Relationship ROI: when it comes to partnering with vendors, CIOs say having the right culture and sharing the same strategic vision are critical.
Now, St. Vincent's itself is an 800-bed, four-hospital-system within a system in Birmingham. And when in 2004, Stettheimer--who is senior vice president and CIO at St. Vincent's--presided over a meeting about optimizing the tracking and management of patients and equipment, that meeting launched a fully commercialized IS solution with co-development at its core. Now known as Horizon Enterprise Visibility, a system offered by Alpharetta, Ga.-based McKesson Corp., the solution gives clinicians and staff members the capability to optimize flow and communications around patients and equipment through real-time clinical information.
And while Horizon Enterprise Visibility has 32 live and 14 contracted customer sites, it all came out of a discussion around a specific, individual need, Stettheimer says. "That product," he explains, "actually came out of a meeting in my office back in 2004. I had contracted with another partner we have in Birmingham, ComFrame, and I asked them to go out and do a general market assessment and feasibility study on RFID development. Out of that came a brainstorming session, and out of that evolved what is now know n as HEV."
Gary York, who was the principal of ComFrame back then, became the principal of a new company, Awarix, which was co-founded and co-financed by St. Vincent's and was acquired in August 2007 by McKesson. St. Vincent's co-owned the intellectual property that Stettheimer and his colleagues co-developed with Awarix. Even today the hospital continues to receive proceeds from the commercial sales of the now-McKesson product.
Would the average standalone hospital CIO have taken on such an ambitious project? Perhaps not. But, Stettheimer says, if a hospital organization has the right kind of culture--entrepreneurial in its focus and wit h senior executives and clinician leaders willing to take intelligent risks--co-development with a vendor on a new solution could make sense.
Above all, Stettheimer says, "You have to ask the question, why would you do it? You have to have a really good reason. Before you do co-development, you're going to look around and see what exists, even in other industries. Co-development is never the first answer; usually, it's the last. And you very much have to be protective and visionary in what you get out of it, not only in terms of products, but also intellectual property, meaning, you absolutely need to make a deal involving an equity stance or revenue sharing contract with the vendor; just getting software free isn't enough."
If executives can answer all these questions positively, co-development may be right for their organization, he says.
The course that Tim Stettheimer initiated as a CIO, turning an idea into a commercialized product, is only one of a broad range of options that exist when it comes to partnering with vendors. Nationwide, hospital organizations of many different sizes and types are moving into this realm, working collaboratively with vendors to develop, produce, test, and optimize a rainbow of healthcare software products.
Some would argue that many of these partnerings do not precisely adhere to the strictest definition of "co-development," which to some experts means more-or-less equal financial and resource investment. In fact, the range of provider-vendor partnerships defies strict categorization, which is probably to be expected.
So what do these partnerings have in common? All those interviewed for this article agree that the successful partnerships share the following characteristics:
* They begin with an unmet IT need that cannot be satisfied by existing products in the marketplace.
* They involve a very well-thought-out collaborative strategy between a provider organization and a vendor, with sound due diligence prior to the signing of any contracts.
* They require, at base, an organizational culture on the provider side that is entrepreneurial in spirit and open to thoughtful risk-taking.
* What's more, they require a fit between the two cultures of the two organizations. Often this has already been established through an existing relationship. Some CIOs feel without such a relationship, the risk of failure is too high.
* Industry experts agree the area of greatest concentration is that which bridges clinical workflow and operational efficiency concerns.
To find out whether an organization has the right mix of culture, need, opportunity, and existing vendor relationships to make a development partnership work, see the sidebar below.
Nationwide, variety abounds
From East Coast to West Coast and north to south, hospital organizations are partnering with vendors to create new IT solutions, especially in the clinical sphere. Among the many examples of such collaborative partnerships are:
At Eastern Maine Healthcare Systems in Bangor, Maine, Catherine Bruno, vice president and CIO, and C. Eric Hartz, M.D., chief medical information officer, have been involved for more than three years in a partnership with the Kansas City, Mo.-based Cerner Corp. The organization's flagship 370-bed Eastern Maine Medical Center acts as one of several "lighthouse" developmental laboratories around the country for Cerner clinical IS innovations. Specifically, the site is being used to develop the blood transfusion management component of ordering within Cerner's ongoing CPOE product development. The work that Bruno, Hartz, and their colleagues are doing is in line with attempts to optimize conditions under which blood transfusions take place.
