Project Management's role in transforming healthcare through healthcare information technology.November 2005
A $1.7 Trillion Industry
Healthcare is a $1.7 Trillion industry in the US (California Healthcare Foundation, 2005). It is 16% of the US GDP GDP (guanosine diphosphate): see guanine. and has been growing over the rate of inflation for several years. Combined with the demographic realities of an aging US population that is steadily consuming more healthcare services, these trends lead informed observers like General Electric's CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Jeff Imelt to predict that healthcare expenditure will be 18-20% of US GDP in 3-5 years. Clearly Americans are spending lot of money on health care.
What are US citizens getting for their investment in healthcare? Given the size of the industry, that is a complex question. By some measures, Americans enjoy a high level of quality healthcare services. Other measures, including the number of uninsured and under-insured Americans, are not so encouraging. At least 40 million Americans are without health insurance of any type. And now, within the past five years, there are significant concerns about the safety of the healthcare services. The Institute of Medicine, a respected public/private research body, indicates that at least to 48,000 Americans die every year of medical errors (Kohn, Corrigan, and Donaldson, 2000). One significant contributor to this problem is suboptimal Suboptimal
A solution is called suboptimal if a part of the solution has been optimized without regards to the overall objective. healthcare information management.
A Transformational Vision
While banking, insurance and other information intensive industries enjoy very high degree of information automaton automaton: see robot; robotics , healthcare, by and large, does not. President Bush, in his 2005 state-of-the-union address said "Most industries in America have used information technology to make their businesses more cost effective, more efficient and more productive--and the truth of the matter is health care hasn't..." (McGee, 2005). In order to stem the rise in healthcare costs and improve patient safety, Bush has challenged the healthcare industry to have comprehensive, widely penetrated and highly functional, electronic health records (EHRs) in 10 years. To a certain extent he has put his money where his mouth is, creating the Office of National Health Information Technology and seeding more than $100 million in healthcare information technology (IT) projects and research in 2004 alone. It's a bit hard to estimate, but all this has led to healthcare entities to spend in excess of about $8 billion dollars per year in new healthcare information technology projects starting in 2004. This rate of expenditure is likely to increase annually for 10 years. By any measure this is a lot of money.
PM in Healthcare Compared to Other Industries
IT professionals within healthcare, and healthcare leaders and managers of all sorts, have now embraced the challenge of applying healthcare IT to lead the transformation of healthcare into more effective care that minimizes error and controls cost. Now that healthcare has a clear mission how are they going to achieve it? Many healthcare organizations are counting on program and project management to get them there, but there has been a perception within healthcare IT that project management is less practiced and, when it is, less effective than other industries. Preliminary data analysis of a survey of healthcare IT project managers comparing their project outcomes to non-healthcare IT project managers indicates that this common perception is untrue un·true
adj. un·tru·er, un·tru·est
1. Contrary to fact; false.
2. Deviating from a standard; not straight, even, level, or exact.
3. Disloyal; unfaithful. and that there is no significant difference in project success between the two groups (personal communication, Richard Lang, EdD). Although encouraging, advocates for healthcare IT project management cannot rest on their laurels. Like other industries, there is considerable room for improvement in project management (PM) practices that can affect positive outcomes.
Certainly, as in other industries, there is IT in healthcare, but prior to this large national initiative it was not in the purview The part of a statute or a law that delineates its purpose and scope.
Purview refers to the enacting part of a statute. It generally begins with the words be it enacted and continues as far as the repealing clause. of the clinicians, whose processes remain largely not automated. Therefore, the involvement of physicians, nurses, and other clinical professionals must be considered a factor in understanding the potential for PM to contribute to the mission of widely penetrated, highly functional electronic health records within ten years. The push for electronic health records will dramatically change the way clinicians practice and interact with patients. If those practice changes are to be an improvement, fundamental PM principles suggest that active involvement of those clinicians in the transformation of their practices is critical. Therefore, PM practices and principles, which are not generally understood and known to clinicians who are being counted on to successfully complete the electronic health record mission, need to be introduced to physicians, nurses, and other clinicians. Clinical informaticians can help with this challenge.
