When it comes to information technology, Major Hospital lives up to its name. In less than 10 years, the Shelbyville, Ind., facility with 56 staffed beds has turned itself into a technology powerhouse that most of its larger, big-city counterparts still only aspire to be. Even more unlikely: It has become a thriving IT entrepreneur.
Back in 1995, when Major Hospital lacked significant IT systems, leaders decided technology could differentiate their institution from competitors. "We weren't strong financially, so we decided IT could be a factor to improvement," says Jack Horner, Major's chief information officer and architect of its IT business development strategy. "IT let us improve quality of care, patient safety and customer service. And it's an image-enhancement tool."
Image enhancement was critical. Major, a city-county hospital in a community of just under 18,000 people, is surrounded by competitors; a large tertiary hospital is only 25 miles away in Indianapolis, and four other county hospitals are within a 20-mile radius. Patients and staff can easily seek care or employment elsewhere. "We wanted people to have confidence in our abilities," Horner says.
Now the three-time Most Wired award winner boasts electronic medical records, computerized order entry, electronic data interchange and on-line imaging. Confidence in it's IT expertise extends beyond patients and staff; other businesses have become clients, buying the hospital's Internet services, clinical imaging data software, and disaster recovery and data retrieval services.
CEO Tony Lennen decided an electronic medical record was the logical way to start the IT transformation because of its direct impact on patient care. The $3 million investment was steep for a hospital of Major's size, but the payoff has been dramatic. Major has boasted a double-digit operating margin for the past four years, a big leap from the 2 percent margin it ran in the pre-IT days of the early 1990s, and executives say the EMR deserves most of the credit.
The EMR Evolution
Getting the EMR in place required Major Hospital "to undertake a massive change," says Linda Wessic, vice president of nursing services and a key IT champion. "We were operating in a small hospital. Everything was siloed. There were no computers in clinical units."
Major implemented Meditech's Patient Care Inquiry over an eight-year period, beginning with the pharmacy module, then expanding to laboratory results, order entry, radiology, nursing, a physician office package (which supports scheduling, front office functions and clinical documentation), physician dictation, and, most recently, scanned images. The system also supports an online connection between the EMR and blood glucose monitors.
Today, Major has more than 500 IT devices. Physicians can view patients' clinical results, while nurses can access patients' medical histories, notes and drug interaction alerts. Home health aides use handheld devices to provide care planning and retrieve patient medical records.
The hospital relied heavily on nurses to lead the change, because, Wessic says, they are generally more predisposed to use technology and can open the way for physicians.
That strategy is working when it comes to computerizing pharmaceutical orders. Currently, nurses are primarily responsible for entering drug orders electronically; only 25 percent of doctors do so. But a CPOE module with alert capabilities and decision support should dramatically increase the number of physician users when it goes live in January. "Our target is 70 percent of orders to be entered by physicians," Horner says.
Training and education receive a lion's share of Major's IT budget--the hospital spends 15 percent of its total IT equipment budget to educate users on the technology. For the initial EMR implementation, clinical staff received between five and 24 hours of training over the course of 45 days, with another 16 hours of training once the system went live in individual departments.
This intense EMR training gives employees a better sense of operations throughout the hospital. "The most important thing [users] learn is how critical their work is to other departments," Horner says.
Getting doctors to buy in required a more targeted approach. IT-savvy clinicians helped design systems that appealed to clinical users, without worrying about return on investment. Major's newest module, online imaging, is a classic example. Designed by Open Med Technologies, Woburn, Mass., in partnership with the hospital, the scanned imaging module incorporates both paper documents and clinical modalities, including CT scans and MRIs, and allows clinicians to retrieve images from remote locations. Physicians lobbied heavily for the capability and users across the board are pleased with the results, says Horner. Meanwhile, hospital executives are thrilled because the module, which cost $700,000, has already saved $130,000, or 75 percent, in the cost of film alone. Today, Major's IS department oversees 28 different IT systems that were built by clinical teams. "The key was to migrate from financial concerns and bring in clinicians who saw IT as a tool," Lennen says. "Clinicians have to be the main focus, not financial people."
The EMR also gave Major a marketplace advantage, Wessic says. For example, the hospital has expanded its women and children's services market share 38 percent over the last 7 years. "We outpace the majority of our competitors. The centralization of patient forms definitely gave us marketing and operational benefits," she says.
Build Off The Basics
The long process of building the electronic medical record was possible because the hospital had in place what it calls cornerstone technologies--supply chain and financial systems. "From an operations standpoint, the focus has been consistently on fundamentals, on charge captures, utilization patterns and outcomes data," Horner says.
The hospital made online data exchange a focus in the early 1990s, mainly because it was losing a lot of margin, Horner says. EDI was a winning solution, thanks in part to minimal initial investment on the part of the hospital. Vendors provided proprietary software, and as a member of for-profit cooperative VHA, Major takes advantage of group purchasing discounts. That means the bulk of its EDI investment was limited to labor and setup costs.
