Healthcare CIO advocates a faster move to the cloud

Charles Podesta, CIO at UC Irvine Health, says competition for resources at healthcare organizations has stymied IT investments. But he sees that changing.

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With more than 35 years of health IT experience, UC Irvine Health CIO Chuck Podesta has witnessed the dramatic evolution of IT as well as the impact that technology has had in transforming medical operations and patient care.

That said, Podesta believes the healthcare industry still lags in certain areas, particularly in its adoption of cloud computing and its efforts to develop effective, efficient partnerships with vendors. As a frequent speaker at national conferences, Podesta offers strategies to bring health IT to its next level while at the same time developing strategies that advance the effectiveness of his own organization's technology. Here, he shares some of his insights and ideas:

You've advocated for faster cloud adoption among healthcare institutions. What's your cloud strategy?

We typically look to see if a new product has a cloud-based solution. We're moving to a new materials management system, for example, and the product we're looking at has a cloud solution, so that makes it the No. 1 contender. And we're teaming up with UC San Diego, using their Epic [electronic health records, or EHR] instance and hosting our data in their private cloud in Wisconsin, which is saving us lots of money.

Charles Podesta, UC Irvine Health UC Irvine Health

Charles Podesta, UC Irvine Health

How much of your organization is in cloud now?

When the Epic move happens — we go live in November, but we're firing up the private cloud in July – if you include that, I'd say about 80% of our applications will be either in private cloud or public cloud. We just moved all our analytics to a cloud-based solution as well. So we're really moving rapidly in that direction.

Why is the healthcare industry, which is so cutting-edge in the care it delivers, behind on cloud adoption?

Part of it has been the issue around protected health information, or PHI. Part of it has been the breaches, hacking and ransomware in the past seven or eight years. A lot of technology leaders were hesitant to move in that direction because of those reasons.

Also, a lot of the cloud solutions were good at protecting information, but they didn't have HIPAA [Health Insurance Portability and Accountability Act] compliance or something on the NIST [National Institute of Standards and Technology] standards that could pass an audit. Google and Amazon Web Services have had to move rapidly to put those in place before we in healthcare could use them.

Why has healthcare lagged in other computer-related areas, too, such as adoption of computerized records?

A lot of it is based on the investments an organization can make. There's a lot of competition within healthcare for items that require big dollars. When you look at private industry like insurance or banking, the percentage of organization spend that goes to IT is, and has been, way higher than anything happening in healthcare.

Before 2012 most of us were at about 3% of total spend. Now we're just getting to the 4% to 6% range, although some of the more advanced organizations are higher. Private industry has been in the 9% to 12% range, because they've viewed it as a competitive differentiator. In the past, we [in IT] were looked at more of a cost center and as something the business had to do to keep the business running. That's changed in the past few years, so you're seeing more investments.

Has that dynamic made you as a CIO a better salesman?

CIOs have had to become very skilled in sales, because our competition is fierce. You're going up against facilities and also medical equipment, which is needed for direct patient care. You need to be able to balance [your spending requests] against that; you don't want to sell something that takes away from other initiatives that may be more important than the IT. You have to understand your agenda and the agenda of the organization.

Now, though, it's a little easier because it's easier to show the benefits of the technologies. There are real examples out there where we can show the returns on investment that were difficult to find in the past. In the early '90s, I was doing electronic health records and computerized physician-order-entry systems, but it was very difficult to get budget approval on projects like that. You were dealing with other leaders in the organization who really didn't have a good understanding of the technology or what it could do, and there was no ROI. We had to implement it first to get the ROI. It was a leap of faith.

What's the biggest challenge you're facing now in your current role?

It's the project with UC San Diego. We're using a lot of the system they've already built. But it's a collaboration, and the shared governance aspect of it is tremendously challenging. You have to get operational leaders from both organizations to work together and say, "You do that better, so we're going to change our system," instead of saying, "You have to change to how we do it."

What was the reason for the partnership?

There are five medical systems within the University of California system. The other four were all on the same EHR – different instances but they all contracted with Epic. So I started looking at this and saying it would be crazy to have a fifth instance.

I thought we could save money and support our patients better by being on a single EHR. That would also help get us ready for things like population health because it helps with research and analytics to have a larger patient population in a single database. So we did some analysis that showed a lot of savings. Once the organization saw that, the big implementation made a lot of sense.

How do you ensure a successful collaboration?

It's relationships. When you go into an organization, it's one of the first things you have to work on: your peer relationship and your relationships top down and in IT. For this project, I had to make sure my team understood the goals and make sure the UC SD team understood, too.

We took a one-team approach to this — you keep pushing until you see the people who are territorial start to drop their guard and work together. Of course, there are politics to it, but it's making sure everyone understands where the prize is.

You've talked about the need for CIOs to have strategic partnerships with vendors. Can you talk about that?

[CIOs] have a somewhat adversarial relationship with vendors even though we need them. A lot of CIOs lose sight of that and develop a real animosity toward vendors, which I get because we're bombarded by hundreds of vendors by email and phone calls. But it simplifies the CIO's job to have a small set of partners to manage rather than a wide variety of vendors.

A partnership with a select few helps you drive your organization forward, because they become thought leaders, people you can turn to whenever you have big projects. Some CIOs ask: 'How do you know you're getting the best price?' You can test it as you go along and keep the vendors from getting too comfortable with their position. But most vendors understand the importance of the partnership. And with my partners, I can call the CEO and get some action. That's comforting to know.

What do you look for in vendors as partners?

Cost, talent — it's all of that, but it's also the thought leadership they bring. They understand my organization, the challenges we face in our market and in our organization. They understand our strategy, and they're willing to be a part of moving us forward in a lost-cost high-value way. They are also willing to put skin in the game to do that.

You get the best and brightest people when they view you as a partner instead of when they feel they're competing with 10 other firms for a project. That's a huge benefit.

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