At the crossroads of change and constancy: while technology advances and IT improvements directed at patient safety dot the landscape, healthcare CIOs remain focused on objectives to improve their organizations' performance--and their own rewards, too.

There's an old saying: The more things change, the more they stay the same. For healthcare CIOs, their landscape and challenges are fluctuating, but many of the personal drivers of job satisfaction, career development and personal attainment have stayed roughly the same for the five years that Health Management Technology has conducted its annual healthcare CIO survey.

One thing is for sure: Healthcare CIOs are just as dedicated to healthcare as they are to information technology. In 2003, a total of 138 healthcare CIOs and IT directors responded to the HMT survey, with nearly one-third (31 percent) indicating a track record in healthcare of 20 years experience or more. In addition, with almost uncanny consistency, CIOs reported either 14 percent or 15 percent for fewer total years of healthcare experience including two to five years, six to 10 years, 11 to 15 years, and 16 to 20 years. Healthcare is a get-in-it/stay-in-it field.

Demographics: Who They Are

Just over half (51 percent) of responding CIOs emanate from organizations with beds: 23 percent comes from integrated delivery networks (IDNs), 25 percent from academic medical centers and 3 percent from single or free-standing hospitals. Another 12 percent of respondents represented physician group practices, and 9 percent represented managed care organizations. This year, a sizable 27 percent came from other organizations, too, such as community mental health centers, long-term care systems and independent laboratories.

For those CIOs working in organizations with beds, the spread was extremely even from smallest to largest organization: 17 percent from organizations with fewer than 100 beds, 15 percent with 100 to 199 beds, and 13 percent with 200 to 299 beds. Even at the top levels, 11 percent reported working for organizations with 1,000 to 1,999 beds, and another 11 percent came from IDNs with more than 2,000 beds.

Differences in organizational size were much more apparent for CIOs and IT directors at managed care organizations (MCOs). MCOs represented more the extremes, with 46 percent of responding health plan or payer CIOs working with memberships of 250,000 or fewer, but another 38 percent of them working with membership of at least 1 million and often more than 3 million.

Men outnumber women, 83 percent to 17 percent, and 46-years-old is the average age. A full 40 percent of respondents have a master's degree, and another 31 percent have a bachelor's degree.

Budgets

Even with challenges like HIPAA compliance and patient safety, and the consequent demand for systems such as physician order entry, IT budgets are not necessarily rising to meet the technology demand.

As CIOs and IT directors have indicated in the past surveys, they again indicate that IT competes with many other demands for a share of the HCO dollar. In our 2003 survey, 58 percent of respondents indicate their IT budgets are the same or lower than 2002--a year when 50 percent reported increases. The 42 percent whose IT budgets increased in 2003 saw jumps of an average 15 percent. On the bright side, stabilization was more common: 46 percent of IT departments were working with the same budget, compared to only 37 percent who worked with previous budget dollars in 2002. Even so, 58 percent of our survey respondents work in organizations that spend $2 million or less per year on IT (Figure 1).

The tight budgets are reflected in another measure, compared to CIO survey results reaching back to 2000: Most spending for IT in healthcare hovers around 2 percent of overall operating budgets. Confirmed yet another year, in 2003, only 23 percent of organizations were spending more than 2 percent on IT (down from 25 percent last year).

Salaries and Bonuses

CIOs and IT directors fare better than many in healthcare (Figure 2), with an average salary of $104,715. Of course, this figure fluctuates substantially based on size of the organization and number of employees supervised. In 2003, 72 percent of top IT management did receive, on average, a 5 percent increase in base salary. Similarly, 81 percent anticipate getting a salary raise in 2004, which they project at about 4 percent.

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Bonuses are a different story, though. Only 55 percent of CIO respondents said they are eligible to receive bonuses, 45 percent are not, and not everyone who was eligible was rewarded. Only 41 percent of respondents did receive bonuses in 2003, although the amounts were healthy--averaging in the $15,000 range. The majority of bonuses are based on the annual performance of the organization, with another 35 percent based on individual annual goals.

Does it pay to stay in healthcare? Yes, it does, especially after the 11-year mark (Figure 3). While 2002 survey respondents indicated fairly constant-and almost flat--salaries up to the 16-to-20 year mark, after which they jumped by about 45 percent, respondents this year reflect constancy only up through the 10-year mark. After that, salaries jumped more than 40 percent, reflected a crossover to six figures and climbed steadily based on more experience.

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Job/Salary Satisfaction

Each year, our HMT survey asks CIOs and IT directors to rate their satisfaction, on a five-point scale, for both their positions and their compensation. Figure 4 displays results, which chart a moderate increase in the degree of satisfaction over the 2002 survey.

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In 2002, 81 percent of all respondents said they were satisfied, very satisfied or extremely satisfied with their current jobs, with only 19 percent reporting some dissatisfaction. This year, the percent of those saying they were, at some level, satisfied increased to 92 percent.

