This Week Health
January 17, 2025

CIO David Colarusso on Navigating “Difficult” Paths, Being “Proven Wrong” and Keeping Innovation Alive

Appearances can be deceiving.

At first glance, healthcare appeared to be relatively stable in 2024, as operating margins showed sustained improvement and the major ratings agencies issued neutral outlooks for not-for-profit hospitals and health systems in 2025. But a deeper dive showed a different story.

According to a Kaufmann Hall report, the percentage of transactions involving a financially distressed party hit a record high in 2024. What’s more, 45 of the 72 transactions (62.5%) involved a divestiture, marking a significant spike from the previous year.

One of those organizations is Steward Health Care, which filed for bankruptcy in May and announced plans to sell off the 30 hospitals it operates nationwide. It’s not an experience any leader wants to go through; but in today’s world, it’s becoming more common.

David Colarusso

“Unfortunately, we’re not the first or the last hospital system that’s going to go through this process,” said David Colarusso, who spent nearly 12 years with Steward, including five years as CIO. During a Town Hall interview, Colarusso – who has since started a new role as CIO at HSA – spoke with Sarah Richardson about the challenges of leading through difficult times, why such a large portion of the team stayed throughout the transition, and the worst thing a CIO can do.

“Very Difficult”

Like many organizations with a high mix of Medicare and Medicaid patients, Steward was hit hard by the Covid-19 pandemic – as costs for labor and supply chain increased, reimbursement rates sank lower. “It became impossible to not run the hospitals at a breakeven,” he recalled. “We tried really hard over that time to find a way to overcome the challenges in front of us, and it was very difficult. We didn’t want to get on the road that we’ve gone down.”

However, as was the case with Community Health Systems, Ascension, and others, it was determined that divesting was the best path forward. And so, Colarusso and his team switched gears and turned their focus on care continuity, working with courts and state government agencies to find new operators for the hospitals.

“At the end of the day, we’re generally in healthcare IT because we want to feel like we have an impact on our patients,” he said. “And so, it’s difficult to transition from giving doctors the tools they need to care for our patients or giving our patients the tools they need to care for themselves, to finding a way to safely transition their care and their records to a new operator.”

If not us, then who?

It was a switch that needed to happen – not just to enable continuous care, but also to prevent disruptions in workflow. But despite the shift in priorities, his team never wavered in their pursuit of these goals.

“It speaks volumes about the staff that they still worked hard to ensure that patients and providers had access to their records,” said Colarusso. “Each one of them had to look at themselves and determine what's important to them and why they should stay.” What he found was a common thread of ‘if not us, then who,’ which further demonstrated the character of his team. “It’s important to put yourself in the place of the provider, in the place of the nurse, the place of the patient, and say, if the IT group abandoned us, what would happen? The reality is that the hospitals would shut down.”

The majority of the staff, he recalled, stayed on through the transitions because “they understood that they have a direct impact on the patient and on the provider at the frontlines,” he noted. “If they walk away, that’s just one more nail coming out of the door that’s holding everything together.”

Out of the comfort zone

The question, of course, is how leaders can build and maintain teams that embody those qualities. It starts by cultivating an environment that fosters innovation and encourages individuals to take initiative, while keeping the overall goals in mind.

A prime example came during Covid, when the lockdown threatened to derail Steward’s ambitious strategy to roll out Meditech Expanse across all acquired hospitals.

With timelines tight, the staff pushed for a remote go-live, at which Colarusso initially balked. “I’m very old school in a lot of ways,” he admitted. “I believe in face time. I believe you should be on the floors, working hand-in-hand with nurses, doctors, lab techs, pharmacists – that presence means a lot.”

But so did staying on schedule, which was made possible by leveraging virtual communication platforms – and being willing to bend.

The result? “We brought them from the start of the project to live in nine and a half months for 17 hospitals, in the middle of a pandemic,” Colarusso said. “It forced us to do things in ways we never expected. It forced me, actually, to come out of my comfort zone.”

And in fact, the team received better feedback than they had in the past, “because we had a larger group of people that could provide support,” and help was available instantaneously. “With a traditional go-live, if they couldn't find a person on the floor, they had to call the helpdesk or get back to the command center and find someone.”

What was most notable, however, was the fact that the idea came from the team. “That’s probably one of the things I'm most proud of,” he said. “They felt comfortable pushing it with me and telling me I was wrong. I’ve never been so happy to be proven wrong.”

Feeding the desire

That willingness to listen and consider different perspectives isn’t just important for leaders – it’s imperative, and will only increase as the CIO role continues to evolve. “IT is such a vast field of knowledge requirements that you can’t know everything,” Colarusso said. “My cybersecurity guys know way more than me. My network guys know way more than me. My storage and server guys know way more than me. The minute I think I know better than them is when I’m going to fail.”

Another critical aspect of the role? Being able to communicate the criticality of cybersecurity, network and server continuity to the executive suite. “That’s a skillset,” he noted, along with keeping those teams moving in the same direction “so that we can get some of the things we want to do accomplished.”

Finally, it’s imperative for leaders to check in on teams regularly and ensure they’re feeling challenged in their roles. “If they’re feeling stale, or that they’re just coming in every day and keeping the motors running, they're going to move on to something else,” he advised. “They want to be doing something cutting edge. They want to move the organization into a better direction. And if you’re not constantly feeding that desire, you’re going to lose that staff.”

On the other hand, leaders who are able to “keep that innovative spirit alive” will be able to keep good people, even during difficult times.

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