Monday, January 18, 2010

Electronic Medical Records and Going For Broke: Jackson Health System's Financial Future Appears Grim

I have written on numerous occasions that health IT in its present form, often poorly designed and implemented under current IT leadership structures, is often a waste of precious healthcare resources. The resources might be better spent on essentials such as patient care for the poor or improved human staffing, until this experimental technology is perfected.

As at my site on health IT difficulties and mismanagement I observed:

Healthcare information technology (HIT) holds great promise towards improving healthcare quality, safety and costs. As we enter the second decade of the 21st century, however, this potential has been largely unrealized. A significant factor impeding HIT achievement has been mismanagement of the technology. Mismanagement of HIT is largely due to false assumptions and naïveté concerning the challenges presented by this still-experimental technology, and underestimations of the expertise essential to achieve the potential benefits of HIT. This results in mission-hostile HIT design, and HIT leaders and stakeholders operating outside (often far outside) the boundaries of their professional competencies. Until these issues are acknowledged and corrected, HIT efforts will waste precious healthcare resources, will not achieve claimed benefits for many years to come, and may actually cause harm. Numerous reports in the 2009 articles link corroborate this view, including those from the U.S. Joint Commission and National Research Council.

The following may bring my observations to life.

This from 2007:

RedOrbit.com/News
Jackson Memorial Hospital Uses State-of-the-Art Technology to Drive Improved Patient Outcomes for South Florida Families

Posted on: Thursday, 6 September 2007, 09:11 EDT

Jackson Memorial Hospital (JMH), part of Jackson Memorial Health System, South Florida's leading/largest healthcare provider, recently implemented 11 Cerner Millennium® solutions.

[Including EMR, nursing, pharmacy, radiology, HIM, Eligibility Management, Master Person Index, Registration Management, Scheduling Management, Emergency Department, etc. - ed.]

This marks the hospital's first step in a multi-stage healthcare information technology implementation. With Cerner Millennium® solutions, JMH clinicians now have access to real-time resources to better manage patient care with improved access to cross-department information, evidence-based clinical decision support and streamlined hospitals operations.

"Cerner is pleased to partner with Jackson Memorial Hospital, an institution continually ranked as one of the best hospitals in America," said Trace Devanny, Cerner -- president. "JMH's decision to implement a solution-oriented information technology system reinforces its vision to improve healthcare communitywide. Cerner worked together with JMH to implement multiple Cerner Millennium solutions specifically designed for various roles, venues and conditions that will ultimately improve the patient experience."


These implementations, a mere "first step" towards "streamlining operations," and their maintenance, modification, remediation, and staffing were undoubtedly multimillion-dollar expenses and are likely still ongoing. (See other examples of mass hospital IT expenditures here and here.)

Now, fast forward to 2010. This is stunning:

Jackson Health System's financial future appears grim

Miami Herald
BY JOHN DORSCHNER
Posted on Wednesday, 01.13.10

Looking forward and back, Jackson Health System's grim financial picture just keeps getting worse.

Members of the Public Health Trust, the system's governing board, are being told:

Patient volume has dropped by 6.5 percent recently, meaning that with all the cost cutting and new revenue plans, Jackson is facing an $88 million loss this fiscal year, and this estimate is likely to get worse.

The government system may have lost much more money last year than the $56 million it reported in unaudited statements. That loss could conceivably go as high as $150 million.

Cash on hand to pay bills -- the measure of how the three-hospital system is doing at this moment -- continues to be awful. ``Perhaps a cash hemorrhage,'' PHT member Marcos Lapciuc called it.

The bad news came at PHT committee hearings late Tuesday afternoon. ``Very drastic measures need to happen'' to stem the growing losses, said Chief Executive Eneida Roldan. She said the losses were likely to increase, because considerable funding for poor patients comes from Tallahassee, and the Legislature is expected to cut back on healthcare funding programs as it deals with its own budget crisis.

``We're making very drastic decisions that no hospital wants to do,'' Roldan told the board, including ending contracts for 175 unfunded patients to receive dialysis at out-patient centers.

Ending contracts for unfunded patients to receive dialysis after spending tens of millions of dollars on IT to "streamline operations?" Could this be an example of "Blood for Computers?"

