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  Today on Newsday.

we circle back with our clients and say, Hey, remember that TCO we did for you

how close were we? How'd we do? We want to know. We want to capture lessons, and we'd love to use you for reference on future work, right? But we don't get very many of those after action reviews,

  📍

📍 My name is Bill Russell. I'm a former CIO for a 16 hospital system and creator of This Week Health. where we are dedicated to transforming healthcare, one connection at a time. Newstay discusses the breaking news in healthcare with industry experts and 📍 we want to give a big thanks to our Newstay partners, ClearSense, HealthLink Advisors, Order, SureTest, and TauCite.

Now, let's jump right in.

(Main)  All right, here we are. It's Newsday. And we have DeFord joining us as usual. And we have Lindsey Jarrell, CEO of HealthLink Advisors with us as well. And we are here to talk about the news. Lindsey, welcome to the show.

Yeah. Thanks. Excited to be here. Looking forward to the conversation.

looking forward to, there's a lot of things happening in our industry right now. And we're going to, we're going to start with a goofy story and then we're going to go into the stuff that's probably a little more pragmatic, for the industry. Although we could talk about Apple's Vision Pro if you wanted to as well, but I don't really want to unless you guys want to talk about it.

I think we're going to see a lot of really interesting stories develop around that. So let's give it a little time to

build. We'll give it a little time. it has some interesting reviews so far. Some people are not real happy with their 3, 500 acquisition of a screen that they strapped to their face.

I want to start with this one. Just get your thoughts on this. Finance worker pays out 25 million after video call with deepfake chief financial officer. This was in Hong Kong. the person who was duped had some inkling that they were being duped. When they got on the video call, there was a whole plethora of people.

On the video call. So it wasn't only the CFO, it was a couple of his other colleagues, and they sounded, looked and everything else, like their colleagues. And it was at that point that person was like, yep, all right, this looks real. And they wired $25 million to the fraudsters. I'm curious, this is a new level of attack.

For us where do you go with this kind of attack and what could they do within a health organization? Drex I'll start with you and then I'll go over to Lindsey.

Yeah, I think it's interesting to, I've obviously I've read this story. I may have been the one who pumped it up to to thisweekhealth.

com slash news. But it's interesting to me that there's enough stuff that we've all put out there. on social media and podcasts and all those sorts of things that AI is strong enough now to be able to take that information and actually turn it into a fake version of you that can actually tell people to do things that sound very convincing.

And I just think we're at this point in time where Lindsey, I would say from an operational perspective, this idea of having some real clear, Defined procedures in place that are pre gamed and worked out ahead of time so that it's not just five people randomly on a Zoom call saying transfer money or sign the contract or whatever the case may be.

You need to have those procedures in place ahead of time,

right? Yeah, absolutely. It's very scary to me to think about what could be possible with that. I agree with you, Drex. we've got to have a clear procedures in place and we've got to really emphasize a safe environment where people have a delegated authority to say no.

Bill, I think you said they might have had an inkling it wasn't going right. And to know they can stop that and say no. And not fear for their job because the transfer didn't happen. But that's cultural, right? And I know you, that better than I do. It's cultural around setting the right protocols.

So people trust they can make decisions that don't seem right to them. That's very scary. I don't know. I hope somebody comes up with some technology that can decode some of that perhaps.

Technology that identifies deepfakes to protect us from deepfakes. And I, that probably is where it's going to go.

And you'll probably see it embedded into some of these into Microsoft Teams. You'll probably see it embedded into Zoom and some other things. I want to hit on actually, before we get there, Lindsey I think this is the first time for you on the show. Give us a little idea of HealthLink Advisors.

What is it that you guys do in the industry?

Yeah, happy to. Thanks for the opportunity. we were founded eight years ago, time flies. Myself and Chris Jenkins co founded the company. I was straight out of PricewaterhouseCoopers. I was a partner in our healthcare practice and revenue cycle practice.

And really wanted to get back to boutique consulting. So we founded HealthLink Advisors and have been really off to the races since then, growing organically for the last eight years. When you ask what we do, I think I would, really nail it down by saying the following. We are very focused in IT and digital strategy.

Also in IT finance and operations improvement. How can you run an IT department better and run it in a sophisticated manner with financial planning, financial safeguards? And really just get the processes nailed down so it runs better and get away from that kind of chaos that sometimes can be inside an IT department, especially in the large health systems.

We also do a lot of system selections. and optimization work. We call them platform selections now but they are up and down. We probably do, I think in 23, we did about 32 system selections for various clients. Interim leadership, and then finally program and project management on implementations.

