Supporting Modernization of Healthcare Infrastructure: Canada s Health Informatics Executives Forum (CHIEF) Perspective on Value-on-Investment and
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1 Supporting Modernization of Healthcare Infrastructure: Canada s Health Informatics Executives Forum (CHIEF) Perspective on Value-on-Investment and Funding Models
2 PANELISTS: Mary Sanagan Senior Manager, National Health Practice Deloitte Leon Salvail President and CEO Gevity Consulting Fraser Edward Independent Consultant 2
3 Polling Question #1 Please identify your sector 1. Hospital 2. Primary Care 3. Community / Home care 4. Private Sector ie: vendor/consultant 3
4 Please identify role Polling Question #2 1. CIO, CEO, CMIO, CTO 2. Clinical Informatics Specialist 3. ehealth Program Director, Business Analyst 4. Project Manager 5. Change Management 6. Standards/Privacy 7. Enterprise Architect 8. Other 4
5 How to Identify and Capture the Dollars Needed to Support ROI?
6 ROI Working Group CHIEF Lead: Lydia Lee, SVP and CIO, University Health Network EP Lead: Emily Latourell, Process Improvement Consultant, London Health Sciences Centre Working Group Members: Dr. Glen Geiger, CMIO, The Ottawa Hospital Trevor Hodge, EVP, Canada Health Infoway Glen Kearns, Integrated VP Diagnostic Services and CIO, London Health Sciences Centre/St. Joseph's Health Care London Marc LeBlanc, Executive Director, HITS Nova Scotia Michelle Leafloor, Director, HIS and Solution Delivery Information Services, The Ottawa Hospital Hitesh Seth, Sector VP, Consulting Services CGI Diane Salois-Swallow, CIO, MacKenzie Health Mary Sanagan, Senior Manager, Deloitte Inc. Shafique Shamji, EVP and CIO, The Ottawa Hospital 6
7 Executive Summary An organization s ability to achieve positive ROI for HIS renewal depends on where it is starting from Two categories of benefits: ROI and VOI; For hospitals, CPWC must remain balanced (i.e. ROI + VOI >=TCO) HIS renewal is comprised of both IT and transformation to achieve the benefits that hospitals need HIS renewal requires as much capital as other major infrastructure projects (i.e. buildings, medical equipment) yet is not considered a cost of doing business in the same way Current lack of TCO and IT costing standards inhibit benchmarking industry needs more than EMRAM and CPWC 7
8 TCO Framework Comprehensive TCO framework explained Key Cost Drivers in the TCO Transformation in or out Total vs. incremental costs External vs. internal rates for HR The killers - Financing costs and depreciation Unintended consequences - Revenue recovery and productivity impact Contingency - expect the unexpected 8
9 Two-Pronged Benefits Realization Approach Business ROI (traditionally the hard ROI): Value is realized through automation and reductions in work related to manual, paper-based, poorly optimized processes Clinical VOI (traditionally soft ROI): Standardized, closed loop workflows improve communication and coordination, close gaps, and operationalize best practices Ongoing improvement is driven by detailed, real-time performance data at the level of the frontline staff Business analytics, predictive modeling and evidence-based management drive better corporate indicators and improve CPWC 9
10 Case Studies MacKenzie Health Case for Change: New hospital build; Current HIS will be end-of-life 2017 EMRAM 3.28 to 7 TCO in progress London/Thames Valley Hospitals Project HUGO focused on Medication Safety (CPOE/MAR) 30%-40% reduction in MAEs at academic centres and regional hospitals, respectively University Health Network EMRAM 4.83 to 7 TCO $600M over 20 years Project stopped lack of demonstrable ROI Sentara Health (Virginia, USA) TCO $237M over 10 years $38.7M benefits/yr expected, $53.7M achieved 18 value streams tied to VP accountability to drive benefits realization 10
11 Canada Health Infoway Study Application of Sentara model to Canada Canada Health Infoway study demonstrated that similar returns on investments can be equated to technology-enabled process improvement in Canada Benefits Data* Per Bed (annual) % (rounded) Patient Safety/Cost Avoidance $10,456 37% Clinical Efficiency/ Improved Capacity $11,095 39% Administrative Savings/ Cost Reductions $7,089 25% Total $28, % 86% of the ROI for the HIS can be directly linked to technology enabled process and practice transformation 11
12 Tactics to Achieving Benefits Phases to consider: Pre go-live, Post go-live Ongoing achievement and sustainment Key elements Measure, measure, measure Alignment of benefits to process changes, system design and implementation strategy What else should be stopped? Creative HR strategies Leadership and clinical accountability 12
13 Recommendations 1. Industry to support common approach for TCOs and benefits realization for large IT investment and HIS renewal projects 2. Consider both business ROI and clinical VOI for a complete benefits realization 3. Need for improved financial and other standards to benchmark (beyond EMRAM, CPWC) 4. Need more case studies to better understand experience with TCOs, funding approaches, benefits realization and successful tactics to achieve benefits 5. Providers should create a Capital Investment Framework to spark government funding policy reform to appropriately support IT as a major transformation underpinning of the health system 13
14 Polling Question #3 Does the audience agree there is a return on investment following the implementation of a Hospital Information System and associated process transformation 1) Yes 2) No 3) It depends 14
15 Polling Question #4 What is the biggest barrier to moving forward with implementing advanced clinical functionality and technology enabled process transformation at your organization? 1) Cost/Lack of Available Funds 2) No leadership buy in 3) No regional support 4) No available resources with applicable skill sets 5) No clinical support 6) Other 15
16 THANK YOU! 16
17 Public-Private-Partnerships Putting P3 Funding Models to Work for Health IT 17
18 Objectives Exploring potential options for the bundling of assets and services to support the use of Public-Private-Partnership (P3) models for largescale health IT initiatives Webinar Agenda: Briefly review P3 definition and key features Identify the need for exploring alternate funding models for large-scale projects Present a conceptual model to support the identification of potential bundles of assets and services Review key findings and recommendations 18
19 Defining Public Private Partnerships A Public Private Partnership (P3) is a cooperative venture between the public and private sectors, built on the expertise of each partner, that best meets clearly defined public needs through the appropriate allocation of resources, risks and rewards Source: Canadian Council for Public Private Partnerships 19
20 VFM Key Features of P3 Demonstrates Value for Money (VFM) and greater benefits to the public over a conventional public procurement Risk Transfer Transfer of selected risks to the private partner Financing Private financing Project specific debt and equity Public sector contributions at key milestones Contract Disciplined procurement process Output-based contracts Performance-based payment Length & Cost Multi-year, multi-phase 20
21 1 Legacy HIS lack key functionality and integration requirements Burning Platform 2 Limited funding available to support replacement or upgrades 3 Shortage of health IT labour 4 Aging hospital infrastructure and skills 21
22 Conceptual Model for P3 in Health (IT) Domain Components Professional Services Governance & Strategy Project Management Change Management Workflow (Re)design & Clinical Transformation Performance Management/ Analytics Human Resources Help Desk Application Support Maintenance & Operations Training Software Clinical Integration Engine(s) Non-clinical Hardware End user devices Servers Biomedical equipment ICT Infrastructure Network & Tele-communications Data Management & Storage Building Automation Physical Infrastructure Floor plans Building Materials and Structures Construction Contract Model Finance Only Design-Build- Finance Design-Build- Finance- Implement DBFIM DBFIMO Build-Own- Operate 22
23 P3 Health (IT) Case Studies 4 Royal Edinburgh Hospital, UK HIS as part of New Hospital Build 7 Mackenzie Health New Hospital Build Alberta Health Services BPO/Payroll Community Cloud Royal Adelaide Hospital, Australia New Hospital Build Ministry of Health, Belarus Telemedicine Network Ministry of Health, Turkey PPP Program Ningbo Municipal Health, China Cloud Hospital Case studies were used to demonstrate the various ways P3 arrangements have been used in Health IT o Highlight different bundles of assets and services using the Conceptual P3 Model o Provide key observations and lessons learned that can be applied to future P3 projects Full description of each of the case studies can be found in the Final Report 23
24 Background P3 Case Study: Royal Adelaide Hospital 800 bed hospital under construction Largest and most technologically advanced hospital in Australia Robust ICT system Full integration with primary & secondary health providers Highlights New Hospital Build Largest P3 project to date Includes delivery of ICT system and provision of ICT services Private Consortium: o o SA Health: o o Financing, design, construction of the hospital & ICT environment Operation of the non-clinical services for approximately 35 years Operation of all clinical services Operation of ICT network - shared with the private partner in order to support nonclinical systems 24
25 P3 Case Study: Royal Adelaide Hospital New Hospital Build Domain Components Professional Services Governance & Strategy Project Management Change Management Workflow (Re)design & Clinical Transformation Performance Management/ Analytics Human Resources Help Desk Application Support Maintenance & Operations Training Software Clinical Integration Engine(s) Non-clinical Hardware End user devices Servers Biomedical equipment ICT Infrastructure Network & Tele-communications Data Management & Storage Building Automation Physical Infrastructure Floor plans Building Materials and Structures Construction Contract Model Finance Only Design-Build- Finance Design-Build- Finance- Implement DBFIM DBFIMO Build-Own- Operate Responsibility: Public Private Not Applicable/ Not Included 25
26 P3 Case Study: Royal Adelaide Hospital New Hospital Build Domain Components Professional Services Governance & Strategy Project Management Change Management Workflow (Re)design & Clinical Transformation Performance Management/ Analytics Human Resources Help Desk Application Support Maintenance & Operations Training Software Clinical Integration Engine(s) Non-clinical Hardware End user devices Servers Biomedical equipment ICT Infrastructure Network & Tele-communications Data Management & Storage Building Automation Physical Infrastructure Floor plans Building Materials and Structures Construction Contract Model Finance Only Design-Build- Finance Design-Build- Finance- Implement DBFIM DBFIMO Build-Own- Operate Responsibility: Public Private Not Applicable/ Not Included 26
27 P3 Case Study: Royal Adelaide Hospital New Hospital Build Domain Components Professional Services Governance & Strategy Project Management Change Management Workflow (Re)design & Clinical Transformation Performance Management/ Analytics Human Resources Help Desk Application Support Maintenance & Operations Training Software Clinical Integration Engine(s) Non-clinical Hardware End user devices Servers Biomedical equipment ICT Infrastructure Network & Tele-communications Data Management & Storage Building Automation Physical Infrastructure Floor plans Building Materials and Structures Construction Contract Model Finance Only Design-Build- Finance Design-Build- Finance- Implement DBFIM DBFIMO Build-Own- Operate Responsibility: Public Private Not Applicable/ Not Included 27
28 P3 Case Study: Royal Adelaide Hospital New Hospital Build Domain Components Professional Services Governance & Strategy Project Management Change Management Workflow (Re)design & Clinical Transformation Performance Management/ Analytics Human Resources Help Desk Application Support Maintenance & Operations Training Software Clinical Integration Engine(s) Non-clinical Hardware End user devices Servers Biomedical equipment ICT Infrastructure Network & Tele-communications Data Management & Storage Building Automation Physical Infrastructure Floor plans Building Materials and Structures Construction Contract Model Finance Only Design-Build- Finance Design-Build- Finance- Implement DBFIM DBFIMO Build-Own- Operate Responsibility: Public Private Not Applicable/ Not Included 28
29 P3 Case Study: Royal Adelaide Hospital New Hospital Build Domain Components Professional Services Governance & Strategy Project Management Change Management Workflow (Re)design & Clinical Transformation Performance Management/ Analytics Human Resources Help Desk Application Support Maintenance & Operations Training Software Clinical Integration Engine(s) Non-clinical Hardware End user devices Servers Biomedical equipment ICT Infrastructure Network & Tele-communications Data Management & Storage Building Automation Physical Infrastructure Floor plans Building Materials and Structures Construction Contract Model Finance Only Design-Build- Finance Design-Build- Finance- Implement DBFIM DBFIMO Build-Own- Operate Responsibility: Public Private Not Applicable/ Not Included 29
30 P3 Case Study: Royal Adelaide Hospital New Hospital Build Domain Components Professional Services Governance & Strategy Project Management Change Management Workflow (Re)design & Clinical Transformation Performance Management/ Analytics Human Resources Help Desk Application Support Maintenance & Operations Training Software Clinical Integration Engine(s) Non-clinical Hardware End user devices Servers Biomedical equipment ICT Infrastructure Network & Tele-communications Data Management & Storage Building Automation Physical Infrastructure Floor plans Building Materials and Structures Construction Contract Model Finance Only Design-Build- Finance Design-Build- Finance- Implement DBFIM DBFIMO Build-Own- Operate Responsibility: Public Private Not Applicable/ Not Included 30
31 1 Case Studies: Key Observations The P3 contracting and negotiation process is complex 2 3 The continual evolution of health IT makes it challenging to define long-term P3 contracts Risk transfer in P3 arrangements is atypical from standard IT contracts 4 There are limited examples of P3 arrangements for clinical health IT 5 Financing rates and transaction costs are high 31