Board members were upset in particular about how the institution, with 12,000 employees and $1.9 billion in revenue, could be so uncertain about its financial performance last year.

The central issue appears to be the proper amount of accounts receivable -- money that the system expects to collect from insurers -- as contrasted with bad debts that are unlikely to be collected. As of Nov. 30, Jackson was listing its accounts receivable at $431.8 million.

``It just doesn't tie in,'' said board member Martin Zilber. ``We talk about $400 million or $500 million like it's buying lunch.''

Ernst & Young, Jackson's auditors, are expected to present the official audited returns within the next month. ``We know there's going to be a sizable adjustment,'' Chief Financial Officer Frank Barrett told the board. But he's uncertain how much.

Uncertain how much money will be "adjusted" in accounts receivable? Apparently all this computerization has not realized a ROI on basic financial management.

Could problems with the IT (e.g., mismanaged design, mission hostile user experience, bugs, etc.) and/or mismanagement of its implementation actually be responsible for the chaos, I ask?

... Perplexed board members heard several explanations. One is that the system has switched computer systems, and the old financial software may have been calculating bills as accounts receivable from years ago, when those items should be listed as uncollectable bad debts.

If that was the case (and I note the "may have", implying the organization is not even certain of this explanation), why was this discrepancy not noted before or during the transition? Who, exactly, was managing this project? This would be a stunning example of IT mismanagement making what happened at Yale some years ago look like a cakewalk, and on par with the mismanagement at another Miami hospital, Mt. Sinai, as I posted here.

... On Monday, the board was shown a presentation on bill collecting with a complex grid of flow charts and time lines. Still, some board members expressed concern about why Jackson's financial people didn't have a better handle on key measures of the system's condition.

A question arises regarding whether the massive IT implementations are causing data irregularities, confusion, or are not functioning properly in other ways affecting financial management.

``I don't totally understand the reasons,'' said [board member] Ernsto de la Fé.

...
The fiscal 2009-2010 budget had calculated a loss of $6.5 million. Of that, $107 million was the baseline loss, reduced by $59.8 million in new revenue building ventures and $41.5 million in cost-cutting.

"Cost cutting" usually is synonymous with "layoffs." How many millions were spent on computing instead of jobs, I wonder?

Additional information on these financial difficulties are available at the Miami Herald:


While IT is not a definite cause or contributor to these problems, I sense familiar patterns. Perhaps forensics related to hospital computing, the decisions to spend so many millions on the technology, and the actual impact of the implementations might shed additional light on the reasons for this apparent financial debacle.

Perhaps the hospital system would have better spent that money on buttressing its financial stability, and hiring smart people to have kept better track of its finances.

An analysis of these issues might likely provide a cautionary tale for hospital executives planning on massive new HIT expenditures to "streamline operations."

Addendum:

This is a good time to once again call attention to this paper by a perspicacious author from Down Under:

Pessimism, Computer Failure, and Information Systems Development in the Public Sector. (Public Administration Review 67;5:917-929, Sept/Oct. 2007, Shaun Goldfinch, University of Otago, New Zealand). Cautionary article on IT that should be read by every healthcare executive documenting the widespread nature of IT difficulties and failure, the lack of attention to the issues responsible, and recommending much more critical attitudes towards IT. link to pdf

Feb. 11, 2010 Addendum:

CFO at Miami health system resigns

MIAMI – Frank Barrett, chief financial officer and executive vice president at Miami's Jackson Health System, has resigned after five years in the position. The health system's board of directors criticized Barrett strongly last week after he reported miscalculated financial losses. Barrett had revealed to the board that Jackson Health lost $203.8 million in fiscal 2009, although he had originally reported a $46.8 million loss. The projected loss for fiscal 2010 rose $87 million to $229 million.


-- SS

10 comments:

Keith said...

I have followed your writings for some time regarding your skepticism for the current state of health IT. While there are many examples of poor planning and installation of these products, it seems there are also many good experiences as well. Northshore University Healthsystems, outside of Chicago, seems like an example of a major IT installation that has been flawlessly put in place. While not my idea of health IT nirvana, it does offer an example of some of the potential of these systems. Why not focus on some of the positive examples to highlight what is needed for a proper installation?

