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Relaxing constraints on technology experimentation by people outside the IT function can lead to a robust system of self-funded R&D — one that generates solutions business users want and need.
By Scott Blanchette, SVP and CIO, Vanguard Health Systems
Several years back, one of our doctors wanted a way to track “near misses”: clinical mistakes that are caught before they seriously harm a patient. Did he come to us, the experts in IT, to place his request? No, he went to his next-door neighbor. Together they created a simple iPad app that now provides our whole company with information that has greatly improved the quality of the care we provide our patients.
This is an example of one of the most significant trends in IT today, what I call “innovation by amateurs.” At Vanguard, two forces have intersected to drive the open IT innovation process. The first is our team of highly educated and entrepreneurial physicians, most of whom operate as independent contractors. The second is what I refer to as the “Applification of IT.” Apple made the computing experience both simple and appealing, and it has become extremely easy for people to research, implement, adopt, and scale solutions. Suddenly, CIOs find themselves on the back side of the R&D curve, with key constituents way out in front.
Rather than try to bend the curve or regulate behavior, we decided to make the curve work for us. Since joining Vanguard as CIO, in 2011, I’ve encouraged our user base to find and vet solutions, and to look at IT as the arm that will industrialize and scale them in a way that makes sense for the rest of the enterprise.
Those Persistent Calls from the OB Nurse
One of the early examples of this kind of innovation was with a group of our obstetricians in San Antonio. Every blip in the labor and delivery process tended to trigger a call to the doctor from the OB nurse, who would try to explain what he or she was seeing on a paper strip coming out of the fetal monitoring equipment. The doctor would have to figure out if it constituted a problem that required immediate attention. Imagine you’re delivering multiple babies at the same time — that’s really hard to do.
So this group of physicians went out and found an OB-monitoring waveform application built by a local physician. They installed it and got some IT folks to populate it with monitoring data. They fell in love with it, because it eliminated many of the phone calls and alerts, they no longer felt detached from their patients, and they didn’t have to worry about what was going on if they weren’t getting any calls. It helped them make sound clinical decisions remotely and become more efficient in their practice.
Think about it — what I’ve just described is the world’s best self-funded R&D scenario. The doctors went out and identified the problem, identified the solution, vetted it in a traditional R&D way, and then came to me with a proposition to scale it across the enterprise. We have lots and lots of clinical specialties that have gone through the same exercise.
This is a huge shift. During my previous stint in the hospital space — about nine years ago, at Stanford Hospital, where I was the director of IT — this kind of activity was verboten. Something like this would have been considered a rogue application, and we had policies and procedures, up to and including termination, that forbid this kind of behavior. We had an R&D group that worked on building or buying solutions; nothing got into production without coming through that group. Today at Vanguard we don’t have an R&D team; instead, we have one R&D guy who is essentially the gatekeeper for other people’s ideas.
Of course, we’re still something of an outlier. The hospital industry overall is very conservative. We were founded and are run by a serial entrepreneur, and that’s in our DNA. Many of my peers — especially in for-profit hospitals — think very differently. But this will change. And I think the kind of experimentation we’re engaged in will become more common in many industries, from financial services to retail to transportation.
Managing the Process
Early applications, like the one created by the OB doctors, created a bit of a floodgate effect at Vanguard. We had to convince people that our welcoming their ideas wasn’t an anomaly — it was going to be our new way of operating. But once it was clear we were serious, a deluge of ideas came pouring in; I think people were afraid that the floodgates would be closed again once we came to our senses!
Our next step was to define a governing process to deal with the introduction of new ideas. It had to be understandable, and we had to let people know this wasn’t an opportunity for us to say no but a way for us to say yes, at scale. We wanted everyone to understand that there would be a commitment from us to scale their ideas once they passed through the appropriate gates.
We have a dedicated vice president of technology innovation, growth, and strategy who vets these ideas according to criteria we’ve developed:
1. Is this a solution that we could scale to solve many problems?
2. Can it make it across all the regulatory hurdles?
3. Does it fit into a reasonable support model? (If some- one comes across an esoteric system and I have 50 esoteric systems that we have to integrate it with, it won’t be economical to scale.)
4. Is this something that’s going to drive meaningful growth, profitability, or clinical quality? Actually, that goes at the top of the list.
The ideas don’t need to be fully formed, with a fully developed business case — some of the best ones haven’t been. Just a few years ago at Vanguard, you didn’t bring forward an idea unless you had a fully vetted business case, with a multiyear pro forma and a reasonably defensible implementation plan and resource model. People didn’t bring that many ideas forward, because there was sort of a haze around how they were vetted. Now I tell people, just bring your ideas — we’ll develop the rest. We’re not soft about the business case; when we do scale something, we expect to see tangible benefits. But we didn’t want to temper people’s enthusiasm with an overly bureaucratic process.
