Variability: Cost vs Benefit Balance Game

By Suma Gaddam, SVP, CIO, Care New England Health System

Suma Gaddam, SVP, CIO, Care New England Health System

You may have heard the term “variability” used in multiple contexts before. Oxford dictionary defines the term variability as a lack of consistency or fixed pattern; liability to vary or change. Variability is measured in descriptive terms usually by describing the spread or dispersion of data. There are multiple statistical methods to measure and describe variability such as range, standard deviation and variance.

The definition of variability seems to have a negative connotation, in that the object being measured changes constantly or is unpredictable and does not conform. In the context of organizational change management, change comes with a price tag. It could be in the form of dollars, resources, time or a combination of those. On the flip side, one could argue restricting variability could negatively impact innovation. That could be a true statement in the context of organizations whose primary business is innovation and their survival is dependent on bringing to market innovative solutions to address business challenges or enabling their customers to achieve competitive advantage in the market spheres. We all know true innovation is not cheap and not an endeavor that could be done as a business activity carried out alongside an organization’s primary business or major revenue generating agenda. Most organizations tread along the middle road where there is a respectable balance in assuming the investment risk of undertaking and infusing controlled, disruptive variability vs. forging the path of pure innovation and be continuously disruptive to their primary business.

Technology Variability, a Hidden Driver of Clinical & Business Variation

What we tend to not pay significant attention to is the hidden cost of variability arising due to technology variability. I define this term by stating it is the disparate and diverse nature of vastly necessary but often redundant and un-integrated/able technologies and platforms meant to meet the distinctive needs of an ecosystem of users. One could argue the use of technology is aimed to benefit the patient at the center of the clinical and the business enterprise of healthcare. You may have heard the term clinical variability which is most often talked about in healthcare industry, especially in the communities of health systems focused on quality, evidence-based medicine and outcomes measurement. Advisory Board reports that unwarranted clinical variation is responsible for 42 percent of wasted health care spending in the United States, and the bulk of variation at hospitals comes from just 16 percent of physicians. United States currently spends 17 percent of the national GDP on healthcare with that number is estimated to reach 20 percent by 2020. Clinical variation is defined as—the overuse, underuse, and different or otherwise unnecessary use of health care practices and services with varying outcomes (Lakier & Malone 2017). We can essentially spend a lot of time reviewing and dissecting the nature of clinical variation and the attributing factors, however it is important to note that expenditure or potentially avoidable costs contribute significantly to the overall “pass-on” costs in healthcare delivery without much check and balance. Organizations continue to struggle with price transparency as there seems to be no justifiable reason for the expensive nature of services delivered with no obvious improvement in outcomes or value to the consumer. Technology and other C-suite leaders must assume their part in contributing to the overall expense or cost posture of an organization’s care delivery model.

"In the context of organizational change management, change comes with a price tag"

What is not so obvious is the seemingly insatiable thirst to use “best of breed” everything. This approach stems from the need to use customized technologies tailored for the specific group of healthcare workers to make their jobs easier and faster. When easier, faster and interface-able technology is prioritized over the use of integrated/ able technologies, we end up with siloes of data that does not drive fact-based decision making across the care-team continuum. It does not result in better patient safety or clinical outcomes, nor does it reduce redundant services or the cost of delivering services.

It is no surprise that health care does not attract the best technological talent. There are a multitude of reasons, including the reputation that they are not “cool” places to be for the tech talent and may tend to be on the lower-end of the spectrum as far as compensation goes. Most workers buy into the not-for-profit mission, have someone in the family associated with health care and or happen to stumble into health care IT by happenstance and stay in it for the stability it offers as a career choice. Technology variability becomes an acute problem to overcome in many healthcare organizations as the shortage to attract and retain top tech talent persists. Talent shortages, especially around integration, architecture of systems, business analysis across the siloes of software, desktop mobility, information and application security, software development, cloud services and business intelligence and data transformation will define the eventual destiny of an organization. Organizations must call into question the logic and cost of designing, deploying, and supporting three different fax solutions tailored to work within specific platforms.

Needless to say there are incremental costs of such decisions as we need to identify workforce that can learn and be trained to support, maintain and troubleshoot three flavors of enterprise fax solutions. The complexity is visible if observed closely into the technology portfolio of an organization. Multiple flavors of electronic health records, scanning software, desktop infrastructure, network gear, telecommunications and wireless platforms, patient engagement tools, business intelligence tools and the list goes on. The indirect effects of talent shortages in these areas can be felt as underground tremors and can significantly impact the organization’s ability to compete effectively not only in the realms of care delivery; clinical and financial outcomes, but attracting and retaining clinical and business workforce as well. Technology variability makes it increasingly difficult for them to execute their routine functions in a highly complex environment where agile decision-making is not possible or can take an inordinate amount of manual work.

In terms of physics, technology variability is the “hidden” drag that makes the organization look less than competent in delivering its services. The operational expense of the organization is directly correlated to the technology variability. In other words, it takes more dollars to run an organization with increased technology variability and contributes less to the bottom-line. Leaders must pay attention to this factor as they are charged to make better business decisions.

Healthcare has moved into the digital realm. While the future may seem bright to some and bleak to others, it is important to note that the discipline of leveraging business insights derived from endless piles of data is paramount for the survival and sustenance of organizations. Reducing technology variation is an important step in moving to leverage the insights derived from the data because most healthcare organizations never have enough deep pockets to operate without margin, unlimited supply of talent that can make the data flow seamlessly between disparate software andthe ability to dedicate unlimited time, focus and energy on non-mission critical endeavors.

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