There are some aspects of this particular post that do not make sense to me. First, there is no clear proof that the new IT system is to blame. Could it simply be falling revenue as a result of the drop in patients that many hospitals have seen resulting from the rcession worened by an increased pool of uninsured resulting from job loss? Why put the blame on IT?

Since all dialysis patients are covered by Medicare insurance if they lack private insurance, it is not clear why the hospital would stop offering this service, unless they are just poorly managed and cannot run this profitably. We are not hearing nationally of patients not being able to obtain dialysis services due to poor reimbursement, so what gives with this situation and why would they send patients elsewhere?

I appreciate your blogging about this seemingly universal acceptance of Health IT as some panacea for all that ails health care and agree with you opinions that we are rushing into unproven territory, but how about a little balance to the argument.

MedInformaticsMD said...

Keith writes:

While not my idea of health IT nirvana, it does offer an example of some of the potential of these systems. Why not focus on some of the positive examples to highlight what is needed for a proper installation?

Thanks for the interesting comments.

As I clearly state in the linked HIT difficulties site:

This website is concerned with the reasons for this apparent paradox [between the promise and reality of health IT]. It is not a website about traditional best practices and well-known or obvious “what to do’s” in clinical IT. Rather, it is a site about what has been shown best not to do. For those seeking best practices, I recommend the new textbook “Medical Informatics 20/20: Quality And Electronic Health Records Through Collaboration, Open Solutions, And Innovation by Goldstein et al., Jones & Bartlett Publishers, 1st edition. This book is an excellent resource on current best practices and “what to do” in clinical IT. (A quote in the book from this website that I consider key in understanding how clinical IT and business IT differ appears here.)

The same is true for this blog.

I'm not sure why you believe writing abut successes would help much. For instance, every HIT vendor and management consultant organization with its teeth in HIT proffers "best practices" and "success", yet, our own National Research Council wrote in 2009 that our approaches to health IT are insufficient and this may impair progress.

A recent comprehensive review of the HIT literature, in fact, concludes we need more of what I do, i.e., Greenhalgh et al. [1]. These authors noted an absence of critical thought and called for "eschewing sanitized accounts of successful projects" and instead recommended studies of clinical IT in organizations that “tell it like it is” using the de-identified critical fiction technique.

There are some aspects of this particular post that do not make sense to me. First, there is no clear proof that the new IT system is to blame.

No, but the signs are strong. A situation of a healthcare organization that spends tens of millions on IT (or more) and then can't keep track of its finances is highly suggestive of systemic problems that include bad IT implementation, bad IT, or both. I've seen both in other organizations. I've linked to actual examples. I then ask questions based on my professional experiences, including these but others as well, across several industries regarding these patterns.

Since all dialysis patients are covered by Medicare insurance if they lack private insurance, it is not clear why the hospital would stop offering this service, unless they are just poorly managed and cannot run this profitably

I think you may have answered your own question.

I appreciate your blogging about this seemingly universal acceptance of Health IT as some panacea for all that ails health care and agree with you opinions that we are rushing into unproven territory, but how about a little balance to the argument.

I will turn that around and state most emphatically that it's the HIT vendors and trade organizations who are wildly imbalanced in their presentation of HIT as it exists in 2010.

-- SS

[1] Tensions and Paradoxes in Electronic Patient Record Research: A Systematic Literature Review Using the Meta-narrative Method. Greenhalgh, Potts, Wong, Bark, Swinglehurst, University College London. Milbank Quarterly, Dec. 2009. Available at: http://eprints.ucl.ac.uk/18821/

Anonymous said...

Keith said: "Could it simply be falling revenue as a result of the drop in patients that many hospitals have seen resulting from the rcession worened by an increased pool of uninsured resulting from job loss? Why put the blame on IT?"

User unfriendly and patient endangering HIT system, especially CPOE programs, have been known to effect doctors to admit their patients to other hospitals.

Thus, the temporal link is of interest. Let us hear the financial details of the HIT they deployed, the details of the adverse patient care events it caused, and the unfettered opinion of the users, ie doctors and nurses.

MedInformaticsMD said...

Anonymous @ Jan 18 9:34 PM wrote:

"Let us hear the financial details of the HIT they deployed, the details of the adverse patient care events it caused, and the unfettered opinion of the users, ie doctors and nurses."

