HIStalk Quotes
Kaiser CEO E-mail Response and CIO Resignation Announcement
Sorry for the quick folllow-up, but information is swirling. Below is (a) the announcement of Cliff Dodd's resignation from Kaiser CEO George Halverson; and (b) his response to Justen Deal's e-mail, which he sent this afternoon. Disgruntled Diva, who you may remember having found herself on the wrong end of Kaiser's wrath awhile back for mentioning that they were posting internal information on unsecured servers, has her take on the situation as well.
Cliff Dodd Resignation Memo from George Halvorson
Today, I have accepted the resignation of Cliff Dodd, Senior Vice President and Chief Information Officer for Kaiser Foundation Health Plan/Hospitals. Cliff has made numerous contributions to Kaiser Permanente since he joined our Program in January 2002. He was instrumental in putting together a functional IT project governance process, building a team of highly skilled professionals, and executing on hundreds of IT projects across the Program. He and Louise Liang, MD, Senior Vice President Quality and Clinical Systems Support, and Bruce Turkstra, Vice President and Program Director of KP HealthConnect™, and their teams have been responsible for implementing KP Health Connect the largest civilian automated medical record system in the country.
I will begin recruiting for a new Chief Information Officer immediately. I have appointed Bruce Turkstra as interim KP-IT CIO. Bruce will have full authority to act in this role while we conduct a search. His prior experience as the Chief Technology Officer for Merrill Lynch and Chief Information Officer of Anderson Worldwide and PricewaterhouseCoopers will serve us well as we continue the critical work in our technology organization. Please give him your full support.
Bruce’s current role for KP HealthConnect will be divided in two key areas: the IT and business functions. The KP HealthConnect Business Area Partner role for IT will continue to be led by Robert Goldstein who will report jointly to Dr. Liang and Bruce in his new role. The business leadership role will be defined and a process to identify the appropriate person will be completed in 30 to 45 days.
Our IT agenda is critically important to our future success as a leader in the American health care system. We need our systems capability and infrastructure to perform at levels that will let us compete successfully with health care providers, health care systems and mega health plans that are investing heavily in their own systems capabilities.
To implement our strategy, we must execute our IT projects and operate our IT systems efficiently and with an extraordinary level of reliability. We need to leverage our investments and resources by implementing and operating consistently across regions and functions whenever possible. We need to coordinate, collaborate and share information across functions and across the Program. This collaboration will allow us to implement consistently and effectively and realize the benefits of our investment.
The thousands of individuals in our IT organization have successfully moved us forward towards a leadership position in the use of IT to transform health care. We will depend on our strong and capable systems team to build on our success and help realize the benefits of our investments. Please join me in thanking Cliff and in supporting Bruce in his new role.
Rebuttal to Justen Deal's E-mail from George Halvorson
Dear Colleague,
An e-mail was recently sent out broadly to members of our staff stating a number of concerns. Since the e-mail was directly critical of my approach at several levels, and since it seems to be getting a fairly wide distribution, I thought I would personally send out a quick response. I hope this information is useful to you. Please let me know your reaction to this information.
Let me start with the comments about the KFHP/H Board. We have actually assembled an extremely competent and highly independent Board. Their credentials are attached. We have one of the best qualified and most diverse Boards in America. An assessment that says we have a "rubber stamp" Board, is, I believe, fairly obviously inaccurate.
The person who wrote the e-mail is a young man relatively new to KP whose job involves publications. I suspect he hasn't evaluated very many Boards. We have an excellent Board doing very good work.
The e-mail writer initially raised the very same set of concerns he noted in his current broadcast e-mail directly with our Board last August. As we do in those cases, a full and objective investigation followed, with a report made back to the Board by both our compliance staff and our legal staff. The Board concluded that the charges were theory, not fact. He was then asked to provide any actual facts or evidence that he might have. He did not comply with that request. Instead, he wrote the e-mail that you may have read.
Let me address the other issues included in the e-mail. The KP HealthConnect issues are both inaccurate and wrong. The e-mail described what seemed to be a brief and potentially arbitrary decision making process. That was inaccurate. There were no "day one" decisions by me or anyone else. We actually went through an extensive and very inclusive review of our system options. All the major issues ─ including the capacity issues he mentioned ─ were raised and carefully reviewed in that process. Experts were hired. Site visits were made. Credible people ─ including the KLAS independent system review organization ─ concluded that EPIC has the best automated medical record, the best billing system, and the best inpatient hospital system available to us. Dozens of other major care systems and medical groups have reached that same conclusion. To say that EPIC was a bad or inferior choice is highly inaccurate. We very much need the EPIC functionality. The billing system alone is crucial to our operational survival, as people actually involved in our billing process know. Our old home-grown CIS system simply did not have that needed functionality.
