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Viewpoints from Leading Healthcare Chief Information Officers

Facts, Priorities, Salaries and Advice to Future CIOs

April 2009

4 CityPlace Drive · Suite 300 · Saint Louis, Missouri 63141 · 800-209-8143 · Fax 314-726-0026 · www.cejkasearch.com

The Chief Information Officer (CIO) in today's healthcare organization faces complex challenges and increased pressure to accomplish more with fewer resources. The implementation of an electronic medical record, ensuring patient safety and quality, and clinical transformation are just a few examples of major programs being undertaken and serve to illustrate just how important their role is to the success of their organization. At the end of 2008, Cejka Search conducted an in-depth survey to identify current trends and examine how the healthcare CIO role has evolved. CIOs were asked about relative changes in their responsibilities, salaries, staffing and hiring practices and key information technology priorities. Furthermore, they were asked to explain what barriers to success they typically experience and to provide some thoughtful recommendations and advice to guide the careers of future healthcare CIOs. The ability to adjust to rapidly changing priorities and demands is among the most important skills needed by CIOs as they face these important challenges in a deepening recession. Major electronic medical record implementation programs, if funded and underway, are moving forward, although they must accomplish much with fewer staff members, particularly with the decline in projected hiring for 2009. All this is in addition to preparing their organizations to maximize resources and achieve "meaningful use" for the American Recovery and Reimbursement Act (ARRA). The good news is that CIOs are increasingly coming from diverse, non-traditional backgrounds and bringing the skills needed to handle the ever-changing environment of healthcare information technology.

SurVey BACkgrOund

In December 2008, more than 300 CIOs were randomly contacted to participate in the survey. The participant universe reflected a diverse mixture of hospital sizes, integrated delivery systems, and geographies. The survey achieved a 25% response rate with a total of 75 CIOs representing 33 states and 378 hospitals. Respondents represented a mix of community-based hospitals, integrated delivery systems, academic medical centers, children's hospitals and rehabilitation care centers. Over 50% represented organizations with two or more hospitals, followed by 23% having five or more hospitals. One fifth (20%) of the respondents represented organizations with over 1,000 beds in their health systems.

reSPOndent demOgrAPHICS And AVerAgeS

The CIOs responding to the survey are senior executives in their hospital or integrated delivery system organizations: 62% are Vice President/CIO, Senior Vice President/CIO or Executive Vice President/CIO 35% are Chief Information Officer 3% are Director of Information Systems Advanced degrees are becoming increasingly a requirement for the CIO role. More than 77% of CIO respondents indicated that they have an advanced degree. Furthermore, demand for an advanced degree is reflected in more than 50% of the CIO respondents reporting to the Chief Executive Officer. More than half stated they have successors in place, reflecting the industry's shift in the need for succession planning among key executives.

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Average operating budgets and staff size by bed count:

Beds under 200 200­299 300­499 500-999 1,000­5,000 Average IT operating budget $4.4 million $7.8 million $15.3 million $18.2 million $38.8 million Average IT staff size 20 41 83 110 225

Organization size as reflected by number of physicians: 22% had less than 200 physicians 33% had 200-499 physicians 27% had 500-999 physicians 18% had 1,000­4,600 physicians.

WOrk exPerIenCe And tenure

The majority of respondents (41 %) are first-time CIOs, while another third (31%) have held three differing CIO positions. Nearly a quarter (23%) has had two CIO positions and only 5% have had more than three different CIO positions. Forty-one percent have been in their role for one to four years, 28% have five to seven years, 12% have eight to ten years tenure, and 12% have eleven to fourteen years. Only 4% were in their current role for one year or less, while 3% had held their CIO role for over 15 years.

How many years have you been in your current CIO position? Under 1 year 1-4 years 5-7 years 8-10 years 11-14 years Over 15 years 12% 12% 3% 28% 4% 41%

dePArtmentAL rePOrtIng LIneS

Given the expansion of technology across organizational areas, one question that comes up often is how to best structure the organization and which departments are best served by reporting into the Chief Information Officer? A majority of respondents (83%) have Telecommunications as part of their responsibility, 25% have Health Information Management, 21% have Biomedical Engineering and 5% have Ancillary areas.

do you have other departments reporting to you? Ancillary Biomed HIM Telecom Other 27% 5.3% 21.3% 25.3% 83%

More than one quarter (27%) of survey respondents indicated that they are increasingly becoming responsible for departments outside of the realm of information technology, citing such areas as supply chain and materials management, imaging and nuclear medicine, engineering, laboratory, pharmacy, clinical and nursing informatics, medical library, outpatient oncology, physician practice corporation, program office and human resources.