EDI has impacted the hospital's bottom line, especially in materials management where the top 50 items account for 60 percent of the hospital's costs. Major uses the technology to track compliance with formularies and contract conditions, which in turn allows them to negotiate better deals with suppliers. But tracking savings via EDI is not Horner's priority. "We use it for future improvement. I'm not much for tracking back savings," he says. "We spend more time looking forward and applying it to problem solving."
Workforce, It And Profits
IT also helped Major solve one of health care's perennial problems--workforce. "We're a small hospital, but we've recruited 23 physicians since 1991," Lennen says. "We may never be able to prove causality, but [IT has] had a definite effect. It's clearly helped us recruit physicians and nurses."
Major Hospital executives were surprised how readily nurses adapted to information technology. "Documentation for patient care takes so much time," Wessic says. "We believed IT could make it meaningful and simple, but since we have nurses who'd been here 20 or 30 years, we worried, 'Am I going to lose people?' It just simply didn't happen. People embraced it."
Security Entrepreneurs
As IT grew throughout the organization, Major's leaders began to worry about data security and bandwidth. "Our IT security strategy came before HIPAA," says Carol Huesman, director of information systems. "We had a [publicity] campaign in the community. We were very up-front, saying computers can be safe; safer than paper records."
Major installed a number of sophisticated technologies to support that claim. Its firewall comprises Firebox hardware and LiveSecurity software from Watchguard Technologies and the hospital uses double passwords to maintain the integrity of its system. In addition, two different groups perform regular audits, the IS department every week and the compliance department on a random basis. For further protection, early in 1998, the hospital installed secure socket layer encryption technology directly over its network as well as on its virtual private network, requiring digital certificates and digital signatures when sending data.
Business Ventures
In 1999, Major merged three local ISPs into a single new company, LightBound. The hospital partnered with local telecom and energy companies to buy the ISPs. LightBound provides Internet service to 7,000 residential and business customers in central Indiana. Major's position as a health care provider--and user of the service--is a unique selling point for customers, Horner says.
LightBound's success encouraged Major to undertake other entrepreneurial ventures: clinical data imaging and disaster recovery.
Major's desire to build an online imaging module for its EMR led the hospital to form a partnership with Open Med Technologies, which sells enterprisewide radiology/cardiology PACS systems. In September 1999, it leveraged that experience to create a six-person consulting company that sells and provides support for Open Med products in the Midwest.
Similarly, the hospital's need for a disaster recovery system led to its newest venture, Intelliplex, launched in January. Major created a mirror-image off-site data storage system to safeguard data in case of emergency. Horner and his team decided the system, which also provides backup for telecommunications, could be sold to other businesses, including hospitals. "In a lot of communities, hospitals have the largest need for data recovery," he says. "And in a disaster, people tend to forget about the telephones. We leveraged our need for these services into a separate business that offers redundant Internet and telephone service." Major is negotiating with two hospitals interested in using the backup service.
Solid Strategy
Major's unusual business strategy is possible because of the support of senior leadership and the hospital's board, Horner says. "We've had a successful track record with IT, so that helps. But Tony [Lennen] has been very supportive and we're lucky to have a board that's very entrepreneurial."
A critical component to success is that all three entrepreneurial ventures are direct outgrowths of Major's core business. "You may at first be shocked that a hospital would be doing this," Horner says, "but if you look back and analyze--privacy, security, the movement of data, and the need to continue business during a disaster, hospitals have the greatest need of that."
Although they won't reveal exact figures, Major's leaders say the ventures have created a thriving revenue stream. And the benefits extend beyond Major's walls. "How do you measure the positive effect it has had overall on our hospital?" Lennen asks. "We contribute to diversification in the marketplace. We strengthen the local economy and create new jobs. IT increased our market share and it's enabled our growth in earnings."
In short, the impact of IT on this small hospital and its community has been major.
Vital Statistics
Major Hospital, Shelbyville, IND.
CEO: Tony Lennen
CIO: Jack Horner
Total Number of Admissions: 3,100 a year
Outpatient Visits Per Year: 96,500 a year
Number of Staffed Beds: 56
Total Number of Employees: 432 FTEs
Number of IT/IS Staff: 8
Total Capital Budget: Average $4 million
IT as a Percent of Total Capital Budget: 8%
Percent Of Physicians Who Use A Physician's
Portal For Dictation (Weighted Average)
| Major Hospital | 81-100% |
| 2003 Most Wired | 21-40% |
| 2003 Least Wired | 0% |
Percent Of Physicians Who Use A Physician's
Portal
For Accessing Medical Images (Weighted Average)
| Major Hospital | 81-100% |
| 2003 Most Wired | 41-60% |
| 2003 Least Wired | 1-20% |
Source: H&HN 2003 Most Wired Survey and Benchmarking Study
Percentage Of Total Dollar Volume Purchased
Through An Online Exchange (Weighted Average)
| Major Hospital | 41-60% |
| 2003 Most Wired | 21-40% |
| 2003 Least Wired | 1-20% |
Source: H&HN 2003 Most Wired Survey and Benchmarking Study
This article first appeared in the Fall issue of HHN's Most Wired Magazine.
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