1 University of Minnesota Information Technology in Healthcare Medical Industry Leadership Institute Course: MILI/PUBH 6562 Fall Semester B, 2014 Stephen T. Parente, Ph.D. Carlson School of Management Department of Finance
2 Class # 2 - Translating Demand into Information SystemsEconomic evaluation of Health IT industry How do data & medical care fit together? Health information systems portfolio. Lab #1: Identifying a vendor-supplied application. Primer on systems evaluation. Information Technology Overview
3 Need: What you want (regardless of price).Demand vs. Need Economics definition of demand: The amount of a good you’ll demand at a given price, holding all else constant. Need: What you want (regardless of price).
4 Prefer Information Demand Rather than NeedYou are taking into consideration the price of the information ‘good’ you are buying. You have some implicit ‘utility’ of the information you are buying and know the trade-offs between buying more information as opposed to other resources (e.g., labor).
5 Information Demand Curves What do they say about the willingness to pay for info?Reid Memorial Price quoted for info $10M McConnell Memorial 1 5 10 15 20 Ad Hoc Reports Demanded
6 Reid has set as a goal to complete 19-20 formal analyses per year. Why Different Curves? Reid has set as a goal to complete formal analyses per year. McConnell would not buy as much data when the price is steeper. Other reasons?
7 What Creates Information Demand?Management seeks to identify sources of: Higher/lower cost Higher/lower quality High productivity (greater output, same inputs) Higher efficiency (greater output, less cost) Required for Compliance Government Institutional Interest in Research
8 How Much Information is Demanded?Depends upon situation: Is it required? Will it need to be updated continuously to be valuable over time? Will it have other unforeseen purposes? Are there partners to split the cost of getting the data? Will obtaining this information provide ‘too much information’?
9 What Will Effect the Value of Information? - 1It’s not just data, it’s information Relevance (want to compare apples to apples) Sensitivity (broad numeric categories may not do) Bias (systematically observing the wrong patients)
10 What Will Effect the Value of Information? - 2Comprehensiveness (everything you need to know) Timeliness (when you need to know it) Action-oriented (to fight the right fight) Performance-targeted (and claim victory) Cost-effective (so that an accountant won’t blush)
11 Next Up: Data and Medical CareHow do they fit together?
12 The Days in the Life of an ‘Medical Encounter Record’The Players Dr. Bob’s Office Junior Dr. John’s Office Junior’s Mom The Hospital Dr. Bob, Pediatrician Dr. John, Surgeon The Insurer
13 Today’s Encounter: The TonsillectomyJunior says he’s feeling sick. Mom decides to take Junior to the Pediatrician Dr. Bob (the Pediatrician) decides Junior needs to have his tonsils out. Bob’s office bills for the office visit “ “ bills for throat culture “ “ makes a referral for Junior to see Surgeon PPO pays for visit & culture PPO approves Dr. Bob’s referral
14 Surgeon John evaluates Junior for surgery.Talks to mom about prior medical history and scheduling. Dr. John has administrative assistant set up appointment at the hospital. John’s office bills for the consult “ “ sets up surgery date for John w/Hospital The hospital admitting department sets up a record for Junior PPO pays for consult PPO approves Dr. John’s choice of hospital for surgery.
15 Mom takes Junior to the Hospital’s Admitting Department.Admitting checks Mom & Junior’s health insurance coverage (Mom is primary insurance holder). Admitting say they’ll admit Junior to stay overnight. Mom says Dr. Bob though it was a same day procedure. In addition, Mom is concerned about paying an inpatient deductible. Admitting calls Mom’s PPO PPO customer service representive queries the online ‘membership’ ship. Mom has great coverage. Admitting tells overnight or same day are covered at the same copay. Mom prefers same day.
16 The Operation The Hospital submits lots of billsLab work Blood Anesthesia ER room time Supplies Surgeon John submits a claim for surgery. Dr. Bob submits a claim for IP consultation. Internal hospital systems affected: Inventory Payroll Accounts receivable Medical records PPO reimburses hospital. PPO reimburses Dr. Bob PPO reimburses Dr. John
17 The Recovery Junior has a follow-up visit with Dr. Bob“ “ “ “ “ “ Dr. John Dr. Bob submits claim for visit. Dr. John submits claims for visit PPO pays Drs. Bob & John OTHER POST-OP Hospital pharmacy bills for pain medication Mom’s Flexible Spending Account pays for drugs. Lots of ice cream from Mom.
