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Today on Town Hall

I think that merger and acquisition, it starts with the strategy and the ideas and the exuberance of what can be, and it, Then runs into people, culture, and IT

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. Our town hall show is designed to bring insights from practitioners and leaders. on the front lines of healthcare.

Today's episode is sponsored by Meditech and Doctor First .

Alright, let's jump right into today's episode.

Hello, I'm Sue Shade, Principal at Starbridge Advisors and one of the hosts for the Town Hall Show on This Week Health. And today, my guest is John Konegi. He's the SVP and Chief Information and Administrative Officer at Legacy Health in Portland, Oregon. John has been in this role since 2012 after serving as CIO in a number of other organizations.

And in recent years, he went back to school to get his law degree, which To me is a new twist for a CIO. We'll talk about that. I've known John for many years and I'm really looking forward to talking with him today, catching up and hearing what he and his team at Legacy have been focusing on. So welcome, John.

Thank you so much. It's been a while. It's been a while. Too long. Way too long. So, let's start by having you briefly introduce yourself to our listeners and tell us about Legacy Health. Well, my mom would be proud of the introduction you did already. But yeah, I have been here. Okay, Mom.

Shout

out to Mom.

Yes, I've been here 12 years. Isn't that four life expectancies of a CIO? But I just celebrated 37 years in healthcare IT. And I've had the privilege of working for four different companies. different organizations in different roles, but started out in the VA system, and then I came to academic Oregon Health and Science University here in Portland, and then Roman Catholic with Providence Health and Services, and I've been at Community Health, which is Legacy, eight hospitals in the Portland area, Portland and Southwest Washington, and been here since 2012, about six months after their go live of Epic Enterprise, so.

been here and doing that. And yes, I was a juror at a trial here in Portland and the judge came into the jury box after we found the person not guilty, talked a little bit about the law and the following Monday, I went down to Lewis and Clark and found out that they have an evening part time law program and I started it and passed the bar in 2021.

Wow. Because we're not busy. CIOs are not busy. I had all that spare time as a healthcare CIO.

The last time I talked to you, John, might have been when you were in school or just finishing and, let's start there. Let's start there. Why did you do it? And you have a lot of degrees, so maybe you love to be a student.

But yeah, why did you decide to do that besides the judge talking to the jurors? And are you using it as a CIO?

I think in eCIO, a lot of what we do, obviously, particularly in healthcare, where we're not coding our own, we're not doing our own development, we rely on vendors. We are doing contracts, we're doing negotiations we are, highly influenced by regulatory standards, whether it's HIPAA or information blocking.

I mean, we are IRIS. Around, we are touched by the law in our role as CIOs in healthcare in, in all the way. I mean, I remember looking at the EPIC contract, which truly was a two inch binder or even small, smaller, Microsoft enterprise agreement, and, you know, I would just go through the indemnification, you know, where are we going to start?

I would just pass through it. So now I look at those pages a little bit more, or at least I have a context for understanding them. So, I do think I've, I started out as an engineer, engineering undergraduate, and I think there's a lot of engineering of law of words and structures and concepts that law is.

Law seems very structured. which feeds my engineering mind. And so, it was interesting. You introduced me as the chief information and administrative officer. So as I was completing law school, my role did change. So I have both CAO type responsibilities and CIO. So corporate compliance reports to me.

So that's where I'm spending a lot of my time. legal work is in corporate compliance. I am not Legacy's Chief Compliance Officer, but that person reports to me and to our CEO. And then I have environment of care, which is facilities, environmental management security emergency management, so facilities operations.

So I, I have not only IT, but a 240 person security force that is. Keeping our patients and staff safe.

Wow. Wow. So, in having that expanded role, did getting your law degree have, was that a factor? I think it would not

have served as the, yeah, absolutely. Certainly with the compliance and I'm certified in healthcare compliance, so that's, it's obviously a lot about regulation and the law, so.

Yeah. Okay. Are you having fun? But

it helps,

it helps even in IT, it helps in our work. Yeah.

Yeah. So, are you having fun doing all that? New stuff. I am. I am. I am. Good. Well, we started before we started recording, talking about how enthusiastic and happy you always are. So Love it, . You're so nice. So, I mean, Ooh, the law.

