Monday, January 09, 2017

Heath IT Mismanagement: MD Anderson to cut about 1,000 jobs due to "financial downfall officials largely attributed to its EPIC EHR implementation project"

At numerous posts on this blog I link to stories of health IT expense putting hospital financial stability at risk, e.g.:

"What is more important in healthcare, computers, or nurses and other human beings? Southcoast Health cutting dozens of jobs on heels of expensive IT upgrade" at

"Lahey Health: hospital jobs lost, but computer vendors prosper" at,

"Monetary losses and layoffs from EHR expenses and EHR mismanagement" (,

"Financial woes at Maine Medical Center: Reading this blog might have saved them millions of dollars, and prevented massive 'cost saving initiatives'" (,

and "In Fixing Those 9,553 EHR "Issues", Southern Arizona’s Largest Health Network is $28.5 Million In The Red" (

Here's another recent example:

MD Anderson to cut about 1,000 jobs 
Becker's Hospital Review 
Ayla Ellison
Jan. 5, 2017

The University of Texas MD Anderson Cancer Center in Houston plans to eliminate about 1,000 jobs, or 5 percent of its 20,000-person workforce, as it tries to improve its financial health.

At a press conference Thursday, MD Anderson officials said between 800 and 900 workers will be laid off, and an additional 100 to 200 jobs will be cut through retirement and attrition, according to the Houston Business Journal. The job cuts will not affect any physicians.

"We primarily focused on those areas where we could make staff reductions, re-engineer administrative support, and not impact quality of patient care," officials said at the press conference, according to the report.

The job cuts are expected to save MD Anderson about $120 million a year.

MD Anderson is scaling back its workforce after it reported a combined $102 million operating loss in September and October and a $9 million operating loss in November. At the press conference Thursday, MD Anderson CFO Dan Fontaine said the organization likely does not have a positive operating margin for December, according to the report.

MD Anderson's financial troubles began in early 2016 when it rolled out a new Epic EHR system. The organization recorded a 76.9 percent drop in adjusted income for the 10 months that ended June 30, 2016, a downfall officials largely attributed to its EHR implementation project.

It appears MD Anderson failed to estimate health IT costs and impacts properly, and/or failed to write safeguards for seller-caused cost overruns into its contracts. 

That is known as "mismanagement" by definition.  

It's not as if information important to such planning was unavailable.  In fact some of it is free at this very blog, e.g., the 30 or so posts under the query link

Despite its sagging financials, MD Anderson officials said Thursday the organization's long-term financial health remains strong.

"We are innovating to develop novel care delivery models, adopting enabling technologies and diversifying revenue streams," said MD Anderson in an emailed statement. "MD Anderson will be here for patients and their families today, tomorrow and long into the future."

Not if those efforts are mismanaged as badly as this one.

Finally, perhaps the cost of commercial EHR software needs to be critically investigated. 

That it could put an organization of the stature of an MD Anderson in jeopardy seems to me to be a red flag, mismanagement or not.

-- SS

Note:  I have not posted in awhile due to being occupied with EHR forensic and evidentiary issues.  


Live IT or live with IT said...

You could be accused of cherry picking these bad stories! Except I don't think that anyone published a success story!

On a serious note, these stories seem to be getting more and more direct at blaming an EHR implementation for financial trouble and layoffs.

I'm starting to wonder if they will ask for more government handouts next or if EHR systems are an easy target when some of the problems are due to other causes.

Anonymous said...

I work in healthcare and any time the EHR is not updating or communicating with other programs, it is the lowest level staff that have to manually fix/input/make up for shortcomings--staff that had been cut already because of all those savings from EHR doing scut work. Vendors are taking advantage of the carrots and sticks implemented by the government and are not delivering what promised, yet their compensation never seems to be affected. We dread "updates" to our system. EHR is definitely NOT improving patient care that I can see.

Anonymous said...

A few years ago SAP was accused by Hershey, Whirlpool and other businesses of screwing up software implementations which almost caused them into bankruptacy.

JT said...

EPIC indeed. EPIC nuisance, EPIC control, EPIC graft, EPIC monopoly, EPIC burden on our health system. It's healthcare's F35 project

cvpacs said...

The real question here is what is the trend for total healthcare IT costs relative to operating revenue.
Additionally, are there any standardized metrics in place to measure the effectiveness of EMR technology?

THE BULL said...

It's Epic not EPIC.