The author of the e-mail seems to be reading some initial process notes about concerns expressed early in the system selection evaluation process, and he has evidently derived his "bad choice" theory from some mixture of early, incomplete and inadequate information.
Relative to systems outages, the EPIC system rates very highly among competitive systems on reliability scores. The e-mail writer used somewhat
problematic outage numbers in his e-mail message. To show the rate of increase, he chose a uniquely and unusually low problem month for outages as his performance comparison base. That's a bit misleading. Our systems availability percentage goal by year end is 99.5 percent. For the last six months, we have been averaging 99.54 percent availability. That's significant progress since roughly a year ago when we were below 98 percent.
In addition, it's important to understand that the outages we have faced have not been due to the Epic system. They have been due to issues like power outages in data centers, configuration issues in old data centers, and deployment of the Citrix® software tools. The outage numbers and their causes are all, by the way, reported to the Accountability Committee of our Board monthly.
As we finish our full KP HealthConnect rollout, the actual overall performance of the full system will prove the point beyond debate of whether or not the system can handle our total volume. I am confident that those results will be entirely satisfactory. All signs are that the careful work we did to guarantee scalability of the system have succeeded.
One other point about EPIC ─ I have absolutely no personal conflict of interest relative to EPIC. I have no business interest, financial interest, or even personal interest in EPIC or its systems. My prior health plan did use their system in Minnesota because the system worked. That's generally a good test of a system.
The e-mail writer also stated inaccurately that my prior employer, HealthPartners, had implemented the system in only half of their clinics. That
is also wrong. The truth is that the system is in all HealthPartners-owned clinics and also in the flagship hospital. It is working well.
The writer expressed some concerns about both Dan Garcia and Cliff Dodd in his e-mail. He had raised those points earlier as well. Contrary to what the e-mail said, the independent Board investigation showed that Cliff Dodd was not, in fact, a principal or Board member of the "Tanning" company when they did our systems evaluation work. Dan Garcia, on the other hand, was the head of the search committee that recruited me to join Kaiser Permanente. He did not "hire me" as the e-mail says, but he was on the committee that recommended that I be hired. It's fairly naïve, however, to say that Dan can't subsequently do his job in compliance because of that prior committee role. Using that theory, any Board member on a search committee would be unable to make future decisions and judgments about people they had voted for in a search process. Since half of our Board was on that search committee, applying that theory would make future governance at KP ─ or any other Board governed organization ─ a bit challenging. It's an interesting "conspiracy theory" point, but not particularly useful in the real world of Board functionality and operational governance.
The writer also makes reference to a review of my prior plan done by the Minnesota attorney general. He doesn't mention that the attorney general was also reviewing each major Minnesota health plan and hospital system and ─ in the case of my prior plan ─ the AG offered some critical comments but no actions, no citations, no regulation violations, and no mandatory results of any kind. The full results of that audit were read in detail by our Board, by Medical Group leaders, and by our auditors. It was not, as the e-mail writer suggested, an invisible event "under the radar screen." I made "no comment" statements to the Minnesota press on that topic because I was no longer the CEO there. The new CEO and I agreed that it would be more appropriate for her to be the spokesperson for that plan.
The memo leads off with a mention of our financial future. Interestingly, that's the one area where the e-mail may have done us all a service by
repeating and broadly communicating a point that I made in my recent "bend the expense trend" memo to all staff. It is true that if we do not "bend the trend," as I said in my memo, that we will face real financial challenges. To be specific, if we hold to last year's cost trend, and if we only receive the revenue levels we already know we will get from Medicare and our private payers for 2007 and 2008, the numbers he cited could be real. That's not secret data that he "uncovered". The chart he cites comes from a presentation used with the Board and with our Plan and medical leadership. Those trend levels and their potential impact are numbers that have been well discussed. But, the good news is that the data he wrote about in this weekend's e-mail is already obsolete. He was basing his concerns on an early memo from our CFO written to warn key staff and leadership about the need to reduce our future cost increases. It was a good and useful warning. That cost improvement work is being done. We are showing reduced expense trend levels that are now below that 2005 trend level. Additional hard work is being done. More work has to be done. We need everyone to help "bend the trend".
