Interview with HCI CEO Ricky Caplin: Tough Times Call for Bold Leadership from CIOs

9.27.2018
Candace Stuart – Director, Communications & Public Relations

 

In an era of thin margins, consolidations and ever-growing complexity and challenges, what can senior healthcare IT executives do to ensure the long-term success of their health organizations? Be bold, advises Ricky Caplin, CEO of The HCI Group.

Operating margins dropped to 2.7 percent in nonprofit hospitals in 2016, according the credit rating firm Moody’s Investor Service, the result of higher expenses and slower revenue growth across the industry. Under those circumstances, health systems might hunker down, freeze or trim budgets and make do with existing resources. That short-term solution might acerbate the problem in the long run, though.

“A lot of hospital CEOs get caught in managing the business and dealing with the day-to-day storms vs. looking 10 years in advance and making long-term decisions,” Caplin observed. Health IT departments caught in this cycle may look for quick fixes that don’t align with the larger system or meet future needs.

As the experts in healthcare IT and the potential benefits it can bring, CIOs and senior healthcare IT executives are positioned to help their executive teams become proactive rather than reactive. They can provide a strategic vision that leverages the opportunities using healthcare IT. Caplin recommends that IT leaders start by creating a digital charter and strategic roadmap, if they don’t have them already. These documents will articulate the long-term strategic vision for the organization and include the digital opportunities, anticipated advancements, challenges and risks.

Some CIOs are looking at managed services and Cloud-based solutions as opportunities to lighten burdens and save money. They also are reviewing and renegotiating contracts to lower costs. These strategies may give them more time and resources to focus on their long-term strategy and digital charter.

Based on his interactions with health systems globally, Caplin notes that those cutting-edge organizations that invest the most in technology and leverage technology the most also are posting margins up to 10 percent. It is not simply having more money to spend but spending strategically based on their digital charter, road map and long-term vision. “I believe those organizations are leveraging technology in a way that is a differentiator and it is allowing them to maintain their margins,” he said.

CIO and senior healthcare IT executives can steer their organizations in the direction of their high-performing peers by demonstrating a bold vision to the CFO and CEO. The specifics depend on the organization, its needs and the opportunities that meet the strategic vision.

Caplin describes the conversation this way: “’I will add $10 million in upfront savings and I want to keep that money and invest it in these (technologies) which will provide strategic benefits to our organization. It is actually not going to cost you anything.’ You will look strategic and build a lot of capital with your leadership team.

“That is bold leadership. Instead of just running things, you are changing things.”

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