Tuesday, May 26, 2015

Lahey Health: hospital jobs lost, but computer vendors prosper

At numerous posts on this blog I link to stories of health IT expense putting hospital financial stability at risk, e.g., "Monetary losses and layoffs from EHR expenses and EHR mismanagement" (http://hcrenewal.blogspot.com/2013/06/monetary-losses-and-layoffs-from-ehr.html),  "Financial woes at Maine Medical Center: Reading this blog might have saved them millions of dollars, and prevented massive 'cost saving initiatives'" (http://hcrenewal.blogspot.com/2013/05/financial-woes-at-maine-medical-center.html), "In Fixing Those 9,553 EHR "Issues", Southern Arizona’s Largest Health Network is $28.5 Million In The Red" (http://hcrenewal.blogspot.com/2014/06/in-fixing-those-9553-ehr-issues.html) and others.

Here's another, with human layoffs as a result:

Boston Globe
May 20, 2015
Lahey Health to lay off 130 workers at three hospitals

Lahey Health, the Burlington-based hospital network, is laying off 130 people at three hospitals and cutting the pay of top executives as it moves to close a budget gap.

Lahey said Wednesday that it lost $21 million during the six months that ended March 31 because it spent more than anticipated on the rollout of a new software system and lost business during the harsh winter as patients canceled appointments. It also blamed what it called low reimbursements from public and private insurers that did not cover the full cost of delivering care to patients.

... The job cuts represent about 1 percent of Lahey’s workforce of about 14,000 and include managers, clinicians, and administrative staff.

They include 95 people at Lahey’s flagship hospital in Burlington, 30 at Winchester Hospital, and five at Beverly Hospital.

In health IT, "spending more than anticipated" is an activity that might be more accurately called "fixing bad software at customer expense."

Perhaps hospitals need to abandon the dream that health IT is going to save money, and consider it a serious money sink for which exceptional due diligence needs to be performed - before purchase.

At least management is taking some of the hits in this case.

-- SS

No comments: