Consider This...Healthcare Observations by Ralph P. Fargnoli, Jr.
4/24/09

Stalled IT projects: pay now or pay more later

There's no doubt that the buzz surrounding HIMSS in Chicago this month was focused largely on the HITECH portion of the American Recovery and Reinvestment Act of 2009 (ARRA). Namely, how CIOs need to get in gear fast to take advantage of all that's coming to them in the form of incentives to adopt electronic health record technology by late 2011.

What's interesting is that the demeanor of the CIO community earlier in the year, when the details of ARRA were unfolding, was one of excitement and encouragement because the government was finally stepping up to the plate, and generally was a feel-good atmosphere.

Now, however, the general attitude of CIOs is one of uncertainty and frustration. Uncertainty due to lack of organizational direction and strategic planning and frustration due to lack of funds. CIOs simply don't have the resources to get this done.

I find it fascinating that this is a model of funding on the back end. Healthcare organizations are expected to invest in the EHR technology by 2011, and then and only then, will they be rewarded via incentives for doing so.

What about those hospital and health networks that are feeling the pinch these days? Where does the upfront money come from for them to even make the investments? To me it's an oxymoron that the government develops this "economic stimulus" legislation, yet require the beneficiaries to spend money first to qualify.

Our clients are struggling for cash flow now, and know that access to capital is limited. Their priority is patient care and patient services, yet if they don't comply by 2015, the penalties kick in. They want to know where to get the upfront money.

The irony doesn't go unnoticed. Spend the money now that you don't have, but you will be rewarded in the end. Don't spend the money, and you will lose money. However, just as with any stalled IT project in a healthcare organization, failure to heed the economic stimulus adoption of EHR technology will not have a good outcome. It can result in lost revenue, higher costs and decreased productivity, not to mention employee frustration and loss of credibility with the intended user community.

Let's just hope healthcare organizations figure out how to get funded up front before it's too late.

Ralph P. Fargnoli, Jr.
President & CEO
Beacon Partners, Inc.

Questions or comments, contact
ConsiderThis@BeaconPartners.com

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