The CIO and IT Department: Partners in Change

The IT department’s mandate is changing in the healthcare industry, which means the CIO’s role is also shifting. These changes trace back to the transformation currently underway with delivering and paying for healthcare. In this article, I will examine the roles of IT and the CIO under a fee-for-service system and show how they will evolve as we move to outcome-based reimbursement.

Fee-For-Service

Under a fee-for-service model of healthcare payment, patients visit the doctor when they have a problem, receive diagnostic tests and treatment, and a payer receives the bill. The possible variations on this pattern are endless, but fundamentally the system is about making sure that patients, tests, treatments, and bills are tracked and routed properly, which boils down to a complex data processing problem. 

In such an environment, the IT department’s mandate is to provide reliable, high throughput data processing systems and services, such as EHRs, lab information systems, and (most importantly) billing systems. These are essentially an automation of an antiquated paper-based system, so they have high tactical value to the healthcare organization, but they are not at the core of the organization’s business.

The CIO, therefore, is focused on providing value to the organization by delivering operational efficiency.

Outcome-Based Reimbursement

Under new forms of healthcare payment, populations of patients need to be managed to optimize quality and cost. This requires analytics and care coordination systems to identify cohorts and gaps in care. It also requires a high degree of advanced interoperability so that data travels through the health system along with the patient to provide high quality coordination of care. Such activities go beyond data processing into the realm of managing information, insights, and workflows.

The IT department’s mission needs to shift toward treating information as the critical business asset that it has become, which includes engaging with experts throughout the organization to develop solutions that specifically support the new initiatives required by outcome-based reimbursement.

As the executive in charge of the healthcare organization’s information assets, the CIO’s role becomes broader and more strategic. What was once a focused, highly technical position is expanding to include complex technology, security, and even clinical issues. Because an individual executive no longer has the expertise or time to handle the full breadth of necessary activities, CIOs are beginning to add CTOs, CISOs, and CMIOs to their teams. 

According to John Halamka, M.D., healthcare CIOs will move away from their traditional roles of technical expert and strategist. Their responsibilities will change to focus on communication, governance, and coordination of work across an ecosystem of stakeholders. In fact, CIO Magazine predicts that IT departments will increasingly be run by non-CIO executives because factors like analytics and cybersecurity are becoming business issues rather than IT initiatives.

Look for the "Office of the CIO", comprised of several C-level executives, versus an individual executive to lead the IT department of the future. This division of labor enables each executive to have a narrower but deeper focus to navigate increasingly complex regulatory and business requirements.

Leading a group of executives instead of directly controlling the IT department shifts CIO priorities. Technical expertise, vendor selection and infrastructure will become less important aspects of the CIO's day-to-day work, replaced by budgeting, operations and coordination.