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InFOrmAtIOn teCHnOLOgy ACCOmPLISHmentS

The survey asked respondents to share their proudest accomplishment in information technology. Their responses clearly reflect some of the key challenges being faced today. Overall, many were most proud of their work on programs for implementation of the electronic medical record and advanced clinical systems. Below are some other frequent mentions: Developing a productive working environment among an EMR vendor, school of medicine, medical staff, nursing and administration Developing an electronic documentation system used daily by more than 135 physicians Leaving an IT department much better than when I arrived Developing a strategy for business intelligence to provide data for the continuum of care Enhancing the staff member and patient/visitor experience Implementation of a computerized physician order entry system with 97% compliance in the first three months Replacing seven systems in a "big bang" on same day Transitioning of staff to an outsource vendor with 98% retention Training and mentoring individuals who go on to become CIOs Gaining momentum with our EHR initiative on multiple fronts with strong clinical leadership Recognition as "Most Wired" for 7 out of 10 years Winning the Malcolm Baldrige Award - our staff worked for 6 years to make happen Alignment of IT with the business (entities, clinical, research, business)

CHIeF medICAL InFOrmAtIOn OFFICer

The role of Chief Medical Information Officer (CMIO) is growing in both prominence and importance among healthcare organizations. Many CMIOs have clinical informatics staff. Although most continue to practice medicine, there are increasing numbers who devote 100% of their time to executive and IT duties.

to whom does the CmIO report? CEO CMO CIO CEO & CIO CMO & CIO 6% 15% 6% 6% 61%

When asked if the CMIO role existed in their organization, 44% Other 6% of CIO respondents answered affirmatively. Of those 44% who do have a CMIO in their organization, 61% of CMIOs report to the CIO, 15% report to both the Chief Medical Officer (CMO) and CIO, 6% percent report to the Chief Executive Officer (CEO) and 6% report to the CMO and Vice President of Medical Affairs (VPMA).

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BASe SALArIeS And BOnuSeS

The average healthcare CIO salary has been increasing over the last five years, whereas the talent pool of CIOs is growing slowly. Key leaders in the industry have taken on more department responsibility outside of IT, increased staff, and gained specialized skills in implementing EMR vendor systems. The 75 CIOs who participated in the survey had an average of $204,539 base salary with a high salary of $379,000 and a low salary of $99,500. CIOs who work at organizations with two or more hospitals in their health systems averaged $230,316 and those with three or more hospitals averaged $236,400.

OVerALL CIO AVerAge BASe SALAry FOr ALL regIOnS: $204,539

$ $

188,150

215,625

$ $ $

178,400

$

177,925

256,667

174,428

$

208,318

$

207,172

$

195,000

Bonus awards ranged as follows: 45% receive bonuses from 1% to 15%, 34% receive bonuses of 10% to 25% and 21% of respondents mentioned over 30% bonus potential. Other perquisites commonly included auto allowances, tuition allowances, executive-level perquisites, SERP and stock options.

tOP teCHnOLOgy PrIOrItIeS FOr 2009

Top information technology priorities for 2009 included: 79% Quality, patient safety and process improvement 77% EMR/CPOE initiatives 45% Clinical transformation 27% Budget cuts 31% Increasing ROI Other priorities included: community wide information sharing, improved revenue cycle systems, ERP, infrastructure build-out, physician office integration and telemedicine.