But our sweet spot is in that IT advisory space in the office of the CIO.

Fantastic. Thanks for being a partner of This Week Health, and I look forward to working with you over the course of the year. Should be a fun year. And along those lines, we're going to talk about the Kauffman Hall National Hospital Flash Report.

This is the January edition, which reports on the numbers for December. And it's interesting. I'm going to, I'm going to read some of these things, and it's going to sound positive. But I talked to talked to some people this week, UPMC posted their first loss for a year in for the first time in 20 years.

Intermountain's margins are at about 1%. A lot of large health systems are at their lowest levels. Ever. And some of their key takeaways from this report are margins improved in December and are up by more than 15 percent compared to 2022, which marked the worst year since the beginning of the pandemic.

So I guess if we measure from the low point, we've improved by 15%. don't know if that's enough or not. Average length of stay has declined on a year over year basis and outpatient revenue has grown significantly, increasing by more than 40 percent compared to 2020, which I guess is pre pandemic.

what are you hearing? What do you take away? Lindsey, I guess I'll start with you. What are you hearing? What do you take away from where hospitals and health systems are at with regard to their financial

performance? Yeah wow, I feel like do we have two hours to talk about this one?

So a couple of reactions that one I love Kauffman Hall. I think they do great work in that flash report. I'm always a sucker to read it every month it comes out because it sometimes it's just confirming what we feel right through client meetings and trying to get sales and listening to clients.

So it's a good bellwether for us in terms of what we're seeing. And then, in looking at the report this month, Bill, one of the things I noted, which I also noted it towards the end of last year while we're seeing kind of overall index improvement, I think the stories in the regions, right?

Kaufman Hall breaks it down into four or five regions. And the fact that you've mentioned those too are in regions that are struggling more. You look at the South. Or the Northeast, and they're going gangbusters, percentage wise, compared to past performance. They're going gangbusters, all in on the margin index.

And we feel that, right? We we noticed a distinct change about October, November last year, where it seemed like dollars started freeing up in the health systems, and they were ready to engage and start spending money for us, with us, at a much more rapid pace than we had seen before. So \ we've been on, quite a run here for a while, so we're feeling in those regions that are doing well that they're ready to spend some money they've been sitting on for a couple of seeing that free up.

The other thing I'd mention about that is just what you said in terms of length of stay, there is an interesting dynamic going on, which we spend. A good bit of time addressing, and that is as hospitals move more business to their outpatient centers, the outpatient revenue side, and I think that Kaufman Hall report said there's in some areas, there's been a 40 percent increase of that, but many of these big health systems have these huge, big boxes that they got to keep full called hospitals.

in order to be profitable, right? So they're really in this tough spot of, I got to go compete outside my hospital wall, but yet I got to keep enough business to keep the hospital profitable. And that's quite a big swing to go through for some of these organizations. Especially when they're dealing with Medicare advantage cuts and other things like that.

So what we love to do is help the CIOs and IT leadership teams know how to respond to that and talk the business of health it. So I'm a sucker for a good Kaufman Hall Flash report and kind of understanding where the economics are, how they're performing.

Yeah. Looking at the Midwest and the Great Plains, they are, pretty dramatic drops in terms of where they were. I'm wondering if that's just a lag effect, that it's going to bounce back, or if that indicates a larger trend that we need to be looking at or concerned about.

Yeah. I don't know.

I wonder too. And I also wonder again just thinking through this without a lot of data in front of me, there are a lot of rural, small hospitals in those markets, right? That absolutely have to stay open or people don't get healthcare. And in talking to some of our clients, And that section of the company, there's just a big question of how do we keep, how do we keep doing that without the federal government support there to keep those small hospitals open?

I don't know if that plays into it or not. It makes me wonder.

Drex, we have a lot of these conversations with CIOs, and we've heard some interesting stories around the cuts they're being asked to make. And this, by the way, is on the East Coast, West Coast, Midwest. And numbers are they're beyond fluff, right?

moved beyond the fluff of every IT budget, at least back in the day, had some fluff in it that you could cut. We're moving beyond that. How do we make those cuts responsibly? How do we make those cuts and not? jeopardized the future of the organization. Yeah, I think there's

the, you cut into the meat and then you cut into the bone.

And I think in a lot of places we're cutting into the bone and not just in the information services department, but in a lot of places in these organizations too. So from a CIO perspective, it was always very important to me to go into whatever new organization I went into and immediately prove to my CFO, my CEO, my executive cabinet peers that I was going to be a great steward of whatever resources were allocated to me and I was going to be a great resource to all of my partners.