18 The EMR ‘Paper’ Trail: Insurer/PPO PerspectivePatient ID Provider ID Proc $$$ DOS E/P Owner Junior Bob $50 4/03/12 E B.Off. Junior John $100 4/05/12 E J.Off. Junior Hospital 350 $4200 4/10/12 E Hospital Junior Hospital 350 -$4200 4/10/12 E Hospital Junior Hospital 350 $2000 4/10/12 E Hospital Junior John $2100 4/10/12 E J. Off. Junior Bob $50 4/13/12 E B.Off. Junior John $75 4/16/12 E J.Off. Junior Hospital RX200 $160 4/10/12 E Hospital
19 Finding the Value of Information Using the IS Portfolio ProfileA set of IS applications used by an organization Result of choices made over years Represents a finite number of categories The IS Portfolio Profile: Representation of relative importance of the categories
20 HISP Strategic Performance Evaluation Approach
21 IS Categories
22 Lab #1: Identify a Vendor-supplied ApplicationParameters: Client: 300 bed hospital Must have software features: Computerized master patient index Computerized order entry for laboratory, pharmacy and radiology Be suitable for (coming) federal interoperability standards Operating system: UNIX or Windows Server Must be Health Level 7 (HL7) and Meaningful Use compliant Assignment: Research using all available resources (e.g., WWW, LEXIS-NEXIS) Write a 1-2 page executive summary describing UP TO THREE possible vendors and their approximate costs & include URL references(s). Describe CAUSAL link between system objectives & features. Due November 4, 5pm by with comment – 6562 Lab #1.
23 The Information System Development Process1. Systems Analysis 2. Select Design Approach 3. Design 4. System Implementation 5. System Maintenance
24 Information System Development Process - 11. Systems Analysis Review current information system Are you creating a new system of modifying a new one? Establish the system requirements This is a process where one collects facts about the system REQUIREMENTS and the ENVIRONMENT it will function in.
25 Information System Development Process - 22. Selection Design Approach In-house Vendor supplied “Pick your architect”
26 Information System Development Process - 3ADesign List the following: a. System objectives b. Output specifications Purpose Content c. Input specifications Data Forms Coding Conversions
27 Information System Development Process3. Design - continued: D. Master File(s) Specifications Content Security E. Procedures and Data Flow Identify the ‘cogs’ of the machine Use flow charts to describe how chart ‘A’ gets to decision support system ‘G’
28 Information System Development Process - 3C3. Design - continued: F. Cost-Benefit Analysis Development costs Operating costs Maintenance costs Benefits Work hours saved Adverse drug reactions avoided Increased patient demand G. Management Approval
29 Cost/Benefit Example When does MicrohealthTM IS investment breakeven at Clinton-Cruz Hospital? One time costs: $500K Annual costs: $300K Revenue Projections: year Expenditures Projections: year Labor cost 2 million Labor cost w/o 2.5 million
30 Information System Development Process - 44. System Implementation “The Construction Phase” Write or buy software Buy new equipment Hire and train new staff Convert all data files (or paper records) for your system System testing
31 Sources of Information on Vendors and SoftwareDirectories and Guidebooks Exhibits at Professional Association Meetings Internet Direct Contact with Other Users Hardware- and Software-User Groups Consulting Firms NETWORKING
32 Packaged Software Evaluation CriteriaCongruence with organizational requirements Level of satisfaction of other users Compatibility with existing hardware & software Ability to interface/integrate with other apps Support available Training, documentation & maintenance Costs lease, add-ons, set-up fees, maint. costs Financial stability of vendor
33 Out-sourcing score cardPrior experience Financial stability Credentials of personnel Uses principles of system analysis & design Thoughtful cost estimates vs. ‘how much do you have?”
34 Information System Development Process - 55. System Maintenance Often ignored Problem: once operational….. WHO CARES? Evaluation: Are objectives being met? Was the cost/benefit projection correct? Re-engineering plan
35 Health IT Hardware OverviewComputer Components Virtual Components Tour Evolution of Health IT Processing Network Fundamentals Data Switches for the Health Internet
36 Clinical & Financial DataThe Health IT Pyramid Decision Support Software Life Support Software Clinical & Financial Data Hardware
37 ‘Hands On’ Components of Health Information Technology
38 Major Components of a Computer SystemPrimary Storage CPU 1. Arithmetic/Logic 2. Control Unit 3. Registers Output Input Information Secondary Storage Control
39 Central Processing Unit (CPU)Arithmetic/Logic Unit e.g., if diagnosis=‘diabetes’ then count patient Control Unit home of the machine code Registers place-holders within the CPU as it processes data.
