Q&A: How to Pitch a $270M Project

By Baselinemag  |  Posted 2006-05-02 Print this article Print

Bert Reese, CIO of Sentara Healthcare, had to convince his board of directors that a 10-year project overhauling the company's clinical information systems was worth the price tag.

Bert Reese, 58, is chief information officer of Sentara Healthcare, which operates seven hospitals in southeastern Virginia and northeastern North Carolina. Sentara, which had $2.2 billion in revenue in 2005, in January began rolling out Epic Systems' clinical information system. The project is expected to cost $270 million in hardware, software and operating expenses over 10 years. Reese spoke recently with Senior Editor Todd Spangler.

Baseline: That's a big price tag.

Reese: Yeah. It's the most expensive I.T. project we've ever undertaken.

Baseline: How did you get it off the ground?

Reese: In late 2003, our COO, Howard Kern, asked that we come up with a strategy for improving physician order entry. We said, "Wouldn't it be better if we had one repository for all the clinical information that everybody uses?" We had to get philosophical buy-in for that.

Baseline: Was the project a tough sell?

Reese: Let me put it this way: We just built a heart hospital for $94.5 million. This project is almost three times the cost of a bricks-and-mortar facility. So it took some degree of convincing [Sentara's board of directors]. Where everybody got a little crazy was around the costs.

Baseline: How did you win them over?

Reese: It's the system's potential benefits—$37 million per year in cost savings or increased revenue capture. But you don't get your savings until about year three.

Baseline: Where does that come from?

Reese: Mainly from streamlining the communications within a hospital. Take the issue of doctors' handwriting. With more accurate ordering the first time, you don't have the rework of calling the physician to find out what he wrote. There are all these little subtle areas for improving how information handoffs occur that add up.


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