Meaning my peers in that executive cabinet, clinical research operations peers, I was going to be a great partner of theirs to help them get the things done that they needed to get done, help them, guide them through digital transformation and the work that needed to be done there. And so I know that's a lot of work that Lindsey does now and his team is really great at it.

I'd like to hear you, Lindsey, talk about how that turns out to be a really important part of building that foundation of trust, especially when we're in an environment like we're in today.

Yeah, and , I'm going to use the consulting buzzword as much as I hate it being in the consulting business and talk a little bit about operating models.

So when we use the term operating models, what we mean is the organizational structure of, in this case, IT. And how that organizational structure through process and accountability serves the business, right? The business being all aspects. And we talk and teach and collaborate a lot on that operating model.

And so when you, to go back to what you were bringing up, We want the CIO sitting there peer to peer with their business leaders, thinking about how are we servicing the business, how can I stay ahead of what they're going to need. And we even use the terms like, internally we need to be account managers to our service lines.

So we can anticipate what they need from IT, right? But you also need adaptability in the operating model. I'll give you a good example and just one example is The PMO architecture, right? Does an organization need a project management office in IT? Yes, perhaps, but just because that office was 18 people 1 year does not mean it should be 19 people the next year.

Especially as the organization moves towards the PMO and servicing faster growing service lines. That's one aspect of what does the operating model says works best to serve the organization. And maybe the CIO has to come, or should come forward and say, I've been thinking about the PMO and it would be better under somebody else as an enterprise PMO, and then I'm going to figure out how to integrate a service model into that.

And that's what we mean by operating model. Are we really adapting to serve the business? That kind of mentality when you got a cut to the bone, you can then go to the table and essentially say, maybe virtually or for real, help me, I've got to reduce another 5%. I need my business leaders to help me figure out how to do that.

Because I'm not going to go get it out of vendor contracts anymore. And when we see that, that's pretty exciting for us, because that's partnership and communication. But, that's not easy to do, right? I want to be careful that we don't sound preachy, but we love to work with organizations to help get them there and be that respected partner at the table.

Yeah, that

kind of behavior is I would say pretty unusual, right? You often see CEOs and CFOs go to the CIO and say, cut this much more out of your budget. And then they just try to figure it out. This version of an operating model where we actually sat down with all those business, clinical and research partners and say, I need everybody to put on their big boy hat.

And look at what we're spending money on and realize we're going to have to pull back somewhere. Where do we pull back that makes the most sense for the whole organization, as opposed to me trying to figure out how I'm going to cut money in the budget, but continue to try to provide the same level of service when I've already done everything I can to wring out those optimizations.

It's a pretty

cool setup. it's untenable, right? There's a no win situation. And then the CIOs, you do that long enough, as we all know, one day you wake up and you're like, man, what am I doing? I'm on an endless treadmill, right? And then the burnout starts and yeah. Talking about capacity, what do we have the capacity to do?

What is the business priorities? How are we budgeting? What's our return on use of capital? Those are great, sophisticated conversations to be having with business leaders. and I know the CIO or IT leadership or CDO, whatever it is, once they get the equipment and the tools to have that conversation, they love it because they get to engage fully with the business.

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Yeah.

we talked a lot about metrics at the last 229 project. We were sitting around in a group of CIOs and It was interesting to me that we're all not talking about the same metrics yet and that some are still what's the best way to say this, very technology focused while others are business focused.

And does that get driven? By the organization driving it down, or is that the CIO taking a little different perspective and saying, look here's a set of business objectives, business kinds of metrics. We want to look at the return on investment. We want to return on capital and those kinds of things.

Where does that originate from?

In our experience, it CIO generally an evolution. I'll tell you, we've got a couple of great recent examples, just pulling on that to answer this question, where the CIO was really interested in engaging more in those business metrics to judge performance and building that into governance and conversations.

But they were reticent to go forward because they thought they'd be judged by other business leaders that they were trying to bring business metric forward. And in both of these cases, we found the inside champion inside the org, the CIO went to that champion who was an outspoken, extroverted business leader and said, I want to do this.

Will you help? Essentially sponsor me, but it wasn't, they didn't work for him. And absolutely, and then they had a champion at the table that looked at the CIO and said, that's a great idea, we need to be doing more than that, right? And then all of a sudden, the walls were broken down and everybody was off running about how IT performance would be measured differently.