Yeah. I pass over the indemnification stuff too. I know someone you know who can read it and. It makes sense of it. Okay, I'm going to switch now. I'll

only charge 500 an hour if you want me to do that for you, by the way. So,

okay, good to know. Good to know. I'll tell my partner that,

you know,

so,

well, I was going to ask you on this whole idea of, getting your law degree, any advice for CIOs who might be thinking about going back for an advanced degree, because they're not busy enough.

Yeah. Any advice?

Yeah. I mean,

I think,

I think I am the product of two educators. So my mom and dad were both

middle school educators and instilled in me that lifelong interest. I think I'm done. So every decade I have gone back to school. I love learning. So if you've ever done StrengthsFinders, my number one StrengthsFinder is Learner. And so it's, it, I don't think our job as CIOs is ever boring, but there is a point at which it gets more of Implement what you have discovered and strategize and decided.

So it gets more routine. And just intellectually, I need something new, and so it has been historically like, oh, let me pursue education after hours or a different job. So as I moved from, Providence to here, it was after a PhD and I had finished that. And so I decided to come here.

I am a big. Proponent of education, particularly CIOs who've come up a a a technical rank, come up through the, through technology that we have a lot that are clinicians and the ability to, go for a MBA or a Master's of Health Administration and have that exposure. I think the thing,

you know,

you learn the content, but you also learn, beyond your bachelor's degree.

Advanced degrees are really around learning from each other and being thrown into a class, sort of a a subject matter. But, when I did my MHA, I had a public affairs person from Kaiser and a finance person from Sutter, and I learned as much from them. Yeah, around issues.

And so I'm, certainly a big proponent in continuous learning. And I think, expands your horizon.

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Great. Love it. I'm going to pivot us and move away from the education just to, legacy your team what are your current priorities? What are you guys focusing on here in 2024?

So we're going to go into some of the, other things that are weighing heavily on my mind, but probably the biggest one that the team is focused on is we are 45 days from going live on an upgraded ERP, a replacement ERP. So we have been on Infor, or formerly Lawson,

for

over 20 years.

So we went live in 2003 and we are moving to Infor's next generation. And platform which was hot and heavy working on, and we were actually doing a competitive RFP in February of 2020. Don't know if you remember that date.

I do. We all do.

We stopped everything.

Yeah.

For believing and knowing that capital would be highly constricted, and we're just we're upgrading what we currently have, but 45 days out.

All the change management and, we're taking the opportunity to completely revamp our chart of accounts and all sorts of other things, implementing global HR, which we didn't have on. And so it's the huge change management, a lot of IT but, it's at least what I love is that our leaders are saying, this is the epic.

for the back office function. Now, if the product was the epic of the back office function, that'd be great. But there's a reason why ERPs are called trans industry CIO killers.

Okay, well, that's not going to happen to you. Is it going well? It

will not. It will not. It's going. I mean, it's, all the go live preparations and and that it's, it will not be perfect from the beginning and we will all remember all the trials and tribulations and everyone will forget the go live,

you know,

hiccups, which just happens.

Yeah, they do. They do. Absolutely. So that's one of the big ones. when I reached out To give you some prep for talking, you mentioned two big issues you're dealing with. One is the financial containment, given the health economics and the need to reduce costs the board.

I'm hearing this from many CIOs that I talk to, so you're not alone there. So, what are your specific challenges and how are you handling them?

I think everybody is facing this. Clearly, this is an issue in healthcare across the board. The fundamentals of what happened in COVID and came out changed.

Some changed very dramatically. So the competition, you know, people leaving, the industry, nurses deciding, Hey, I'm not going to do this anymore. Physicians others. So, so, scarcer resources make them more expensive. So, the cost structure and then the supply chain, the global supply chain is not the same and it hasn't really recovered.

So, the headwinds of the cost of health care. Now, for a few years, we had federal government, there was bailout money for COVID. And then that went away because everyone else is like tired of hearing COVID and they've moved on. But we still have sort of like, You didn't change Medicare payments or Medicaid payments.

And so the whole industry is facing these incredible headwinds where costs, you know, the, the revenue is not offsetting anywhere near adequately our costs. We've looked at, healthcare, financial, issues across the country. Pacific Northwest is lagging and it's like, it's worse in the Pacific Northwest.

Worse in what way? Worse in terms of the gap of negative margins in healthcare. And then you take even more narrow to legacy health. We have a disproportionate share of Medicaid and uncompensated care for where our hospitals are located. We also consider it very core to our mission. So we have Kaiser and an academic medical center and a Roman Catholic health system that are in.

