEARN?

Metro Health’s New Information System

Gordon D. Brown

Metro Health is an integrated health system comprising three urban hospitals that are strategically located in different neighborhoods. The original hospital is in the urban center, while the other two facilities (one of which is a local nonprofit hospital acquired when it incurred financial difficulties) are in growing suburbs. Each hospital has its own medical staff, chief operating officer, and EMR. Metro Health’s governance includes the president and chief executive officer (CEO), chief medical officer (CMO), chief financial officer (CFO), and the board of directors. In the past several decades, the system developed an effective enterprise strategy under the leadership of a visionary and inspiring CEO.

In the 1980s and 1990s, the dominant strategy was to partner with individual members of the medical staff to develop a physician–hospital organization (PHO) to deliver health maintenance organization (HMO) contracts. The PHO was designed as an “open PHO” in which any member of the medical staff could participate. In addition, the system formed an open management services organization (MSO) and established a multispecialty clinic. The impetus for the MSO was to manage HMO contracts and implement an EMR for the clinic. Under this arrangement, the assets were owned and managed by the MSO, but the clinical practice remained the responsibility of the clinicians of the clinic. Metro Health’s CEO and board also developed a strategy to purchase, partner with, or manage various primary care practices and clinics. The underlying motivation for this strategy was to funnel patients into these clinics and the system’s hospitals, realizing the system’s stated mission and vision to provide high-quality care through an integrated service network. None of the primary care clinics had an EMR and none was considered, even in the system-owned practices. The strategy was effective in increasing market share and access to capital, retaining patients within the system, and developing a brand image as an integrated delivery system (IDS). Metro Health was considered a model IDS, and the CEO received national recognition from the American College of Healthcare Executives. Because of his successes and newly acquired national stature, the CEO was aggressively recruited by Sun Valley Health Care, a larger system located in a nicer climate.

The new president and CEO of Metro Health, Catherine Kirk, was attracted to the job by the system’s excellent reputation, strong market and financial position, and history of rapid growth, along with the high salary offer. Catherine found that the system’s corporate strategy and culture fit her style and skills well. The high salary was a statement from the board that the system wants to recruit and retain leaders who would continue to expand the reputation of the system as a national leader in healthcare delivery. Catherine has closely followed the Institute of Medicine’s reports on medical errors and patient safety as well as the revisions to the Medicare and Medicaid programs related to value-based reimbursement. Having previous experience in IT, Catherine is certain that patient access to information and participation in the clinical process are important to attracting and retaining patients. Such a strategy would serve as a way for the system to differentiate itself and strengthen its competitive advantage. In her first few months on the job, Catherine installed chief operating officers (COOs), a chief information officer (CIO), and a chief human resources officer (CHRO). She formed a strategic planning group made up of the CMO, CIO, CHRO, CFO, COOs, and medical directors of each of the three system hospitals and the MSO.

She now brings to the board a preliminary proposal to invest in a new EHR, which has a price tag of more than $100 million,that would integrate the multiple institutions and include a clinical decision support system (CDSS). Even though Metro Health’s financial position is strong with good reserves, the board hesitates to proceed with the investment of this scale because the cost exceeds the system’s previous investments in IT. Catherine argues that an EHR with a CDSS is essential for carrying out the system’s new bold strategy and that the investment would pay for itself by increasing patient volume, much as previous investments have brought in market growth and expansion. The board is concerned that the EHR would be disruptive to the clinical function and would be viewed by clinicians as corporate interference, much as the managed care contracts of the 1970s and 1980s were seen as an intrusion. The board thinks that Catherine is building a management empire instead of serving the best interests of the system. In private discussions, some medical directors express the reservations of their respective medical staffs. They reason that they are in the process of acquiring EMRs for all the clinics to meet the meaningful use standards mandated by the Patient Protection and Affordable Care Act.

The IT tactical plan is to migrate to common system architecture, including unique patient identifiers, a common patient database, a computerized physician order-entry system, and clinical guidelines and protocols. This database would allow physicians to access patient records anywhere in Metro Health, including results, orders, and other data from pathology, radiology, pharmacy, and other areas. Such a system would bring to physicians and other health professionals clinical information that is accurate, timely, integrated, and evidence based and may be used as the basis for clinical decision making. Catherine’s and the strategic planning group’s future plan includes making this information available to patients as part of an integrated personal health record.

You just started a two-year management and informatics residency at Metro Health. Catherine appoints you to help her and the strategic planning group. She wants you to analyze the changes that will occur in the locus of decision authority and responsibility of physicians and key managers within the system. You review various techniques, such as responsibility charting, for examining decision responsibility before and after the change. These techniques provide a systematic framework for identifying the possible changes to the roles and responsibilities of key players (i.e., individual physicians, clinical units, medical staffs, and hospital and system management). Catherine also asks that you work with the CIO and CFO to develop an investment plan for the new IT architecture to show its value-added contribution to the proposed corporate strategy.