The relatively new sub-disciplines within healthcare of nursing informatics Nursing Informatics is a specialty of Health care informatics which deals with the support of nursing by information systems in delivery, documentation, administration and evaluation of patient care and prevention of diseases. , medical informatics medical informatics,
n the field of information science concerned with the analysis and dissemination of medical data through the application of computers to various aspects of health care and medicine. , pharmacy informatics Pharmacy informatics (PIX), also referred to as pharmacoinformatics, is the application of computers to the storage, retrieval and analysis of drug information. and dental informatics Dental informatics is the application of computer and information science to improve dental practice, research, education and management. During the last forty years it has developed into a research discipline of significant scale and scope. are sometimes wrapped up into clinical informatics Clinical Informatics is a sub-field of medical informatics. It focuses on computer applications that address medical data (collection, analysis, representation). Clinical informatics is a combination of information science, computer science, and clinical science designed to assist . Clinical informaticians are nurses, doctors, pharmacists This is a list of notable pharmacists.
Applying Extreme Chaos
The Extreme Chaos Report (Standish Group International, 2001), the latest IT project management success survey available on the Standish Group's web site indicates that there has been considerable improvement over the original 1994 Chaos Report. Project success, defined as project completion on time and within budget was up to 28% from 16%. Failed projects were down from 33% to 23%. The percentage of "challenged" projects changed less, down from 56% to 48%, but the time and cost overruns Noun 1. cost overrun - excess of cost over budget; "the cost overrun necessitated an additional allocation of funds in the budget"
cost - the total spent for goods or services including money and time and labor --which constitute the challenge in challenged IT projects-- improved dramatically with time overruns decreasing from 222% to 63% and cost overruns decreasing from 189% to 45%. It is reasonable to assume that a 2005 survey would show continued improvement but not as dramatic as the difference between 1994 and 2001. This is because all the easy project performance gains have already been achieved. If we apply this data to 'challenged' new IT projects in healthcare, there would be $1.32 Billion in cost overruns alone in 2005 even if we assumed that only 40% of the projects were challenged and the amount of cost challenge was a 33% overage Overage
Apples mainly to convertible securities. Difference between how much common stock one party must sell and the other wishes to buy for the same amount of convertible in a swap. . Similar projected losses from failed projects will add up to $1.8 Billion in 2006. There is clearly room for further improvement.
How PM Can Help
Strengthening the project management function in healthcare can help many healthcare organizations, not only for transformation of practice and the adoption of the electronic health record mission, but also for research projects, facilities projects and many other types of programs and projects in this complex and dynamic industry. A Project Management Office (PMO PMO Prime Minister's Office
PMO Premier Oil Plc (stock symbol)
PMO Pasteurized Milk Ordinance (USA Milk Industry)
PMO Provost Marshal's Office
PMO Postmenopausal Osteoporosis ) approach, true executive support of PM, enhanced PM training, and agile or extreme PM will be discussed as demonstrable de·mon·stra·ble
1. Capable of being demonstrated or proved: demonstrable truths.
2. Obvious or apparent: demonstrable lies. ways of strengthening the PM function in healthcare. All this can lead to substantial cost savings.
Like other industries, the PMO approach is starting to gain traction Traction Definition
Traction is the use of a pulling force to treat muscle and skeleton disorders.
Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. in healthcare. Nonetheless, PMOs remain less than 10% penetrated in healthcare based on anecdotal anecdotal /an·ec·do·tal/ (an?ek-do´t'l) based on case histories rather than on controlled clinical trials.
anecdotal adjective Unsubstantiated; occurring as single or isolated event. surveys this author has conducted in healthcare IT project management workshops in the past two years. Whether organized as a PMO or a project management support group, a centralized cen·tral·ize
v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es
1. To draw into or toward a center; consolidate.
2. project function can provide consistent methodologies, training and support to sustain project management practice and principles in an organization. Executive and upper management support of project management has been identified as a critical element of overall organizational project management Organizational project management addresses the factors involved in successfully delivering projects within an organization. Project management addresses the factors involved in initiating, planning, executing, controlling, and closing individual projects. effectiveness. How this support is operationalized is variable, but the most effective executive support incorporates PM success in the organization's reward and recognitions structure. Once the connection is made by healthcare executive between the power of PM to make the vision of transformed clinical practices through IT and the vision itself, effective leaders will follow through and adequately support PM. Foundational and continuing Project Management training within and beyond the clinical informatics and IT personnel groups is advised in the healthcare industry. If an effective PMO-based training and support mechanism exists, this may be an ideal situation. Equally effective is PM training from an outside vendor or a combination of external and internal instructors. Anote of caution is in order at this point. Over the past 15 years, experience has shown that PM training should be of sufficient depth and breadth and it has been sub-optimally effective if it is not followed up with coaching or some other form of active support. Finally, in an industry where failure of a massive, multi-year, high profile project, --like the EHR (Electronic Health Records) Computerized medical records that bring patient care into the digital age and save time, money and lives. The push to adopt comprehensive electronic documentation between doctors' offices and hospital settings intensified after the RAND initiative-- is not an option, agile or extreme PM principles and practices can apply. Extreme project management approaches should work in a complimentary fashion with more traditional PM approaches (DeCarlo, 2004).
Summary and Conclusion
Americans will soon be spending up to 20% of GDP on healthcare, and we're not getting the healthcare quality and safety we deserve even with all the cost. Information technology, specifically in the form of electronic health records, has been identified as having major potential to reverse these disturbing trends. Contrary to widely held beliefs in the healthcare industry that the industry is lagging Lagging
Strategy used by a firm to stall payments, normally in response to exchange rate projections. in PM, initial evidence suggests that healthcare IT project management is as active and effective in healthcare as in other industries. Two groups in healthcare, IT personnel and clinical informaticians, have at least basic knowledge of, and sometimes very significant experience with, project management. These groups, particularly clinical informaticians, can help doctors, nurses and other clinicians use the principles and practices of PM to transform their clinical practices. Thus project management can help in achieving the 10-year goal of widely adopted, effective electronic health records. Amore widely penetrated Project Management Office (PMO), or a similar approach, in healthcare, true healthcare executive support of PM, enhanced PM training on multiple levels in the healthcare industry, and agile or extreme PM practices when extreme challenges confront the electronic health record mega-project are all recommended to achieve the goal of transforming healthcare through healthcare information technology.
California Healthcare Foundation (2005). Snapshot (1) A saved copy of memory including the contents of all memory bytes, hardware registers and status indicators. It is periodically taken in order to restore the system in the event of failure.
(2) A saved copy of a file before it is updated. Health Care Costs 101 2005. Retrieved 11/14/05 from: http://www.chcf.org/documents/insurance/HCCosts10105.pdf
DeCarlo, D. (2004). eXtreme Project Management: Using Leadership, Principles, and Tools to Deliver Value in the Face of Volatility. New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of : Jossey-Bass.
Kohn, L.T., Corrigan, J.M., and Donaldson, M.S. (2000). To Err is Human "To Err is Human: Building a Safer Health System" is a groundbreaking report issued in 2000 by the U.S. Institute of Medicine which resulted in an increased awareness of U.S. medical errors. The push for patient safety that followed its release currently continues. : Building a Safer Health System. Washington, D.C.: National Academy Press. McGee, M.K. (2005). Help For Health Care. Information Week: Jan. 31, 2005.
Standish Group International, Inc. (2001). Extreme Chaos. Retrieved 11/14/05 from: http://www.standishgroup.com/ sample_research/PDFpages/extreme_chaos.pdf
By Brian Gugerty, MS, DNS (Domain Name System) A system for converting host names and domain names into IP addresses on the Internet or on local networks that use the TCP/IP protocol. For example, when a Web site address is given to the DNS either by typing a URL in a browser or behind the , RN