Information Technology Setback: Heartland Healthcare System JACK MOORE HAD been frustrated throughout most of his career. Information technology (IT) was breaking new ground in the medical and corporate worlds, yet Jack found himself continually compromised by unimaginative bosses and organizations crippled by a lack of resources. But it looked as though things were about to change. Jack had recently been hired as the chief information officer (CIO) of Heartland Healthcare System, a successful multihospital system. It was his dream position.
The flagship 500-bed hospital is located in the major metropolitan area of a predominantly rural state in the Great Plains region. Heartland's five smaller hospitals of so or fewer beds are scattered throughout the rural regions of the state within a 100-mile radius of the flagship hospital. In addition, three specialty hospitals (heart, pediatrics, and orthopedics) thrive in the metropolitan area along with a very busy outpatient surgical center. The hospitals that make up the Heartland system are connected by a sophisticated helicopter transport system that quickly transports patients in need to the flagship hospital. The hospital system employs more than 5,000 staff members and 300 physicians, mostly subspecialists.
An additional 900 private-practice physicians have privileges at Heartland. Heartland's staff includes a sizeable number of nurse practitioners, who play a significant role in caring for the state's rural population and who staff a number of the primary healthcare clinics located in the metropolitan area as well.
When Jack was hired as CIO at Heartland, he was charged with two major responsibilities: (1) ensure access and interconnectivity of medical information among all of the system's hospitals, urgent care centers, primary care clinics, and private physician offices; and (2) install computerized physician order entry (CPOE). To make his job easier, he would report directly to the CEO. Richard Smith had been the CEO of Heartland for more than 15 years and was largely responsible for the success of the system. His one disappointment had been his inability to enhance the IT at Heartland. His failure to do so was in some measure attributable to John Forbes, the previous CIO, who was retiring after more than 20 years at Heartland and who was thought to be out-of-date with the current available technology.
Richard had often berated himself for not investing more in IT and for not forcing early retirement on John to better achieve this goal. Richard was pleased with his recruitment of Jack, who had very impressive IT credentials, although not in healthcare, and seemed competent and eager to move Heartland into the next generation of IT. Richard assured Jack that the needed resources had been budgeted and approved to achieve rapid progress, based on an earlier feasibility study by a reputable IT consulting firm. Heartland had engaged the firm to conduct the study, and both Richard and the Heartland board had been pleased with the firm's work.
The IT consultants had indicated in their study that the existing XYZ system at Heartland could be upgraded to the new CPOE system for a cost of $3 million. An upgrade seemed like a reasonable solution to the immediate problem, but Jack felt it was a myopic strategy if Heartland were to move into future cutting-edge technologies necessary to maintain its command of the market. The plan certainly did not mesh with his personal ambition to build an IT system at Heartland that would be the envy of healthcare organizations across the Midwest. Eager to bring Heartland's system up-to-date as quickly as possible, Richard did not need much convincing of the wisdom inherent in Jack's strategy.
Subsequently, a three-vendor search and formal bid process yielded a $10 million contract with MedCor to implement a new IT system with promises of the desired interconnectivity throughout Heartland, electronic medical records, and CPOE -- in short, state-of-the-art healthcare delivery system technology. As the project progressed, Jack hired Les Atkins, a local independent contractor, to manage the hardware conversion. This conversion was a much more complex undertaking than Jack's previous experience had prepared him for, but he felt that with Les's help, the project would move forward. As work progressed, Jack found himself relying more and more on Les and his advice on managing the project. Les began contracting for more and more staff time from his firm to work on the implementation, even though using Heartland IT staff would have been less expensive and certainly better for Heartland staff morale.
The staff were beginning to grumble that they were being left out of the loop and did not know what was going on. The sense of being left out of the decision making on the implementation began to escalate as the accounting staff responsible for patient billing and the nursing staff responsible for patient care were ignored.
The nursing staff became especially vocal in their chagrin at not being consulted as decisions were made that affected their patient care activities. The vice president (VP) for nursing wasted no time in making her concerns known to the CEO, but they were largely unheeded. Richard thought this was yet another example of the VP's marginal cooperation with other departments in the organization, a problem he had raised during her last annual performance review.
To the hospital staff, Jack and Les seemed to be making decisions in isolation with the unflinching support of the CEO. To Richard, the hospital staff, especially nursing, were being resistant to change as usual and were attempting to thwart the forward progress necessary to bring Heartland's IT into the twenty-first century. As staff morale plummeted, speculation among the staff began to focus on the appropriateness of Les's firm's business transactions with Heartland. The purchasing staff let it be known that Heartland had purchased 40 keyboards and mice from Les's firm without a formal bid process.
Then the unthinkable happened. Two years into the contract and $8 million into the $10 million project, MedCor was sold to another company, which dropped the patient billing system product that was an integral part of the project. Nothing in the contract protected Heartland from this eventuality. In an effort to minimize the financial loss, Jack went back to XYZ, which said that with the remaining budget of $2 million, they could upgrade to the new CPOE system. Richard was dumbfounded.
Jack had recommended MedCor so strongly and was so confident that it was the perfect fit for Heartland. Following the initial shock of the disclosure, however, Jack was able to convince Richard that this unfortunate turn of events could not have been foreseen. As Jack put it, it was a minor setback that would not prevent Heartland from moving into the technology future they both desired.
In the aftermath of the MedCor debacle, Heartland hired Les as its full-time manager of hardware support. Jack was shaken by the MedCor departure and believed that he needed Les even more. It was common knowledge among the Heartland IT staff that Les had no formal degree. Not only had Heartland waived the position's requirements for Les, but it had also not posted the position. Today, Richard still has high hopes that Heartland can acquire state-of-the-art technology like that of hardware system giants in the corporate world.
Although he has less confidence in Jack and suspects that Jack is more interested in building his own personal technology empire, he does not necessarily see their goals as being mutually exclusive. The hospital's IT staff clearly lack confidence in Jack's leadership ability. They see a firewall between the employees doing application support and IT management. The nursing staff believe that Jack has no concept of the hospital's mission of patient care and no interest in involving patient care staff in technology planning and implementation.
The accounting staff are convinced that Jack has no business savvy and does not adequately focus on business applications. In fact, one employee was recently overheard to say, "Jack is more intent on being a cutting-¬edge IT think tank than being an integral part of a hospital system whose job is to serve patients."
Question: In the above case study, a health care executive is faced with an ethical problem.
a). Explain the executive's ethical issues faced.
b) Proposed a solution to the issue.