CIO responses indicated greater satisfaction than in the past. In 2002, 63 percent of all respondents said they were satisfied, very satisfied or extremely satisfied with their current salaries; in 2003, that number increased to 79 percent. Largely responsible for the shift was the group reporting some dissatisfaction with their salaries, which went from 30 percent in 2002 down to 17 percent in 2003. Similarly, the group that said they were very satisfied with their salaries went from just 17 percent in 2002 up to 28 percent in 2003.

Chain of Command and Longevity in Healthcare

As might be expected, CIOs report in only a handful of directions, but the results indicate the chain of command is continuing to broaden.

This year, 38 percent said they report to the CEO or president of the organization, while 28 percent report to the CFO. Another 14 percent report to the COO, and a full 20 percent report to other positions such as senior vice presidents. This contrasts to previous years, when as many as 77 percent of CIOs and IT directors reported to the CEO or CFO, and when fewer than 15 percent reported to individuals outside the CEO-CFO-COO trio.

As in past years, CIOs responding to the 2003 survey appear dedicated to staying in the healthcare arena. Sixty percent of respondents have already amassed 11 or more years of experience in the field. But within the healthcare arena, CIOs remain a mobile bunch (Figure 5). A surprising 64 percent have been in their current positions for five years or less, indicating that while they stay in healthcare, they move around in the sector.

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Enticements to Stay or Leave

By more than a 2-to-1 majority, healthcare CIOs are in healthcare by design, with a total of 71 percent indicating that their three-to-five year plan was to stay either in their current organization (56 percent) or change to another HCO (15 percent). A mere 3 percent saw themselves moving into non-healthcare organizations, down from the 9 percent indicating this intention in 2002. Again, small numbers saw themselves going to work for consulting firms (7 percent) or becoming self-employed (also 7 percent).

That doesn't mean healthcare CIOs aren't reading the menu--including the right-hand column. When asked which factors would entice them to leave their current positions for a CIO or IT executive-level position at a different HCO, 74 percent said better compensation and benefits, and 62 percent cited location. At a distant third place (41 percent) was greater responsibilities and challenges, followed by both organizational size/financial stability at 38 percent, and IT inclusion in strategic planning, also at 38 percent.

But the reasons to leave or stay in a job are quite different. While CIOs might be enticed to leave their jobs for a healthier compensation, compensation is not a reason to stay. Only 8 percent cited their compensation package as the most important factor in keeping them satisfied enough to stay in their current positions. In contrast, 31 percent identified the challenges, opportunities and responsibilities of their current positions; another 27 percent said it was their ability to improve, influence and contribute to the healthcare enterprise; a final 13 percent cited their organization's commitment to IT and executive management's support for it.

While CIOs might not assess their current jobs with money in mind, money clearly plays a role when they look beyond. When it comes to benefits and perks that CIOs deem most desirable, but that they don't currently receive, a majority of 52 percent said they would like a richer retirement plan and/or a higher contribution from the organization, and 41 percent want bonuses tied to performance. But, by the same token, CIOs in 2003 reported slightly lower interest, overall, in most perks and benefits than did the respondents in the 2002 survey (Figure 6).

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Top Challenges and Priorities

For the third consecutive year, HIPAA failed to appear as a significant challenge for healthcare CIOs, indicating that it's a done deal, at least in terms of the obstacles it presents. Three years ago, more than one-third of survey respondents named HIPAA as their top challenge; in 2001, fewer than 20 percent did. Last year, the number citing HIPAA was only 13 percent, and for 2003, a mere 5 percent named it No. 1.

For the past several years, three issues germane to the landscape of healthcare CIOs have wrestled for and juggled top honors in the challenge department: the organization's culture and structure, financial constraints and the organization's increased demand for IT services. This year, the No. 1 spot went to financial constraints, with 30 percent of CIOs identifying it as their greatest hurdle. Close behind it was the issue of the organization's culture and structure, with 26 percent of CIOs citing it as their biggest challenge, followed by organizational demands for IT services (21 percent).

Although their ranks as the No. 1, 2 or 3 challenge vary slightly from one year to the next, these three issues--all particular to the individual HCOs that CIOs work for, rather than imposed from outside such as HIPAA--continue to reflect a healthcare landscape that's slim on resources but heavily laden with demand from varying internal constituencies.

While HIPAA is barely a squeak on the challenge meter, still it consumes the healthiest share of implementation resources, with 49 percent of CIOs responding naming it among their top three priorities for the next 24 months.

Aside from the notable spike in compliance efforts, CIOs' implementation priorities for 2003 are largely a mirror image of their 2002 priorities (Figure 7), with a couple of significant exceptions.

CIOs, ROI and Strategic Plans

The healtheare landscape is dotted with thousands of software and hardware suppliers; they all want to know what HCOs are buying, who is making the decisions and how.

