No article today, just some stories from conversations. What do you do when you are asked to make cuts you know aren't feasible?
Today in health, it stories from the trenches. My name is bill Russell. I'm a former CIO. For a 16 hospital system and creator of this weak health, a set of channels dedicated to keeping health it staff current and engaged. We want to thank our show sponsor shore investing in developing the next generation of health leaders, Gordian dynamics, Quill health tau site nuance, Canon medical, and current health.
Check them out at this week. health.com/today. As you know, I have a lot of conversations with CEOs throughout the course of my work. And today I want to talk about some situations that I've heard recently that I thought the community might benefit from. The first one is just an interesting scenario that I hadn't considered that one of my CEOs, , that I talked to pretty often shared with me.
And it is a decision to select software and actually do an implementation of software because they could not afford. The ongoing maintenance and costs of the software that they were currently running. So essentially they had something in place. It was working. Physicians loved it. And they made a decision to move to a different solution because overall it was going to cost them less money to.omy for the better part since:
Where you're going to look at your overall operating budget. Determine if there are solutions. Out there that just costs too much money to run. Now, clearly you're not going to do this with every system. You're not going to replace your EHR with a lower cost EHR. , in last, quite frankly, you do the math and you look at it and it does make sense. That's a big lift for that. But if you're talking about one of the smaller systems that's connecting in.
And providing some additional services. It might be a viable option. So as I was thinking about that might be a strategy to look at. You're going to be asked to reduce some costs, especially on the operating side. , look at your overall cost of things. Look at solutions that are out there right now, some of the other solutions that are out there do the same work that you do. What, what turns out to happen with a lot of tools as you put the tool in place?
And you buy all these things that the tool brings. And you only use 20% of what the tool brings to bear anyway, but you're paying for a hundred percent. And what you might find is that you can get that functionality for a lot lower costs from someone else. The other thing you could do is just look at the contract and see if you can just negotiate for the pieces of the solution that you actually use.
, we did a rationalization early on when I was at, , St. Joseph's CIO, and we looked at all the different applications, but specifically we looked, I had them look at the functionality within each one of the applications to see what our utilization was of that functionality. And it turned out. A significant amount of the functionality that we had purchased we didn't use. And it was an opportunity to renegotiate some of those contracts.
So that's scenario number one, just wanted to share it with you, probably an opportunity for you there, especially if you're with a smaller health system, I'm finding. The smaller health systems are more cost-conscious right now. Than they've ever been. Since I've been in healthcare. So that's one.
, the second scenario
Something's changed in your organization and they're asking you to make cuts. It could be, you've been there for five to 10 years and things were rolling along just fine. It had changed in leadership. Somebody walks in and says, Hey, a little different direction here. We want you to make this level of cut and you know, full well in your head. There's no way we can make that cut and still operate it at the level we should.
Uh, it could be that you just took a new job. And you walk into that job and you think, Hey, this, this is what the job is going to entail. And they're going to invest in it. It's the reason they hired me. And low and behold a couple of weeks later you're sitting in your office and somebody comes in and says oh yeah and by the way we want you to do some cuts so this cuts conversation is probably going to be more common these days than it's been in the past
. What does that look like when that happens to you? , what you're going to want to do in those cases. I believe. Is identify what they want from you. Right. What do they expect you to deliver? And then determine what it's going to take to deliver on that promise. . When people ask you to do the impossible, you have to help them to understand because sometimes people are asking you for things to see how far they can push you and how far you will go.
And your role is to not let them push you beyond the point that is bad for the organization that you work for or the community that you serve. Right. And so you, can actually tell the story, in those terms, you can say, . If you push us to this level, we're just flat out going to have to cut out these services.
I've been asked several times in my career to do cost-cutting measures. And almost every time I've done it, I've let them make the decisions. But I've teed up the story. So whether it was a $250 million budget or a $6 million budget, and quite frankly, That the smaller, the budget, the harder it is.
Cause they're asking for percentages and they're significant in terms of the overall percentage. So, you know, what I generally do is exactly what I just said. I sit down with the financials in a larger organization. I sit down with the financial person. And I go through and I say, all right, they're asking for the deepest level of cut. And I say, all right, let's look at what we have to deliver. What we, what it will cost us to deliver on those promises. What does it cost us to keep the data centers running? What does it cost us to keep things maintained? What does it cost us to make sure that , we're not running end of life equipment? What does it cost us to make sure that the software is updated? What does it cost us to make sure that the security is in place?
You have to know what your baseline is. Right. So you establish that baseline. You put it in front of them. And you say, look. This is what it costs us to run it. You're you're asking us for this level of reductions. Tell your team, here's the low point that we're going to be asking for , what would we have to cut out from your organization in order to cut that level?
And then go up a little bit from that and say, all right, what would we need to cut out here? And what would we need to cut out here more times than not when I've positioned things with multiple levels of cuts. And, , educating the, leadership team on it when they are given the opportunity to make the decision. And I want them to make the decision.
Because even if they choose the draconian. What they're going to do is they're going to understand and accept. I'm going to have a presentation that shows. You asked for this, you said the financials was the most important thing right now. Therefore we can cut our service desk, I want you to understand what this means. We're going to reduce our service as staff by five people. We only have 15 people. That means there's 10 people. We handle this many calls.
This many calls means the wait time is going to go from here to here. You understand what I'm saying? Or we handle 110 projects at this organization. If we cut this staff, we are going to have to cut out some projects. We've identified three to five projects that we feel. , take the most resources and offer the least amount of return we'd like to offer those up.
Initially for you to consider. This is the kind of conversation I think, as a CIO, , it's your job to have. This is how. You educate the organization. You make sure they understand the ramifications. Then if they choose to go wherever they're going to go, they understand what they've chosen.
And you're not bound to deliver on the same service levels you were delivering before. For a much lower cost because at the end of the day, if you could do that, you should have done it anyway. Right. If you can deliver at the same service levels you were delivering before at 10% lower costs and, , you didn't deliver that.
Before, and you could have, I'm not sure what you're doing. But at the end of the day, I think they're common issues that we are facing across the industry. And I hope you can benefit from just some of those ideas. Thanks for listening. That's all for today. If you know someone that might benefit from our channel, please forward them a note. They can subscribe on our website this week.
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