To Far Ahead of the It Curve

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HBR CASE STUDY

Too Far Ahead of the IT Curve?
Peachtree Healthcare’s patchwork IT infrastructure is in critical condition. Should the CEO approve a shift to risky new technology or go with the time-tested monolithic system?

by John P. Glaser

F
Daniel Vasconcellos

after their squash game, Max Berndt drank iced tea with his board chairman, Paul Lefler. Max, a thoracic surgeon by training, was the CEO of Peachtree Healthcare. He’d occupied the post for nearly 12 years. In that time the company had grown – mainly by mergers – from a single teaching hospital into a regional network of 11 large and midsize institutions, supported by ancillary clinics, physician practices, trauma centers, rehabilitation facilities, and nursing homes. Together, these entities had nearly 4,000 employed and affiliated physicians, who annually treated a million patients from throughout Georgia and beyond. The patients ranged in age from newborn to nonagenarian; represented all races, ethnicities, lifestyles, and economic conditions; and manifested every imaginable injury and disease. Many of them, over the course of a year, would be seen at more than one Peachtree Healthcare facility. Max’s marching orders were to ensure quality, consistency, and continuity of care across the entire network – and to RESHLY SHOWERED AND COOLING DOWN

HBR’s cases, which are fictional, present common managerial dilemmas and offer concrete solutions from experts.

hbr.org

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July–August 2007

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Harvard Business Review 29

MANAGING FOR THE LONG TERM

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HBR CASE STUDY

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Too Far Ahead of the IT Curve?

deliver all that with the highest levels of efficacy, economy, and respect for patients and staff. Max, still sweating lightly, finished his tea and ordered more. He and Paul commiserated over the steady vanishing of squash courts in the metro Atlanta area. This particular block of four courts was located in a health club not far from Peachtree’s Marietta headquarters. Apart from the one Max and Paul had used, the other three were dark. “By next week,” Paul predicted, “at least one of those courts is gone.” In Paul Lefler’s worldview, things always happened fast. Paul was the CEO

achieve them. Paul – like other board members and some in Max’s management inner circle – was applying constant pressure on Max to follow the example of others in the health care industry: Push ahead on standards and on the systems and processes to support them. “You’ve got all the hospitals doing things differently. You’ve got incompatible technology that’s held together by sweat and ingenuity and, possibly, prayer. Just do what other institutions are doing. Common systems, broad standardization… It’s the competitive reality, and it’s the right long-term play! So, what the hell are you waiting for?” But then the iced tea

ized practices could have scary patientsafety consequences, and physicians had to be free to form their own judgments about which treatments were best for which patients. Lately, however, worrisome developments were eroding Max’s confidence that he could hold out against Paul’s brute-force prescription.

Remember The African Queen?
Days before, there had been a meltdown of the clinical information system at Wallis Memorial Hospital in Decatur. (Wallis was Peachtree’s most recent addition.) Since Max had been lunching with his chief information officer, Candace Markovich, when the alarm came through to her PDA, he drove her over to Wallis to investigate. On the way, Candace reprised her concerns about ensuring uptime and performance quality across Peachtree’s patchwork infrastructure. “More and more, I feel like Humphrey Bogart in The African Queen, trying to keep the blasted engine running on the boat,” she said. “So much of our energy and budget goes into just treading water. And the more we grow, the worse it gets.” At Wallis, Max saw cold panic on the faces of the IT staff as they rushed around trying to repair and reboot the system....
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