CEO David Lawrence
The New Reality for Customer Engagement
To force technology change at Kaiser Permanente, CEO David M. Lawrence told the HMO's various medical centers he would cut off their IT budgets if they didn't go along with his $2 billion, five-year plan to go digital. Writer Eric W. Pfeiffer spoke to Lawrence about the information warfare in the healthcare industry and what it takes to reach detente without deep-sixing IT in the process.
CIO INSIGHT: What inspired you, a former physician, to become so forceful about information technology, and so early in the game?
David M. Lawrence: It's impossible to practice medicine without it. The quantity of information we are now handling is simply overwhelming, and it cannot be kept on a paper record. The more you try doing it by paper record, the more you risk errors and poor quality care. That's part one. The second part is that the rate at which knowledge is being created, such as better understanding of diseases and new drugs, is simply beyond the capacity of any human being or small group of human beings to keep up with. The only way you can manage it is with information technology. IT is the linchpin for medical care that is high quality, safe, timely, affordable and equitable.
Kaiser, with more than 11,000 doctors and 29 medical centers, is a huge, disparate and culturally diverse organization. How did you manage change?
A lot of the mobilization comes from people who are on the front line and dealing with this every day. They are the doctors who saw what technology they needed and began to look at the solution. I don't takeand shouldn't be givencredit as the person who mobilized everything. I was a cheerleader and lantern holder. My job has been to articulate the vision when people got confused or their resolve weakened, and I helped knock down barriers when they started cropping up. What we've learned in major IT projects is that if the leaders of the organization are not involved, it dies. It just won't happen. This is not a technical problem. This is a social and cultural problem. And any major change effort has to be led by strong leaders who are unswerving in their support. It cannot be delegated to lower levels of the organization.
Five years ago, you launched a multibillion-dollar IT initiative, and the journey has been difficult. What do you know today that you didn't back then?
I would have moved much faster. We lost a lot of time in our own internal decision-making process, as we got people comfortable with what we were talking about. The second thing is we underestimated how difficult this is and, therefore, understaffed it and under-resourced it in the early stages. I would have started with project management capabilities and project leadership capabilities a year or two earlier than we did.
What did you do right?
Deciding unilaterally to nationalize the IT resource. If you look at the history of IT rollouts, you see moments where the leadership had to act this way. I remember a friend of mine; he was at EDS and was talking about a single platform solution for EDS. The company worked for three years trying to get to some agreement and finally the CEO walked in and told everyone what the agreement would behe made the decisionand things then got done. There are certain things that are very difficult to get done by consensus. Second, we are probably at the forefront of what's going on in medical care in the U.S., and that's a very important place for Kaiser to be. The end game, from my point of view, is that patients will be able to see doctors anywhere in the country and will have the benefit of information that moves in a secure way from one part of the system to anothercritical information that will keep them safe. It will all be seamless, and that is so far from where things are now, it's criminal.
At Harvard, while earning an MBA, you devised what you call the 80-20 Rule of management. How did you apply this rule to IT at Kaiser?
My 80-20 Rule comes out of quality improvement literature. You go for the highest frequency kinds of problems, and you solve those. It's called the Pareto Rule. Going after the last 20 percent is often very, very expensive. The cost and benefit of the last 20 is often not worth it. The 80 percent you can get agreement on pretty quickly. Many IT strategies flounder because they try and cast so wide a net that every persons' needs are met. That gets way too expensive and slows down the process. The rule is basically a strategy to identify the most important and useful features in an IT application and then drive their adoption while disregarding less important features. Medicine has been very, very loath to think about anything less than perfection. You want that if you are a patient, but supporting a doctor doesn't require a 100 percent solution.
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