32 1 CHIEF Recommendations: Optimal Bundle of Assets and Services Health IT can be bundled into new hospital builds. This is routinely done for medical equipment and network telecommunications infrastructure and could provide an important opportunity to build modern hospital infrastructure 2 3 Outsource non-clinical assets and services to free-up capital funds. By bundling non-clinical assets and services as part of a P3 arrangement, organizations can (theoretically) free up capital dollars to support the provision, replacement or upgrades to their HIS Leverage the cloud to coordinate care delivery and minimize healthcare silos. Looking forward, there is an opportunity to leverage cloud technologies and P3 arrangements to support more coordinated care delivery across the continuum, while also reducing the existing healthcare silos 32
33 Polling Question #5 Has your organization run or considering running a P3, and if so did or does it include health information systems? 1) Yes, and it does include an HIS 2) Yes, but it does not include an HIS 3) No 33
34 Polling Question #6 Do you agree with the recommendation that P3 should focus on administrative and back office systems rather than clinical systems to free additional capital that may be applied to future health information systems investment? 1) Yes 2) No 34
35 A New Approach to HIS Canadian Health IT: What fundamental changes need to occur to enable public-private partnerships? Fraser Edward - fraseredward@gmail.com Dave Wattling Cynthia Zhang 35
36 Working Group Membership Name Susan Anderson Fraser Edward Karim Jessa John Lee-Bartlett Linda Miller Barry Rivelis Stephen Saunders Jim Shave John Strauss Dave Wattling Cynthia Zhang Organization Alberta Health TELUS Health Hospital for Sick Children Allscripts Canada COACH Provincial Health Services Authority CGI Cerner Canada Centre for Addiction & Mental Health TELUS Health 36 36
37 Four Themes Emerged from the Interviews 1. Sustainable Funding 2. Effective Governance 3. Partnership and Trust 4. Better Outcomes 37 37
38 Definition of Themes Sustainable Funding Access to money for new HIS implementations or system enhancements. Effective Governance Opportunity to share risks, control adoption, and ensure fair and transparent processes are followed
39 Definition of Themes Partnership and Trust Relationships with openness, integrity and confidence that the best interests are considered. Better Outcomes Improved population health, delivery of care and quality metrics for patients
40 Introducing the Concept of P4 Public-Public-Private Partnership: A cooperative venture between public (government and hospitals as separate entities) and private sectors. Built on the expertise of each partner that best meets clearly defined public needs through the appropriate allocation of resources, risks and rewards
41 The Perspectives of Each Stakeholder Theme Government Hospitals Private Sustainable Funding Costs less to borrow money from Treasury Board Limited access to funding due to fiscal constraints Have access to capital but require a return on investment Effective Governance Requirement for standardization, fair processes & risk sharing Own clinical adoption and best practices Workflows not as different amongst hospitals as perceived Partnership and Trust Challenge to fully trust private sector and share control Vendor-client relationship perspective Need to focus on outcomes - what rather than how Better Outcomes Integration across the continuum of care (primary-acute-community) Reduce errors and duplication within organization Innovation and expertise in benefits realization (US-ACO, UK, etc.) 41 41
42 The Perspectives of Each Stakeholder Theme Government Hospitals Private Sustainable Funding Costs less to borrow money from Treasury Board Limited access to funding due to fiscal constraints Have access to capital but require a return on investment Effective Governance Requirement for standardization, fair processes & risk sharing Own clinical adoption and best practices Workflows not as different amongst hospitals as perceived Partnership and Trust Challenge to fully trust private sector and share control Vendor-client relationship perspective Need to focus on outcomes - what rather than how Better Outcomes Integration across the continuum of care (primary-acute-community) Reduce errors and duplication within organization Innovation and expertise in benefits realization (US-ACO, UK, etc.) 42 42
43 What does it Take to Enable Public-Private Partnerships Sustainable Funding P3 Considerations P3 delivers more than access to capital. Enables outcome-based (risk/reward) incentives to integrate health IT solutions at an accelerated pace. Status Quo - Consequences Opportunity cost time + risk to benefits. Reduced access to innovation, automation and improved patient outcomes. Effective Governance Standardization of clinical workflows, and leverage evidence based approach across the country. Continue to work in silos with inefficiencies. A System incapable of continuous improvement and personalized medicine. Partnership and Trust Acknowledge core competencies and additional value from each stakeholder. Trust the repeatable experience of others. Lost value/opportunity, additional costs and reinvent the wheel each time. Better Outcomes Think beyond hospital walls. Delivering System level benefits will attract further investment and collaboration. Continues delivering excellence within hospitals, but overall sustainability and outcome divided across the continuum
