On a merger mission
“I always compare it to a conglomerate of 150 or so businesses, all with a turnover of $2 million to $50 million. What we are trying to do is bring them all together into a shared information platform.”
healthAlliance was formed a year ago to deliver non-clinical services such as IT, procurement, payroll and finance — to the four Northern Region DHBs — Auckland, Northland, Waitemata and Counties Manukau.
With a 250-strong IT team managing more than 18,000 screens and 26,000 users, healthAlliance is one of the most significant shared services organisations in the public sector. It was also named the number one IT using organisation in New Zealand in last year’s MIS100 report.
Johan Vendrig will be one of the CIO speakers at the MIS100 2012 Event in Auckland on June 7.
What matters most
Amidst this backdrop, “It is important for our teams to get that culture right; of criticality, of robust safe and reliable systems,” says Vendrig. “If our systems break, it will affect patient care and safety.”
The goal, he says, is “around creating information systems and solutions that are facility- or health provider-agnostic, independent of where or who delivers the service.
“The more we make systems patient-centred, rather than provider-centric, the more we enable providers to share systems. This does not only improve efficiency but more importantly also the continuity and integration of care” he says.
The importance of all these objectives was highlighted during the Christchurch earthquake. Although a patient’s record stored is in a primary care centre, when the area is red labelled, you can’t access the record, he says. But if the health sector agencies do things independently, there is no way they will be able to afford shared IT services with the level of resilience that is required.
He says as health care providers become more reliant in information technology, investing in resilience and robustness of the systems becomes critical. “The real challenge is to explain to people shared services it is not about reducing total cost but [is] instead managing the cost growth associated with the upcoming investment in safety and reliability of shared clinical systems.”
Vendrig says healthAlliance is a completely new organisation, referring to the earlier shared services organisation of the same name established by the Counties Manakau and Waitemata District Health Boards. It is jointly owned by the four Northern Region DHBs and Health Benefits Limited.
He says there is a strong commitment from the DHBs that for shared services to become successful, there has to be process alignment, consolidation of a number of systems, better sharing of information and reduction of complexity.
Today, he says, there is a strong focus on integration and standardisation of IT Service Management processes to achieve operational excellence and ensure IT services are safe (patient focus) and reliable (clinician and customer focus).
“Once you standardise, you can achieve efficiencies,” he says. “A very clear effect that we have had is almost a negative economy of scale on day one. We have three sets of processes, three networks and four sets of legacy apps that number by the hundreds.
“It is very important for us to just consolidate and reduce the complexity as much as we can,” Vendrig says. While this process may take several years, he says the organisation has targeted priority areas for consolidation by 2014 in line with the National Health IT Plan.
“We are introducing more regional systems every year,” he says. “We have a significant number of regional projects underway; some are merging and consolidating functionality and some are introducing new systems and functionality. We [also] have many tier 1 and tier 2 systems. If you bring all of those together, the level of investment in change is so high.”
This change requires investments in both capital and manpower, he says. “The four patient administration systems, for instance, are very core to operations. Those alone will require tens of millions of dollars for us to bring them all together into one.”
He says the four organisations “are trying to collaborate as best as they can”. The focus is on bringing professional and clinical leaders across the region (and in some cases across NZ) together to agree on process alignment so they can jointly decide on the way forward across the DHBs.
Protecting the core
Apart from the ongoing integration there is another area Vendrig is focusing on – protecting core operations .
“There is a real tendency for people to deprioritise operational activities and investments in favour of projects,” he says. “It is important not to underestimate the need for balance: How do you deliver safe, reliable operational services as well as support projects?
“If you want to do these projects, you will have to provide funding, otherwise you will keep undermining operational services.”
“Once you have made version 1 your live system, you don’t have the luxury of version 2 stopping [when] you have to go from one live system to another,” says Vendrig.
“People underestimate the challenge around testing the complexity of doing that,” he says. “I know you can make a complex solution work but can you keep it working? How do you keep a clinical workflow process safe and reliable when it requires four or five different tier 1 applications from different suppliers as well as multiple interfaces to be in sync?”
This perspective is important, he says, because of the scale and complexity of the Northern Region DHBs’ information systems.
A key focus today is getting the documentation of core operational procedures at the right level, he says.
“Individual groups have been around for quite a while and we are bringing the knowledge of these individuals together. We can’t do that without documentation and standard operating procedures.”