Main competitors, but so we are like the poor of the poor in the poor. So it's really extreme.

So, you mentioned Legacy has signed a definitive agreement to become a part of Oregon Health and Science University, which I know you were at before.

So that's across town, across the town Academic Medical Center. So tell us what you can about that without breaking any confidence. And what are some of the impacts on your staff and strategies?

Yeah, it's a great question. And I think just like financial containment and the financial issues facing our industry, we're also doing a huge, the industry at large is doing a lot of merger and acquisition. And I think that merger and acquisition, it starts with the strategy and the ideas and the exuberance of what can be, and it, Then runs into people, culture, and IT,

you

know,

again, regardless of industry,

you know,

IT

can,

can actually be a huge disabler of integrations.

So can culture, so a community health system and an academic have very different, cultures. We are, as you just mentioned in the introductory question, we have signed a definitive agreement. We have not yet started the integration planning. So we're in that awkward time, which adults don't like unknown.

Yeah.

So we haven't started talking about, well, who's Epic will we be on and how are we going to do is what is the expectation of our customers for integration? And so we're a little bit in a holding pattern and I am not picking up the phone and talking to my friend and successor at OHSU because of all the regulatory.

Requirements, maybe using my law degree there too. No, I even do that,

yeah.

We can't start saying, Oh, how are we going to work together to compete with others? No, you can't do it until you get regulatory approval. So that, unknown is scaring people. My fear is that people would leave Legacy.

We, and

we,

will become an element of OHSU. And so, Legacy Health will. not exist as it does today. And so that's scary. So I think as a leader to create safety and awareness and transparency of what we know and what we don't know

I'm saying, your questions and your concerns are legitimate. I just don't have an answer to yet.

And,

And it's not like we have the answer and I just don't want to tell you, we actually can't. Legally start putting these things together until we are further along, but They have a very significant IT department, larger than ours.

And so that's just, and I think our listeners have either know of, or participate in, there's so much merger and acquisition going on in healthcare that it's an element of.

You know,

It's a huge element of in a CIO's career in the next 10 years. I guarantee you we'll all be a part of it one way or another.

And I have in the last 10 years.

Yeah. Yeah, you're right. And the uncertainty that staff feel and the nervousness that they have over that, I mean, that's part of your job as CIO is to just reassure them in, I always tell people, be open to the possibilities. Yeah. Right. I mean, we don't know what's gonna change.

Exactly. Change but be open. Be open to the possibilities.

So one thing I would say one thing that the leaders, so the vice presidents over apps and tech, we really. changed a little bit of the conversation to your employability and not your employment. So, so we are continuing to invest in training.

Like we didn't stop. We're talking about,

you know,

tell your story. Why would OHSU,

you know,

OHSU would be stupid not to keep you, the other thing is, They're going to grow. We're going to double. The combination is double the size. So we're not like a single community hospital that they can absorb.

. So I want to ask you one more question before we need to kind of close here. Any areas in terms of technology that you and your team are pushing the envelope on these days that you're excited about or looking ahead to?

it would be malpractice for me not to mention. Oh, not malpractice. CIO, you know. we are implementing Dragon DAX ambient experience. We're a community health system, with limited budget we're paying attention to what organizations like Stanford are doing in the space.

It's not practical to be an absolute leader, bleeding edge in the space, but I do think that whether it's, assisting the community. Call trees as people call documentation, they're just there's a lot that I think AI will influence.

It's in its early stages. Early infancy, and so, like the cars, we're going to have dead horses on the road when a car goes awry. That's probably not a really great analogy, but we're in the beginning of it.

Is there anything else that you want to highlight before we close today?

I'm excited. I'm proud of what we do. I think that it's 2024. Healthcare means so much. Healthcare IT is so critical to the business and the partnerships that we have with operations with each other. It really makes a difference. I think the value of relying on others.

Sue, you and I have known each other for a long time, and even when we would see each other at conferences, that ability to network and connect not only within your site with the business, but then others who are doing this business makes me joyful, I think that it's an important, job that we do.

Oh, absolutely. And much to be joyful about. Well, John, thank you so much. I know you had a lot to offer here, so thank you so much.

You're very welcome.   📍 📍 📍

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