But that's a, I think a little bit of a barrier to overcome is changing the conversation. Because so many are still reporting. The number of projects we did last year the amount of time on hold for the help desk, the amount of downtime, right? And while those are good metrics to manage IT Ops that's not what the Oncology Service Line Leader wants to hear about.

the world we live in today either, I don't think.

I'm sorry, Joe. I was just going to say, the other part of this is, I think, when you talk about a project management shop, this idea of bringing forward actual business

nb

plans from the Oncology Vice President's position says, if we do these things, if we do this, Oncology project, which we're also going to call it an IT project.

We do this thing. Here's the benefit. The company gets out of it. We're going to be able to see this many more patients. We're going to have this much shorter of a wait time for patients to get in. We're going to be able to do it with this many fewer staff, whatever the case may be. That comes forward as a business plan so that it isn't just Costs that allocates to the CIO's budget as a new thing they have to support, but it is offset by actual business results.

And I think that's where, in my experience, I've seen the PMO become the machine that then becomes, we like how you're doing that in information services. Let's turn that into an enterprise PMO, so that everything has a business plan and has that kind of a budget for, CapEx and then OpEx tail management over the course of the next several years.

What are these things going to cost? A lot of that doesn't happen without a good PMO design.

Yeah, you're exactly right. And I'm

wondering, also, we do a lot of projects in IT, we do every project that happens, almost, that I can think of, has an IT component, an inertia towards not measuring a project once it's done, to doing the celebration dance as soon as it's done, but not coming back and saying, hey, did we hit these metrics?

Oh, and by the way, we said we were going to create these efficiencies for the organization. Did we realize these efficiencies for the organization? And this might get back to what you were saying, Drex, of the trust. Could we establish more trust by actually doing those kinds of activities? And I don't know, being responsible for the promises and the delivery of the things that we say in the governance process of asking for the money.

It puts the ownership also of those IT projects in the right place. They're not really owned by IT. There owned by them to make sure that they deploy them and implement them. Efficiently. But there's a lot of all the people process change management stuff that needs to happen in the clinical department or in the research department or in the business department that need to be done.

And that's really where the project should be owned. And it also creates that kind of trust too, that we can do this IT project, it's gonna be really expensive and it's gonna be twice as expensive if you don't do your part and pull that project into place.

Just to add a little bit to that.

We do a lot of total cost of ownership work. And I've mentioned we do system selection work. That's always baked into those projects. But we get asked quite frequently to do work and they say, we don't need a system selection. We just want to know if we can afford Workday, or we just want to know if we can afford Epic, what's the best path, what's the timing, what's the total, and so our approach over a 10 year total cost of ownership model is to look at all sides of the transaction and so those models, when delivered.

Are just massively complex and detail oriented down to the line item level of what application we're going to sunset once it's live in month 8 and month 9 and month 10. So we do a lot of those, and then we circle back with our clients and say, Hey, remember that TCO we did for you 12 months ago?

How close were we? How'd we do? We want to know. We want to capture lessons, and we'd love to use you for reference on future work, right? I want to be careful what I say, but we don't get very many of those after action reviews, because once it's approved, it slides into the responsibility of finance to track the invoices and report.

And then that's how folks track a project. What we've turned that into now is when we deliver this, the TCO document is to turn that into a budget tracker and say. Look, the finance manager in IT needs to keep this updated in parallel with finance because you're accountable, right? You've walked the plank to get this approved.

Now we're accountable to deliver it as we said we would. And then you've got a story to tell on top of the business rewards that come out of it. But that whole financial discipline, we're Really passionate about that work, and I just think there's a lot of room for improvement in it and partnership with the business in that regard.

I could go on for a while about that,

well, gentlemen I appreciate, Lindsey, how do we know we're actually talking to you. How do we know we're not talking to a deep fake ?

Do you have a feeling in your gut that it's me or No? No.

it feels like you, you've answered these questions pretty straightforward.

But man, there's enough video out there. We could do some fun things with Drex, I think.

That is true. And we'd suddenly have to ask him to transfer the money late in the call. So

yeah, it's a little too late for that. Lindsey Drex, thanks for coming on the show. Always a pleasure.

Yeah. Thanks very much.

Thank you.

   Thanks for listening to Newstay. There's a lot happening in our industry and while Newstay covers interesting stuff, another way to stay informed is by subscribing to our daily insights email, which delivers Expertly curated health IT news straight to your inbox. Sign up at thisweekealth. com slash news.

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