Safe Driver Discounts for Technology

Automobile insurers have long seen the sense of giving drivers an incentive, in the form of safe-driver discounts, to avoid taking risks when they’re behind the wheel. In health care, more and more payers are rewarding doctors for the quality of care they deliver and not the quantity. Aligning incentives with outcomes makes good sense.

Vendors of technology should follow those examples and revise their pricing models for yearly hardware and software maintenance contracts. If they rewarded customers who adhere to best practices, they would essentially pay customers for their performance.

As a CIO of multiple companies, I have to sign off on a lot of maintenance contracts every year. These contracts have a list price, and there’s usually a discount that the manufacturer passes along to the value-added reseller (VAR). The VAR decides how much of the discount to pass along to customers. No extra consideration is given to customers who abide by the vendor's best practices for the implementation and management of its products.

But why not? Why not give technology buyers the equivalent of a safe-driver discount? If customers were given incentives to hire highly competent internal staff, follow all the vendor-recommended configurations and install all the latest upgrades, life would be better for both the vendor and the customer. The vendor would receive fewer support calls and requests for emergency priority service. The customer would get higher reliability, better performance and lower maintenance costs.

Five years ago this month, we experienced a devastating network outage that led me to change a lot of our practices. Before the outage, my only incentive to adopt best practices was fear of downtime. The cost of support was certainly not a factor. We could make hundreds of support calls and send out an SOS during numerous high-priority emergencies, and the cost would be the same as it would be with a spotless performance record. The outage led me to replace much of our infrastructure, enhance my support team and ensure that our engineering practices are world class. We now place an extremely low burden on our vendors, but our maintenance discounts for all the technology we operate today don’t reflect that.

Here’s my idea. Vendors would give each customer a yearly technology safety rating, starting at, say, 100 points. If you miss an upgrade, 10 points would be deducted. Deviate significantly from a recommended configuration and you lose another 10 points. Make a support call that’s due to your lack of appropriate IT staffing and more points are taken away.

Discounts would no longer be arbitrary. Instead, they would be a direct function of the yearly safety rating. The harder a customer worked to avoid calls for help, the less the maintenance would cost. The best customer of the year could even be rewarded with completely free maintenance.

Of course, there are potential problems. Vendors could abuse the system by defining best practices as the elimination of all competing products, or they could take away points if customers didn’t buy all the optional add-on software they recommend. But such tactics would defeat the spirit of this proposal. Any vendor that adopted them could expect a good deal of pushback from customers; hopefully, they would see that such transparently cynical ploys have no real value.

So let me publicly ask my good friends at Cisco, EMC, Dell, HP and IBM, What do you think? You'll find that my driving record is exemplary.

RBRVS-For Primary Care No Good Work Goes Unpunished

The results are in - Medical Residents are not choosing to enter the Generalist fields of medicine in the United States. With current trends, less than 10% of those training in Internal Medicine will work as general internists. Compare this with JAMAs report that all European countries have a broad Generalist foundation comprising 70-80% of practicing physicians. The consequences of our

Answer to Medical Quiz

The answer is # 5:Black hairy tongue (lingua villosa nigra) may be associated with the presence of chromogenic organisms (e.g., C. albicans) and the use of certain medications (e.g., doxycycline and bismuth). The pathophysiology is thought to be due to proliferation of the filiform papillae of the tongue, which stain black with porphyrin-producing chromogenic bacteria or yeast.I take exception to

Cool Technology of the Week

Have you ever wanted to record MP3's of voice or a musical instrument? Since the iPod does not do this, the easy way to record sound is to buy a portable MP3 recorder such as the Edirol R-09, M-Audio MicroTrack or Zoom H2.

However, then you're stuck with yet another gadget that does only one thing. Why not use your existing laptop for this purpose?

I tried it and the sound quality was so bad, that I was ready to give up. My audiophile friends explained that typical microphones really need a pre-amp before plugging them into a laptop. However, I did not want to spend the money on a high quality microphone plus pre-amp.