44 What Needs to Change at the Provincial, Hospital and Vendor level to move Health ICT forward. Procurement Adoption Innovation Accountability Focus on what, not how System level patient outcomes! Specificity on the true business and clinical requirements. Address accounting requirements to recognize HIS value over yrs. Training on how to achieve a good partnership/deal structure. Hospitals must be able to drive clinical adoption and agree to standardization leverage your CMIO/CMO/CNO. Focus on evidence, not eminence to enable continuous improvement and patient centric medicine. Focus on and enable what each stakeholder does best. Enable innovation in all aspects impacting care delivery clinical practices, care continuum, operations, back office, etc. Vendors must demonstrate the added value P3 model can deliver. A shift in focus from lowest price to total System value. Accept penalties (client + vendor) for missed deliverables/milestones. Control costs, while enabling improvements at an accelerated pace
45 Can We Agree to the Following? Changes in Procurement, Adoption, Innovation and Accountability required to move forward. Procurement Leadership To achieve sustainable funding, procurement processes need rethinking. Adoption Be Bold Effective governance is linked to workflow standardization and clinical adoption. Innovation Equals Only possible when strategic and equal partnerships are established between Public and Private sectors. Accountability Transparency A focus on better outcomes and share accountability for total system value
46 Polling Question #7 A 'new approach' is required to move HIS investment forward in Canada. What is the most important enablers of P3 in the short to medium term? Pick one: 1) Procurement - To achieve sustainable funding, procurement processes need rethinking. 2) Adoption - Effective governance is linked to workflow standardization and clinical adoption. 3) Innovation - Only possible when strategic and equal partnerships are established between Public and Private sectors. 4) Accountability - A focus on better outcomes and share accountability for total system value. 5) Other - Share your thoughts with the group! 46
47 Thank You Fraser Edward - fraseredward@gmail.com 47
48 THANK YOU! 48
49 Polling Questions Audience Interaction To Participate and Join Polling TEXT: EHEALTHACHIEVE TO
50 Polling Question #1 Please identify your sector 1. Hospital 2. Primary Care 3. Community / Home care 4. Private Sector ie: vendor/consultant 50
51 51
52 Polling Question #2 Please identify current role 1. CIO, CEO, CMIO, CTO 2. Clinical Informatics Specialist 3. ehealth Program Director, Business Analyst 4. Project Manager 5. Change Management 6. Standards/Privacy 7. Enterprise Architect 8. Other 52
53 53
54 Polling Question #3 Does the audience agree there is a return on investment following the implementation of a Hospital Information System and associated process transformation 1) Yes 2) No 3) It depends 54
55 55
56 Polling Question #4 What is the biggest barrier to moving forward with implementing advanced clinical functionality and technology enabled process transformation at your organization? 1) Cost/Lack of Available Funds 2) No leadership buy in 3) No regional support 4) No available resources with applicable skill sets 5) No clinical support 6) Other 56
57 57
58 Polling Question #5 Has your organization run or considering running a P3, and if so did or does it include health information systems? 1) Yes, and it does include an HIS 2) Yes, but it does not include an HIS 3) No 58
59 59
60 Polling Question #6 Do you agree with the recommendation that P3 should focus on administrative and back office systems rather than clinical systems to free additional capital that may be applied to future health information systems investment? 1) Yes 2) No 60
61 61
62 Polling Question #7 A 'new approach' is required to move HIS investment forward in Canada. What is the most important enablers of P3 in the short to medium term? Pick one: 1) Procurement - To achieve sustainable funding, procurement processes need rethinking. 2) Adoption - Effective governance is linked to workflow standardization and clinical adoption. 3) Innovation - Only possible when strategic and equal partnerships are established between Public and Private sectors. 4) Accountability - A focus on better outcomes and share accountability for total system value. 5) Other - Share your thoughts with the group! 62
63 63
64 64
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