Making the business case for enterprise software and hardware purchase decisions is more important than ever. In a resource-thin environment, dollars expended must generate a proven ROI. In fact, a total of 50 percent of respondents said that ROI is so critical, it must be demonstrated for every purchase (17 percent) or must be demonstrated for all purchases above a specific cost threshold (33 percent). Another 30 percent said ROI is considered in concert and on a par with other strategic factors in making purchases. Only 14 percent said that ROI is considered on a case-by-case basis.

Once the business case is proven, though, the seas grow calmer. A full 33 percent of responding CIOs said that following demonstration of ROI, purchase requires only a CI0, CFO, CEO or equivalent approval. But, at the same time, at 27 percent of organizations, purchase requires not only approval by an executive committee of enterprise department managers, but also concurrent approval by the HCO's board of directors. Another 20 percent said the purchases required approval by an enterprise executive committee plus senior management of the IT department. Fourteen percent of survey respondents said they could approve purchase decisions independently based on a cost threshold.

Just as important as the business case, the enterprise strategic plan plays a significant role in determining the direction of purchases at many HCOs. Nineteen percent of CIOs said their organizations' strategic plans completely direct the purchase of new information technology; another 52 percent said the plan is very important, although annual purchase decisions not reflected in the plan are possible.

Qualifications

Again in 2003, healthcare CIOs demonstrated clarity and enthusiasm in delineating the quality, traits and skills most significant to becoming a successful CIO.

For the second consecutive year, communications skills were cited as the most critical qualification (86 percent), followed by leadership and vision (81 percent), with strong attention to integrity (70 per cent) and attention to customer service (61 percent) (Figure 8).

Overall, the numbers in 2003 represent a close parallel to the 2002 respondents' numbers, with minor exceptions. CIOs apparently are putting a little less stock in creativity and flexibility, concern for people, formal technology training and acceptance by senior management as requirements for success--and a little more stock in ongoing technology training, even at the senior level.

Figure 1
Distribution of Respondents by Organization's Total
Operating Budget and by Organization's IT Budget

Organization's Total 200% Respondents   Organization's 2003
Operating Budget                        IT Budget

Under $25 million            37%        Under $500,000
$26 to $50 million           11%        $500,000 to $1 million
$51 to $100 million          12%        $1 to $2 million
$101 to $200 million          3%        $2 to $3 million
$201 to $350 million          6%        $3 to $5 million
$351 to $500 million          6%        $5 to $7 million
$501 to $750 million          5%        $7 to $10 million
$751 to $1 billion            5%        $10 to $15 million
$1 to $1.5 billion            4%        $15 to $20 million
$1.5 to $2 billion            1%        More than $20 million
More than $2 billion          5%
Don't know                    5%

Organization's Total 200% Respondents
Operating Budget

Under $25 million            27%
$26 to $50 million           19%
$51 to $100 million          12%
$101 to $200 million          4%
$201 to $350 million          7%
$351 to $500 million          6%
$501 to $750 million          3%
$751 to $1 billion            5%
$1 to $1.5 billion            6%
$1.5 to $2 billion           12%
More than $2 billion
Don't know

Figure 6
Perks and Benefits CIOs Would like to Receive in the Future

                                                2003       2002
Richer retirement plan, higher contribution      52%        62%
Bonuses tied to performance                      41%        43%
More conference education and travel             39%        50%
More vacation/paid time off                      34%        34%
Fully paid health plan                           34%        39%
Car allowance, company car                       26%        20%
Professional memberships                         18%        25%
Club memberships (health, country club)          15%        16%

                     Figure 7
 Implementation: CIOs' Top Three IT Priorities for the
                   Next 24 Months
                               2003        2002
HIPAA security and              49%        68%
privacy compliance
EMRs/CPRs                       26%        29%
Wireless hardware and           22%        19%
software
Integration of HIS/             21%        19%
clinical/financial
systems
Diagnostic imaging/PACS         20%        18%
Workflow automation             20%        12%
technology
Clinical decision               20%        13%
support systems
Physician/clinician             16%        19%
adoption of technology
Patient safety/                 15%        11%
medication error reduction
Network management and          15%        25%
security

              Figure 8
    Training, Skills, Qualification and
  Characteristic Needed to be a Successful CIO
                               2003       2002
Communication skills           86%        88%
Leadership, vision             81%        82%
Integrity                      70%        72%
Attention to customer          61%        66%
service
Creativity and flexibility     59%        73%
Intelligence                   57%        61%
Concern for people             56%        62%
Acceptance by senior           54%        68%
management
Desire for responsibility      46%        45%
Ongoing technology training    38%        28%
Ambition                       36%        41%
Formal technology training     30%        37%
Appearance                     20%        27%
Previous CIO experience        19%        21%
(healthcare)