The Last Mile: Security, Compliance, and Scale
In an environment of distributed innovation, IT is basically responsible for the final part of creating and implementing a solution. It’s our job to vet things like security and privacy. In our case, anything that involves patient information obviously has to be vetted. Making sure we meet HIPAA requirements is the first bar, but we have to treat certain types of patient information with particular care. For example, in California the transmission across state lines of data related to substance abuse, HIV, STDs, or clinical conditions associated with being the victim of a violent crime triggers fairly onerous penalties.
Once a solution makes it over these security and privacy hurdles, we have to see if it can be scaled in a way that allows physicians to benefit from it. Although we don’t get much credit for it, scaling isn’t all that easy. We’re a large, complex enterprise that’s grown through M&A, and we’ll get larger and more complex with our recent acquisition by Tenet Healthcare. We have multiple OB applications in different markets and even in different hospitals within a market. Scaling the application across the enterprise requires integrating those various OB monitoring systems, and that’s somewhat technologically complex.
IT’s job these days is not so much to drive development but to complete the last mile — to industrialize and scale a solution. In the past, business owners would articulate the business problem and IT would write that down, go into conclave, come up with a solution, and go back to the business people. There would be multiple cycles to design, implement, test, vet, and finally get to the point where the solution could be scaled. All of that created huge interpersonal issues between IT and the business. It created a financial burden, and it had cycle- time consequences. All of that is gone now. It’s taken the albatross off the backs of people on both sides of the table.
Letting a Thousand Flowers Bloom
So far, people at Vanguard have developed hundreds of ideas and dozens of apps. Some of these have been really profound in terms of their impact. Take, for example, the “near misses” app. One of the things that’s pervasive in health care is the under-reporting of mistakes that have been caught before they seriously harm a patient. We do a great job of reporting the mistakes that cause harm, because we’re legally obligated to do so. But we do an awful job of reporting the near misses — for example, when someone is almost given the wrong medication. At some point in this kind of incident, there was an intervention that prevented the patient from being harmed, but there may have been six process break- downs before that happened. Organizations rarely have visibility into that.
A doctor in our advanced leadership program was doing a study on under- and unreported serious safety events. He (and that next-door neighbor of his) wrote a very simple iPad app that captures the date of the event and the unit where it occurred. It has a free text field for a description of what could have been done differently. The response we got when we rolled this out enterprise-wide was astounding — a huge number of near misses had been either under-reported or unreported. This provided incredible insights for us, and responding to these near-miss safety events, rather than focusing just on the ones that actually harmed someone, has had a huge impact on our quality of care.
A New Role for the CIO
I hope that in my lifetime I get to see the day when the CIO really is the chief innovation officer helping to transform the business, not the person who runs the data center hogging all the electricity in the basement. CIOs have three main areas of prowess. The first is technology — and hopefully all CIOs have that box checked. The second is business operations; more and more CIOs have that box checked. The third is market prowess — an understanding of how the marketplace is changing, the nature of the competitive landscape, and what the organization must do to adapt and remain viable. If we as CIOs can master the first two areas, it frees us up to provide opportunities to drive innovation investments and transformation and to contribute to the business in all sorts of meaningful ways.
For example, we had six old data centers that were about to fall down. Rather than just replace them, which would have required a ton of capital for no extra return, we decided to create an IT services company with a cloud offering surrounded by some IT support services. Our intention is to migrate the six data centers to this cloud — and at the same time to offer this service to small and midsize hospitals and hospital systems, which struggle to make the necessary investments in IT. The creation of a new business like this is one way IT can provide a new source of value for Vanguard.
The Benefit of an Unconventional Background
If CIOs want to add value to their organizations in this time of significant disruption, they must be willing to take risks. Not having followed the traditional CIO career path, I got to skip lots of the awful lessons CIOs learn in IT. If I’d grown up as a help-desk manager getting yelled at six times a day, I’d probably be much more risk averse than I am. A lot of negative behaviors get reinforced as people move along that career path, and it creates a risk-averse corps of CIOs.
Instead, I was fortunate to come out of a community — the U.S. military’s special operations community — that’s known for accomplishing things that most people think are completely impossible. We were trained to believe there’s always a way to accomplish an objective, and I try to imbue a lot of the special-ops principles in my team.
We know we can achieve things that others find too difficult. We can do them on a timeline that seems irrational, using techniques that others consider to be highly unconventional. These values are wrapped in a corporate culture founded on trust, teamwork, mutual respect, and selflessness.
Demanding as that philosophy is, it’s one that CIOs need to embrace in these demanding times.
Originally published in CIO Straight Talk, No. 4 (December 2013)
The doctors at Vanguard Health Systems identified a problem, developed a solution, and vetted it. IT got involved only at the end of the process, clearing regulatory hurdles and scaling the solution across the enterprise.
It’s important to establish a process for handling new ideas that bubble up in a company. The ideas don’t need to be fully formed, with a fully developed business case — but they do need to drive meaningful growth.
To add value to their organizations in this environment of significant disruption, CIOs must be willing to take risks, to try unconventional approaches that might seem impossible.