Too Far Ahead of the IT Curve
Too Far Ahead of the IT Curve
Over the years Peachtree had grown from a single hospital to a regional network of 11 institutions. With over 4,000 employees and a million patients Peachtree’s IT infrastructure has not kept up with their growth. The current IT system is not reliable, efficient and secure. The company mission is to provide “quality, consistency and continuity care across the entire network” delivered with “efficacy, economy and respect for patients and staff”. In addition, unlike the healthcare industry which moved to standardized care, Peachtree believes its focus should be on the selective standardization. In order to achieve its objectives, Peachtree needs to overcome its failing IT infrastructure. This could be attained by implementation of SOA based system since it best aligns with the company’s business model, mission and goals. Another recommended step is that Peachtree turns toward an incremental implementation of SOA. Peachtree should retain what still works and adds value to the company and replace only the most inefficient parts of the current system. Finally, standardizing only certain areas of clinical treatment could provide efficiency and cost savings and at the same time would allow doctors to make the final call, so the quality of care and patient safety wouldn’t be compromised.
During the last 12 years Peachtree had grown from a single teaching hospital to a regional network of 11 healthcare institutions with additional support facilities. All 11 healthcare institutions have different size, purpose, history and culture. Each hospital has its own IT system and is doing things differently. As a result, Peachtree is encountering a problem with its incompatible technology that creates many problems and inadequate performance. The consistency and continuity of care across entire network is compromised which is not consistent with Peachtree’s goals. In addition, Peachtree current system is not reliable. Reliability is crucial for the company, since the doctors and patient depend on it, and the system is very important for carrying out the company’s mission. Another related issue is that a lot of time and budget goes into maintaining the current system. The support and control of the current system is very difficult, and it’s not cost efficient.
The more Peachtree grows, the bigger that problem will become. This is not consistent with company’s goal to deliver care with the highest level of efficiency and economy. While the healthcare industry has moved towards standardization, Peachtree has resisted. One advantage of the current system is that it doesn’t enforce blanked standardization, but provides flexibility. It gives the physicians freedom to form their own judgments about which treatment to use for which patient. This ensures quality care and respect for patients and stuff which is part of Peachtree’s mission statement. Yet, many areas of clinical treatment could safely be standardized around best practises without compromising patient safety and quality of care. Moreover, in some operational areas, standard based system could create efficiency, cost savings and higher quality products.
In order to ensure that Peachtree’s IT system is aligned with company’s strategy to provide “quality, consistency, and continuity of care across the entire network” delivered with “efficacy, economy, and respect for patient and staff”, Peachtree needs to consider the following criteria when selecting its new IT system.
1. IT system runs smoothly and reliably.
2. IT system provides high level of security.
3. System is cost efficient.
4. System is user friendly.
5. System allows for selective standardization.
6. Clinical information could be completely computerized.
7. System allows for tracking of care performance and patient outcomes. 8. IT infrastructure is consolidated.
9. System is flexible and allows doctors to make the final call. 10. System allows for continues improvement.
Alternatives and Recommendations:
1. Implement Monolithic IT System.
Pros: Allows implementation of standard procedures across all hospitals.
Little risk of system failure since costs, challenges and benefits are known.
Allows doctors to work together.
Provides single set of systems and applications.
Cons: Requires more time to implement.
More expensive: $500 mill +
Redesign acquired facilities.
Limit doctors’ independence.
2. Move to SOA based system.
Pros: Allows for continues improvement.
Provide opportunities to access, adjust, redesign reprioritize along the way.
Flexible in $ ability to integrate new facilities.
Allows replacement only of certain inefficient parts of the existing system.
Provides a range of standardization choices.
Cons: Technology is untested in health care environment.
Cost is undetermined.
Benefits are uncertain.
Risk is higher.
3. Make a full scale implementation of the new IT infrastructure.
Pros: If the project is successful it could help the company to achieve its business goals.
Cons: Cost could be substantial.
Risk is high.
Project is hard to manage and control.
4. Make an incremental implementation and replace only certain parts of the old system.
Pros: Minimizes risk.
Makes project more flexible.
Makes project easy to control.
