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The Demand Side: Aligning Organizational Incentives

Posted Mar 09 2013 9:55am
In a thoughtful posting on March 6, 2013 , John Halamka presents five organizational priorities for the coming year. His fifth priority - managing employee stress -  is often underemphasized but is critical. Incentives on the demand side may help.

5. Managing levels of employee stress - implementing Meaningful Use Stage 2, ICD10, Accountable Care, Compliance requirements, and keeping the operational trains running  day to day puts enormous stress on staff at all levels.   Balancing the scope of projects, the resources required, and the timing which keeps staff excited but not overwhelmed requires continuous course correction.  

All too often, organizations focus their incentive structures on those responsible for service supply without engaging those who are responsible for service demand. For organizational health information technology service providers, stress is often the result of an ongoing stream of small requests or projects from multiple users that, summed up, take a lot of time. Information-intensive industries continually barrage their IT teams with small requests for new reports, new features, and new functions. From the perspective of those asking, the requests are small ones. Those making requests don't see the overall impact. A hundred "small" requests often lead to a cumulative degree of effort equivalent to a mid-sized project. Yet these requests are often "off the books" and hence, this cumulative work isn't recognized for its true cost.

I learned a valuable approach over a decade ago when I was CMO at Express Scripts . At the time, a significant portion of our bonus structure was based on no more than three organization-wide metrics. As Express Scripts acquired other pharmacy benefits management companies and more different IT systems, we faced an enormous cost when trying to support customers and manage multiple IT platforms and services. As a result, Express Scripts' made IT systems integration a key incentive metric for the bonus structure of everyone.

When asked about this at a company meeting, our legendary founder and CEO explained that everyone asked IT for little favors or for small projects not included in the annual IT plan. Our CEO simply said that we could continue to exhibit this behavior if we thought it important. At the same time, he emphasized that if the cumulative impact of these requests prevented IT from reaching our system consolidation goals, our compensation would be dramatically reduced.

The change in behavior was dramatic and instantaneous. Because everyone suddenly thought of IT as part of our broader system and all began to see the cumulative impact of innumerable tiny "asks," the number of requests made of our IT department seemed to drop dramatically. Groups were also affected. In meetings, employees challenged one another asking "do we really need this report? Do we really have to take IT's time to get the answers we need?"

I would imagine that in some organizations, MU should not be a global organizational goal - there are so many more pressing priorities. But for those organizations who have a management strata that creates demand for information technology services, incorporating core MU metrics seems to make sense.


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