40 Started off being very expensive Primary Storage Core memory: Read-only memory Random-access memory Cache memory Started off being very expensive Extremely cheap today relatively to a few years ago (32 MB, $1,280 in 1993; 32 MB, <$1 in 2014)
41 Magnetic disks (e.g., Hard drives) Magnetic tapes (e.g., Tape drives) Secondary Storage Magnetic disks (e.g., Hard drives) Magnetic tapes (e.g., Tape drives) Optical disks CD (700 MB) DVD (4,300 or 4.3 GB) Blu-Ray (25/50 GB) Smart cards Solid state drives (e.g., SSD / USB drives)
42 Handwriting recognition devices Voice inputInput Devices Keyboard Pointing device mouse trackball pointing stick Scanner Handwriting recognition devices Voice input
43 Output Devices Printer Dot matrix Laser Inkjet Monitor Speakers
44 Welcome to Prof. Parente’s Enterprise Server (Museum)Motion Activated Security Multi- Processor Servers Satellite Uplink
45 Secondary Storage Dual Mainframe Tape Drives
46 Secondary Storage: Mainframe Tape Drive
47 One of Eight Server Fans
48 I/O Peripheral Slots
49 Dual Processors & Heat Sinks
50 Basic PC Entrails
51 CPU
52 Connecting the Computer to Input & Output Devices – Old SchoolKeyboard Video Port Serial Ports Network Port Speaker & MIC SCSI Port
53 Secondary Storage II Floppy Drive Hard Drive
54 Secondary Storage III SCSI/SATA Hard Drive DVD
55 Primary Storage Peripheral Slots RAM
56 Power Supply Backup & ModemUninterruptable Power Supply (UPS)
57 Mainframe – Original Workhorse of IT
58 1970s - Setting the Stage for Bigger ThingsHardware innovations opened up new opportunities: On-line computer systems Still used batch for big jobs (payroll) Minicomputers Packaged systems
59 1970s - continued Packages developed: accounts receivable admissionsbed census inventory control medical records Turn-key packages: Vendor supplies hardware, software, installation support and training. Shared systems use a ‘hub’ use terminals forerunner of networks
60 1980s Microcomputers make rapid advancesInstitutions faced with more managers wanting systems tailored to their needs. Led to Balkanization of HMIS. Why? Technology is cheap Hospital departments start buying their own stuff Although stuff was cheap, the new product cycle rapidly accelerated.
61 1990s-Realizing integrated ISRadical market change in health markets has completed radical in IT change. mergers integrated delivery systems Health reform’s promise, threat and debris Health data standards Internet/intranet capability Privacy & security issues Consumers enter the health care market informed with MEDLINE data and clinical data from the web.
62 Intel processor mainstream purchase timeline: 1981-20001981: 8 bit XT 8086 1987: 16 bit AT 80286 1990: 16 bit 80386 1993: 32 bit 80486 1995: Pentium (80586) 1997: Pentium MMX/Pentium Pro (80686) 1998: Pentium II (80686 w/MMX) 1999: Pentium III (80686 Slot 2) 2000: Pentium IV above 1 Ghz.
63 Central Mainframe Configuration Client/Server Computing Overview of Networks Central Mainframe Configuration Client/Server Computing File/Server Architecture Distributed Data Processing
64 Central Mainframe
65 Client/Server
66 HSI Client-Server PlatformCooling Fans RAID Defined: Redundant Array of Inexpensive Disks RAID Disk Array, 6 Drive Bays
67 Multi-purpose Servers
68 Distributed Data Processing
69 Network Topologies Bus topology Ring Topology Star Topology
70 Software FundamentalsProgramming Languages System Management Software Operating systems Utility programs Application Software General office suite Statistical analysis Custom, visual programming design tools
71 Programming Language EvolutionGeneration Characteristics 1 Machine Language (0,1) 2 Assembly Language 3 Procedural Language 4 Application Language 5 Natural Language
72 System Management SoftwareOperating Systems UNIX LINUX Microsoft (Windows XP, Vista, Server 7) Utility programs File management Anti-virus Backup and security
73 LAN (local area network) WAN (wide area network) Internet Networking 101 LAN (local area network) WAN (wide area network) EDI (electronic data interchange) TCP/IP (Internet protocol) TCP (Transmission control protocol)
74
75 Circuit switching
76 The IS-way: Packet Switching
77 Multicasting
78 Lab #1: Identify a Vendor-supplied ApplicationParameters: Client: 300 bed hospital Must have software features: Computerized master patient index Computerized order entry for laboratory, pharmacy and radiology Be suitable for (coming) federal interoperability standards Operating system: UNIX or Windows Server Must be Health Level 7 (HL7) and ICD10 compliant by 2012 Assignment: Research using all available resources (e.g., WWW, LEXIS-NEXIS) Write a 1-2 page executive summary describing UP TO THREE possible vendors and their approximate costs & include URL references(s). Describe CAUSAL link between system objectives & features. Due November 4, 5pm by with comment – 6562 Lab #1.