Unfortunately, that will probably be a long time in coming, due to the nondisclosure clauses the administration of this near-bankrupt healthcare system likely signed in their IT contracts.

I note that some would apparently rather hear what Greenhalgh termed "sanitized accounts of successful projects", a perverse request in the face of the Joint Commission, NRC and other reports, a healthcare system in the U.S. strained to the limits (as in Miami), the commonality of IT failure across all domains, and physician surveys on extant HIT such as this.

MedInformaticsMD said...

Anonymous poster "Keith" once again asked, without responding to my reply of Jan 18 @ 4:54 PM above, "to see what ingredients are important to a successful IT installation, instead of reporting on just the disasters. It would help us all to better understand what we need to look at before choosing and installing these systems."

I reiterate that the linked book mentioned by the VistA pioneers offers exactly that information.

(I should note that an example of an "unsanitized account of a *successful* project" is at this link In that case, most of the medical informatics expert's time was spent fighting the bureaucracy, sometimes Dilbert-Style, but based on first principles to assure success. My colleagues such as those whose discussions led to this key 2009 paper relate that this is not uncommon.)

Anonymous said...

Indeed, moles will post stuff just to impugn your credibility. I'm sorry that happens, but it is effective. What can be done to reduce the effectiveness of that tactic do you think?

MedInformaticsMD said...

Anonymous Jan 19 @ 2:08 PM wrote:

moles will post stuff just to impugn your credibility. I'm sorry that happens, but it is effective. What can be done to reduce the effectiveness of that tactic?

Presume you mean industry internet moles.

The method I use is very simple. It's called "the truth."

I would also challenge the statement that sophomoric 'sockpuppet' posts impugn our credibility. The comments only impugn the credibility of their writers.

-- SS

MedInformaticsMD said...

Anonymous poster "Keith" once again asked "While you make the point that IT companies are doing a great job of banging there own drum, it does not mean that we need a one sided and negative look at their failings to provide balance."

I reiterate:

A recent comprehensive review of the HIT literature, in fact, concludes we need more of what I do, i.e., Greenhalgh et al. [1]. These authors noted an absence of critical thought and called for "eschewing sanitized accounts of successful projects" and instead recommended studies of clinical IT in organizations that “tell it like it is” using the de-identified critical fiction technique.

-- SS

[1] Tensions and Paradoxes in Electronic Patient Record Research: A Systematic Literature Review Using the Meta-narrative Method. Greenhalgh, Potts, Wong, Bark, Swinglehurst, University College London. Milbank Quarterly, Dec. 2009. Available at: http://eprints.ucl.ac.uk/18821/

Roy M. Poses MD said...

Note that we have received comments on several posts over the years suggesting that we (all the bloggers on Health Care Renewal) are too "negative" (about pharmaceutical, biotechnology and device companies, managed care and insurance companies, health care information technology companies, complementary and alternative medicine, etc). They have suggested we ought to be more "balanced."

I submit that the above organizations, and other organizations whose scope, power, leadership and governance we may criticize, have plenty of ways to get "positive" messages out. These include billions of dollars collectively spent on marketing, public relations, advocacy, lobbying, etc. Also, these organizations all seem to have lots of fans (many of which, of course, they may pay) who also get "positive" messages out.

In view of the large amount of "positive" press out there for health care IT, I don't see why we need to "balance" anything we write about health care IT that could be termed "negative" by health IT enthusiasts. We do try hard to get our facts right, and to be honest and open about our facts, our reasoning, and our beliefs. But as many of the Health Care Renewal bloggers have written, a rigorous, skeptical look at how many health care organizations are run may well lead to critical, and often "negative" findings.

MedInformaticsMD said...

Roy Poses writes:

"I don't see why we need to "balance" anything we write about health care IT that could be termed "negative" by health IT enthusiasts."

To this I add:

Our mission is stated at the top of this site. It is "Addressing threats to health care's core values, especially those stemming from concentration and abuse of power."

Finally, considering that "IT failure" equals patients put at risk and precious healthcare capital and resources wasted, requests for "balance" -- allegedly coming from a physician -- are troubling.

-- SS