* At Santa Clara Valley Medical Center (San Jose, Calif.), the 520-bed flagship facility for the Santa Clara Valley Health and Hospital System, executives have co-developed a system for primary care physician-to-specialist referrals, which tends to be a problem area for Medicaid patients. The system, being developed in partnership with Foster City, Calif.-based Health Access Solutions, is in final testing. CIO Dennis Kotecki says the system has performed beautifully during its pilot at the hospital. "I would have to say that it is not only the culture, but also the needs and vision of the department you're trying to satisfy, that must be crystal clear in order for something like this to work." Dolly Goel, M.D., the organization's medical director, echoes Kotecki. "From a physician perspective, what I really appreciated about this vendor was that they were always willing to listen to me," Goel says. "And they could speak in a language that I could understand."
* At Virginia Commonwealth University (VCU) Health System in Richmond, Va., Alistair Erskine, M.D., the organization's chief medical information officer, has been collaborating with Newton, Mass.-based PatientKeeper. Specifically, the 779-bed hospital has been an actual beta development site for ongoing PatientKeeper innovations. Currently, Erskine reports, VCU attending physicians are working in the company's new physician documentation and note-writer, playing with the live tool in its alpha stage. "What's good about this," Erskine says, is that "usually, when vendors put data into a customer's system, they use fake data. You'll never reach the same depth as to what might really go wrong unless you're working in a real-life, super-complicated, academic medical center database like ours." The benefit to VCU is clear, Erskine say, his physicians are able to make use of leading-edge technologies in real time, and help shape the design of a tool they will eventually use.
* At the 86-bed Fauquier Health in Warrenton, Va., CIO Donna Staton led a multidisciplinary work-group in the co-development of an e-prescribing solution for her hospital's physicians, in partnership with Rockville, Md.-based DrFirst. Some of the hospital's physicians were already using the vendor's outpatient solution and Staton, who has a software development background, seized the opportunity to improve the inpatient-focused product that DrFirst was working on. The result was a Web-based application that integrates with different prescription databases like RxHub and pharmacy benefit management systems. Staton says the benefits to both parties were evident. On the vendor's side, there was the opportunity to better understand the inpatient market, and to successfully shape a product. On the hospital's side, there was the opportunity to obtain a product suited to the organization's needs. After six months of development work towards proof of concept for the software and another two months' work to refine that into a pilot, the finished solution went into final testing this fall. The capability for every patient's medication list will be updated upon ED entry. The list will populate the organization's core EMR while also automatically available online to physicians.
* At the 94-bed Dublin Methodist Hospital in Dublin, Ohio, a suburb of Columbus, Cheryl Herbert, R.N., Dublin Methodist's president, has helped fashion the one-year-old hospital's electronic landscape. To Herbert, this includes partnering with the Dublin-based Cardinal Health on the co-development of an unusual in-room tool for clinicians and patients. Dublin Methodist, a member of the eight-hospital, Columbus-based OhioHealth system, opened in January as a state-of-the-art, showcase digital hospital. The solution that was developed, InfoStation, involves a workstation that pulls down from a patient room ceiling, and allows the clinician to do his or her documentation there. It also allows the patient to use the same terminal to peruse educational information, order meals, or go online and e-mail family members. The application has replaced the use of COWs (computers on wheels), which Herbert says have not been popular among nurses in the OhioHealth system. "We wanted to bring to the bedside a solution that would work for both clinicians and patients, and that on the clinical side would provide a device that would be a gateway into all our documentation systems. Our goal was for our nurses and physicians to use this solution for documentation, review of results, and anything that would pertain to the care of this patient," she says.
UPMC's massive investment
While all these partnerships are bringing innovations to the marketplace and benefiting the patient care organizations that are cosponsoring them, one organization has taken the idea of co-development to a whole new level: University of Pittsburgh Medical Center (UPMC) Health System. The 20-hospital, 4,200-bed regional health system has partnered with several large vendors not only to co-develop individual IT solutions, but also to spin off companies in order to bring new revenue lines to the health system.
Among the companies being spun off is Omnyx LLC, a firm which was launched in June as a joint venture between UPMC and Chalfont St. Giles, United Kingdom-based GE Healthcare. According to the June announcement, the new company will provide digital solutions to a market that has "relied on glass slides and microscopes for over 125 years."