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reCruItment

CIOs continued to hire more leaders for their teams in 2008, seemingly due to programs for electronic medical record implementation. CIOs reported hiring clinical information technology or clinical informatics leaders most often. In 2008, 58% of CIOs hired clinical informatics leaders for their department, 34% hired project managers, 32% hired technical leaders, 16% hired customer/client leaders, 14% added financial application leaders, and 13% hired ambulatory, operations and security leaders, and 8% hired medical informatics leaders. Although CIO respondents indicated that their projected hiring activity for 2009 was down from 2008, many planned to hire in these areas: 54% plan to hire clinical IT and clinical and medical informatics 26% plan to hire project managers 14% plan to hire ambulatory and technical leaders for their organization Other positions planned are financial application leaders and IT security

BArrIerS tO CIO SuCCeSS

CIOs are faced with tremendous barriers and challenges to be successful in their roles. Respondents openly shared some specific barriers: Politics, lack of involvement in strategic planning, ROI demonstration Vendor's products not performing as designed or staying on development plan, product delivery and expectations not met Reporting to an executive that is not pro-information technology Funding and organizational change; hospital and industry financial constraint; not enough staff to do all the work Volume of initiatives, original state of infrastructure, culture of conflict avoidance Lack of federal standards and related market/vendor barriers Effectuating change, workflow and process, getting users to take ownership of systems Reticence of CEO, COO, CFO, etc. to set up an effective governance structure for IT that includes board participation; along with a lack of willingness to make a plan for IT and stay focused Not having clinical engineering reporting to IT Funding and organizational change Limited technical and contracting knowledge as a physician Keeping organization on track with implementations during a time of shifting payer mix and declining reimbursements

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Getting physician champions to get behind clinical IT initiatives without paying them User expectations and reality too far apart Medical staff reluctance to move to EMR and CPOE

reCOmmendAtIOnS And AdVICe

Respondents shared key recommendations and advice for how to success in the role of a healthcare CIO: Devote yourself to continuous learning, education of your constituents and development of your staff; technical issues are the least of your worries Get into clinical work; understand what it takes physicians and nurses to do the work that they do Think like a doctor; think like a nurse Listen more than you talk; when you think you understand it all, reconsider ­ you don't Remember you are a support service Align IT with the business every step of the way; deliver people-ready solutions with perceptable value Relationship development/management and proactive communication Establish IT governance Involve others (your team, peers, customers) in the creation of your vision of IT Demonstrate a collaborative spirit Align with the other senior leadership, position IT as a strategic asset Don't take yourself too seriously, make work enjoyable, have fun Build a strong network of CIO colleagues and benefit from their experiences Stay well rounded--technology, healthcare and business knowledge Have a mentor, be a mentor Learn about the workflow of the whole organization Make sure that you have clinicians with dedicated involvement It's not about technology, it's about patient care Never go to lunch alone!

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reFLeCtIOnS And ImPreSSIOnS

Results from the survey illustrate that the healthcare CIO role is strong. The good news is that a majority of the CIO respondents have advanced degrees, more of them are reporting to CEOs and they have hired successors. CIOs add new areas of responsibilities to their overall operational management outside of IT with health information management and biomedical engineering as the two leading areas. Quality, patient safety and process improvement have moved to the top of the IT priority list, followed closely by Electronic Medical Record/Computerized Physician Order Entry (EMR/CPOE) initiatives. Although projected hiring activity is down from 2008, many CIOs plan to continue hiring clinical IT leaders and other key leadership positions. The CIOs are most proud of their EMR and clinical system implementation accomplishments. The barriers to success most often mentioned by the CIOs included lack of money, staff, and resources, fear of change, and the lack of involvement by their executive and physician counterparts. However, the CIOs who responded to the survey were very open to sharing their advice and recommendations to future CIOs to help counter any barriers on the road to CIO success.

ABOut tHe AutHOr And COntACt InFOrmAtIOn

Bonnie Siegel, FHIMSS, has almost 30 years of healthcare information technology experience in market research, consulting and recruiting. As a retained executive recruiter, she specializes in the recruitment of CIOs, VPs, Deputy CIOs and clinical informatics and clinical IT leadership professionals for major health systems, hospitals and medical groups throughout the country. Cejka Search is a nationally-recognized healthcare executive and physician search firm providing services exclusively to the healthcare industry for over 25 years. For more information, contact Michael Dunford, Managing Principal of Cejka Search's Executive Search division, at [email protected] or 800-209-8143.

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