Allows the IT to shift priorities and be more efficient.
System reliability is not compromised.
Allows replacement only of the most inefficient parts of the existing system.
Cheaper than replacing the whole system.
Cons: Deciding which peace of the infrastructure should be replaced may be challenging.
5. Implement fully standardized care.
Pros: Easier to support and control.
Better integration of applications.
Cons: Could reduce the quality of care.
Physicians may resist standardization.
6. Implement selective standardized care.
Pros: Allows to standardized certain areas of clinical treatment safely around the best practises and at the same time provides the physicians with flexibility to decide on the treatment which is best suited for the patient.
Increases efficiency, provides for cost savings and higher quality products without compromising patient safety and the quality of the service.
Cons: Could increase cost.
Could make difficult infrastructure improvements and coordination.
Could lead to very complex system.
It’s recommended that Peachtree implements the SOA based system since it best aligns with the company’s business model, mission and goals. SOA based system provides a range of standardization choices, reliability, flexibility and cost efficiency. It also allows replacement of only certain inefficient parts of the existing system. It is also recommended that Peachtree turns toward an incremental implementation of SOA. Peachtree should retain what still works and adds value to the company and replace only the most inefficient parts of the current system. This would be more cost efficient approach and would provide opportunities to adjust and redesign along the way. Also, by gradually installing the SOA, Peachtree and its doctors would learn about how the systems worked and “master” it in a sense as the infrastructure moved further. Furthermore, it is recommended that a selective standardized care is implemented. In that way certain areas of clinical treatment could be standardized in order to achieve efficiency and cost savings. At the same time, doctors would be allowed to make the final call, so the quality of care and patient safety wouldn’t be compromised.
Risk Management Plan
Since the SOA technology is untested in the health care environment, its implementation might be risky, but with a proper planning the probability for success is greatly increased.
In order to ensure success with the implementation of the SOA based system, an oversight committee must be formed. The committee’s role will be to ensure that the new system aligns with the business goals and that the implementation schedule is followed. This will reduce the risk from project failures.
Since the cost for the implementation of the new system is undetermined, Peachtree should be strong enough to absorb the hit if the technology project goes overbudget. Series of small, but independent projects could be run which will reduce not only the financial risk, but the risk of business and technology change. This also will provide opportunities to adjust, redesign and reprioritize along the way. The oversight committee will also play an important role in preventing budget overruns. Yet, if the new system is total failure, Peachtree needs to be prepared to terminate the project.
In order to ensure success of the SOA based system, Peachtree must carefully consider how the new system could be best aligned with company’s current business practices. The management needs to determine what the system needs to do, which parts from the old system still add value and should be retained, which parts need to be replaced and which standardized. Again, series of small but independent projects will allow for project flexibility and adjustments along the way. Peachtree could use pre-fabricated SOA module coupled with customized modules to achieve the most basic and critical functions first. Since SOA allows for outsourcing, Peachtree could purchase a custom built service and focus on modules that best help the company to achieve its strategy. However, Peachtree is in an unique position since there is not pre-built SOA for the health care field. This may result in unexpected cost, but should allow for more customized modules making the achievement of the business goals easer.
The health care industry is not competing on price, but it’s competing on product features, quality of service, delivery time etc. Thus, the quality care is very important for the success of the company. In order to maintain a quality care, the new SOA system must excel at reliability and security. Reliability is crucial for the company since the doctors and patient depend on it. Even a short downtime could be disastrous for Peachtree. In order to ensure reliability the new system should be well planned with respect to power failures hackers and hardware failures, and based on a single transferable platform to allow for efficient data sharing. By using pre-built modules, when possible, the system could be both reliable and secure. Furthermore, if outsourcing is used additional people would need access to confidential data in order to implement the process. Peachtree needs to research the outsourcing company to ensure the confidentiality of the patients.
While the threat of new entrants, substitutes and bargaining power of the patients is low for Peachtree, the bargaining power of the doctors is high. It’s possible that the doctors resist the change. It’s very important that the capabilities of the new system allow for user friendly interfaces in order to appear to doctors. Peachtree could use inputs from the doctors and implement them in the new system to meet their needs.