Looking at the range of joint-venture companies that UPMC is developing with vendors like GE, Senior Vice President and CIO Dan Drawbaugh agrees that the scope of such ventures is virtually unique in healthcare. What is driving his organization forward? "UPMC has a very entrepreneurial healthcare model," he says. In fact, along with patient care, teaching, and academic medical research, "commercial services exportation" is one of the main business objectives for the hospital system, according to Drawbaugh. As a result, it should come as no surprise that UPMC has invested $20 million into the launch of Omnyx, matching the funding coming from GE.
Of course, most hospital organizations are not in a position to invest tens of millions of dollars in spin-off IT firms. However, the principles around co-development are the same regardless of organizational size, says Drawbaugh, who agrees with those who say a core criterion for collaboration is an organizational culture that encourages innovation and intelligent risk.
And that culture is inspiring innovation at many levels at UPMC. A good example is the co-development of a semantic interoperability application between UPMC clinicians and a small vendor called dbMotion, based in Hod HaSharon, Israel. Working together, the UPMC clinicians and dbMotion programmers were able to dovetail the clinical vocabulary from disparate systems, making it possible to view all medication orders across ICU, med/surg, and ambulatory environments.
According to Dan Martich, M.D., UP-MC's chief medical information officer, he and his colleagues did a typical vendor search when they were initially looking for consolidated, single-screen, health system-wide viewing of patient medication orders and histories. "So it happened because of an absence in the marketplace, and us on the leading edge, wanting to do something around semantic interoperability," Martich says. "Building it yourself is very tough; we've done some self-development, but it's very difficult. Our preferred route is co-development."
Bill Fera, M.D., vice president of medical technologies and director of interoperability at UPMC, says that Drawbaugh insisted on going in with a strong clinical team. "It's one thing to put money into a pot," Fera says. "It's another thing to have the clinicians be extremely participatory. And it really has to be an iterative process," particularly when it involves complex clinical care issues.
Experts say the financial insecurity arising out of the current national and global economic crisis may well make it more difficult for some organizations to move forward on co-development. "This whole economic downturn will affect things," says Fran Turisco, principal researcher in the Waltham, Mass.-based Emerging Practices division at the Falls Church, Va.-based CSC Corp. Unemployed, uninsured patients swamping EDs could put a larger uncompensated care burden on hospitals that might otherwise move forward with collaborative projects. Still, she says, "There is a whole range of forces that leads a hospital to need or want to be innovative."
Above all, Stettheimer says there are several reasons why an organization's leaders might want to get into co-development. But if they do, he says, there is one absolute must. "They need a clear reason and expectation of what they want to achieve," he says. "It's very rare to have some kind of blue-sky reason. Usually, it's a much more targeted reason or purpose."
A Good Fit?
CIOs and industry experts agree: not every hospital organization should attempt co-development. Experts in the field say that CIOs need to ask themselves the following questions:
* What kind of culture does the organization have? Is it traditional/authority-based, territorial, and risk-averse, or is it entrepreneurial, collaborative, and risk-taking? If it's the first type, it's likely that co-development won't be successful.
* Does the organization have the ability to invest in both the financial and human resources needed to co-develop? And does it have the time and patience for this? "Whatever amount of time you think it will take to implement, you need to double that," says Dolly Goel, M.D., medical director at Santa Clara Valley (Calif.) Medical Center. "Because if you're just going to automate an existing process, you can meet your deadline; but if you include process and cultural change, it will take twice as long."
* Does the organization know its vendor partner? Most of those interviewed for this article have done co-development with vendors they know. And even if an organization has a long history with a prospective co-development partner, "One of the first things I'd want to do is to assess the stability and long-term prospects of any vendor, because the market is becoming crowded with newcomers," says Ann Farrell, principal, Farrelt Associates, a San Francisco-based consulting firm. "I'd want to see their commitment in some tangible way. I'd want to see it through a prospectus or through FTEs."
* Is the organization addressing unmet needs in the healthcare IT market?
Takeaways: Where the Innovators Are
* More hospital organizations are participating in co-development with vendors in a variety of IT areas, particularly in clinical areas where off-the-shelf product offerings are insufficient
* Experts say co-development isn't for everyone. Only hospital organizations with an entrepreneurial, collaborative culture should consider it.
* Most of those interviewed for this article already had long-standing relationships with their co-development partners. Regardless of any relationship history, most agree that extensive due diligence, especially regarding the long-term stability of the prospective vendor partner is essential.
* In order for collaboration to work, hospitals and vendors must both benefit
* The current economic downturn could impact the ability of hospitals to codevelop Nevertheless, sophisticated solutions in the clinical space will continue to encourage collaborative HIT innovation.