I discovered an entirely different technology that worked perfectly - USB Microphones. These devices include a high quality analog microphone, a pre-amp and an analog to digital converter. They plug directly into a USB port and do not use the audio components of your computer at all! Here's an overview of the technology and the leading products

I purchased a Blue Snowball Microphone for $100 and was amazed by its quality. I used the Snowball with my Mac using Garage Band, my Ubuntu Linux laptop using Audacity and a Windows XP laptop using Sound Recorder. Here's a sample of my Shakuhachi Japanese Flute recorded with the Snowball.

The Blue Snowball USB Microphone - truly a Cool Technology

In my Cool Technology of the Week entry two weeks ago, I discussed the Orb. This week, our Orbs went live. Per this picture, we've placed an Orb on the CEO's desk and linked it to our Emergency Department waiting room volume metrics.

The Orb supports 35 different colors and glows Blue if no patients are waiting, Greens for 1 to 5, Yellows for 6 to 10, Reds for 11 to 20 and Flashing Red for over 20. We were able to create this fully automated "glance-able" interface in one day by simply repurposing existing Service Orientated Architecture (SOA) tools already deployed in our clinical systems. If it is successful in the CEOs office, we'll add additional Orbs and a menu of performance metrics to track.

Medical Quiz - How Smart Are you?

Which condition could cause this type of finding in the mouth? (Click on illustration to get a close up view ). Answer will be posted tomorrow.

Grand Rounds

This weeks "Grand Rounds" of medical blogs is being hosted by Prudence, MD. I'm happy to report she found EverythingHealth worth a mention in her review of the weeks best blogs. Check her out for great blogging links

The Cost of Information Technology

I'm often asked how about my budgets for hospital information systems. In the interest of transparency here it is, in narrative and spreadsheet form.

Typically, Academic Health Centers spend about 2.5% of their operating budget on Information Technology. Our budget is between 1.8-3.1% depending on what you include. Overall, we receive $37.1 million out of BIDMC's $1,195 milllion dollar budget (3.1%) but we provide services for many non-BIDMC entities which are charged back. We also provide Media Services/Telemedicine, Library Services, Telecommunications and Health Information management services (medical records). If you remove these items to create an apples to apples comparison with other academic health centers, the percentage drops to 1.8%. These percentages are mixed blessing. Although it's laudable we can do so much with under 2% of the operating budget, there are clearly opportunities to enhance operations via additional IT expenditures.

The narrative is a breakdown of direct and indirect IS costs. Important to note - it includes fringe benefits, leased space costs and utilities, and capital depreciation on IS related items. It also includes the cost of services provided to non-BIDMC sites who we charge for our service. The grand total is $59m; much higher than our net operating budget. To properly represent the cost of an application such as Peoplesoft or Email, you really need to include these expenses. At the bottom of the table, I show the revenue recovered from other entities and address some of the typical questions often asked about operating and capital comparisons.

The spreadsheet shows the IS expense for FY08 for each of our cost centers. This includes a breakdown of fringe, space/utilities, and depreciation. We depreciate everything on a 5 year basis for purposes of the allocation.

This year's $169.4m BIDMC capital includes $57.8m for our new Center for Life Sciences Research building and $23m for backfilling vacated space as researchers move into the new building. The $15.4m IS capital budget also includes $3.4m for the Center for Life Sciences build out of telecom and network services. If you remove these for both BIDMC and IS, we are 13.5% of the total. The remainder is $8.5m for infrastructure, $.5m for Peoplesoft, and $3m for Disaster Recovery.

The most difficult variable to express when comparing institutions is the quality of information systems. Quality for IS comes through reliability, fast transaction speeds, application breadth and depth, and customer satisfaction. At present, I believe that the capital and operating budgets I've provided here will result in more than 99.9% reliability, under 2 second transactions speeds in all applications, reasonable progress on our effort to be 85% electronic in all our care areas, and high customer satisfaction. As I often say, providing Information Systems is a continuous journey, so we will continue to seek additional budgets to support ever evolving user requirements.