Because of the scale and variety of its systems, healthAlliance is now benchmarking itself against service providers like Gen-i and HP, and also of larger organisations like Fonterra and Air New Zealand. Auckland Council is also one of the organisations in the list but at the moment it is also in the process of merging their systems. But the most relevant one, he says, is New South Wales Health, which has also established a common shared IS services across health services. Vendrig says the sector also looks at solutions in other countries such as the US, Denmark and Canada.
Vendrig came to the role after nearly five years as CIO of the Auckland District Health Board — one of the owners of healthAlliance. But his involvement in IT leadership roles in health began more than 15 years ago, in his native Netherlands, where he also completed a paper on health information systems at the University of Maastricht.
At EDS (now part of HP), he was manager for health accounts in Auckland and Wellington. He managed the outsourcing arrangement with Capital Coast Health when it outsourced its IT to EDS, now part of HP. “I have learned a lot from managing that relationship, what worked, what didn’t work.”
He joined the Auckland District Health Board as IS alignment manager, and eventually becoming its CIO. He says his experiences at the DHBs provided him “a very good understanding of the challenges we are facing”.
When he was Auckland DHB CIO, he was asked to lead the team investigating and addressing the complaints from doctors and patients when Labtests took over from Medlab as the main provider of community pathology services in the Auckland Region.
The Quality and Safety Turnaround Assurance Team reported to the chairpersons and CEOs of the three DHBs in the Auckland region. These interactions proved useful in his current role — where he has to interact with four boards. “The main learning out of that was, how to deal with this very complex governance structure and quite often in high pressure high risk issues?”
He appreciates having a leadership group that understands the goal of the organisation “is not about IT, it is about delivering better services to patients. And IT enables that.”
Vendrig is emphatic about having his team’s continuous interaction with the clinicians, ensuring they have clinical sponsor for their projects. It is important for the IT team not to “get too distant from the reality of doctor patient encounters”, he says. They invite clinicians to give briefings, in order to bring a “more clinical culture into our teams”.
He is also seeing a move towards clinicians and patients collaborating around a central place, in a Web 2.0 environment. He says there are huge challenges, however, in this shift. “It comes back to how can we keep systems safe and reliable? How can we share information in a sensible, safe and secure way? Who can access [the] information?”
He says that instead of large scale investments in that space, healthAlliance is looking for smaller scale projects working with a small number of strategic health IT partners.
Cross department and cross agency collaboration is also important for planning, research, education and business support functions. He says an incremental approach is preferred in this area and there is a real concern around long-term licensing arrangements. He says open source can provide alternative licensing mechanisms. “The scale of licensing is a real challenge,” he says. “I am happy to look at hosted or as a service type options. Cloud service offerings are becoming more relevant to the sector every day; I do not have to manage or host it all myself.”
More important is having the business enablement team skill set that understands the technology. “Effective collaboration doesn’t happen automatically,” he says. “Everybody says it is easy to set up a wiki and everybody will use it. It is the making it work that is really the challenge.”
He says an “incremental approach” would be to build a “business enablement team that will work with departments and make it work with them”.
He says at the moment, they are using some software as a service, such as the Moodle online learning environment. “There is an awful lot of potential for both clinical and administrative collaboration solutions and,” he says. “We can do a lot more; there is a lot more users out there that would love us to do more in this space.”
Having worked on both the demand and supply side of IT services, Vendrig has a strategy for vendor management other CIOs can adopt. “That background, that understanding is very powerful to have now as well because you can have those open conversations with your suppliers,” he says. “Every year, I take my business plan and publish it to all my contacts in the supplier market.” The underlying message is this: “If you want to talk to me about something, this is what we are up to. If you can help me with this, then please talk to me. If you can’t, please stay away because it will be just a waste of time.”
If he does get a cold call, he says, he just sends that information. “Have a look at this,” he would say. “If you can highlight a couple of paragraphs on how you can make a difference to me, then let us talk.”
Vendrig unwinds by fishing, running and mountain biking. These activities, he says, are “family time” for him and a way to stay fit. He loves to travel and spent four weeks in Nepal with his Kiwi wife last November. “No phones, no electricity, just hiking,” he says, smiling. “It is refreshing to have a complete break now and then.” Photography by Tony Nyberg
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