As you will remember from my "Bend the Trend" memo, we need a cost trend of roughly six percent ─ and we need to maintain and enhance our service levels and quality levels while achieving those trend goals. When we achieve those goals, we will be back where we need to be for ongoing financial success. We need our new products and new systems to get that job done. Our new deductible products are actually doing well financially. We will need to put in place the full set of billing systems needed to support those new products well. KP HealthConnect is the key to that success. Without the EPIC billing systems, our new products would be extremely difficult to administer … particularly as the enrollment in our new products continues to grow. I suspect if the e-mail writer had understood that key aspect of our strategic plan and our operational reality, he might have had a different perception of our system selections and our success levels.
Overall, the e-mail was an unfortunate combination of partial facts, old data, incomplete data, "conspiracy" thinking, and naiveté. It raised alarms that were extremely inaccurate. So I felt a need to write this note to offer another point of view that had a slightly more complete set of facts and a more complete context. I hope this information helps. I apologize for the length of this note, but a lot of issues were raised that needed to be commented on.
Let me make one final point: We do value employee feedback. We have broadly promoted our employee hotline. We encourage input. In this case, we received input. It was taken very seriously. A full investigation was made and the Board received the results of the investigation. It was a good process, done well. It's the right way to respond. So please, if you have issues or concerns, use the process.And let me know if you have any questions or concerns.
Be well.
George
Wow! People are really talking here at Kaiser. Halvorsen is getting
desparate! Making the CIO take the fall for him eh? Typical.
It's perhaps also worth mentioning that Kaiser Northwest had been live on
Epic applications for several years before the rest of Kaiser selected
Epic.
I was always under the impression that KLAS rates you based on what you pay
in support/donations to them as a vendor. Using their "independency" as
the only ruler is laughable. Also, on a funnier note, this was really well
written too. Just like Mr. Dean's email. I wonder how many people
reviewed this before it went out....
If everything is rosie with the IT projects why is the CIO departing on
such short notice and with no explanation?
Curious & more curious?
Thanks for the shout out! I know a number of people who were fired for
trying to point out problems at Kaiser, and no one cared because they
weren't "news". This time Kaiser tried to stomp on someone who has a
*public* record of talking them up! I want as many people to see Kaiser's
true colors as possible.
Is that the same Northwest whose net income plunged 88% first quarter due
to "botched billings"? Dare I suggest Epic might have been involved in
that?
RE: Dodd and Tanning: Tanning Technologies 14A filing with the SEC on
April 24, 2002 includes this statement:
John C. Dodd, who has been one of our directors since July 2001, was Executive Vice President and Chief Information Officer of Qwest Communications from November 1999 until April 2001. Qwest Communications paid a total of $8,897,177 to the Company in respect of services performed and expenses incurred in 2001. Mr. Dodd is currently Chief Information Officer of Kaiser Permanente. In April 2002 the Company began providing IT services for Kaiser.
What a bunch of crap! Kaiser is in trouble and someone in I.S. (the C.I.O.)
takes the fall. Just like Exempla in Denver. Bad decision by the CEO forced
on the CIO for political reasons with Kaiser, and when Epic doesn't work
right, fire the CIO...
And what's up with designating himself as "John C. Dodd" - that seems like
he didn't want his name to be easily found by anyone doing research...
They should be promoting this Dean guy rather than putting him on leave.
It takes a set to stand up and take action against a goliath like Kaiser,
particularly after they repeatedly put you down. When will the industry
learn that it's not how much money you throw around that makes these things
work.
"the independent Board investigation showed that Cliff Dodd was not, in
fact, a principal or Board member of the "Tanning" company when they did
our systems evaluation work"
Hi Justen Deal(All of 25),
With all due respects to the health of the citizens, this reeks of a decoy corporate tactics. Divert attention thru media while we survive the times we live in. Whatever the problems a huge nfp outfit like KP faces..I wonder how media attention like this gets anyone closer to a plausible solution like situation. Any ideas / line of thoughts for a yet a green curious reader? Whatever happened to faith, trust, team strengths. Maybe all employees need mandatory sessions on forgotten values/reconfirm our illusions together.. Now thats a good solution-suggestion.
In speaking of reeking - the "faith, trust, and team" comment looks a lot
like astroturf rendered partially in IMspeak to make it look
authentic...possibly from one of Kaiser's outsourcing partners.
See this link: http://www.findarticles.com/p/articles/mi_m0EIN/is_
2002_May_2/ai_85405519
John C Dodd changed his name, or at least what he was called, shortly after
coming to Kaiser. I remember that well due to his perceived conflict of
interest when signing the HCL contracts. Maybe at his next job he'll be
Jack C Dodd. Oh what tangled web we weave when first we practice to
deceive......
Kaiser is notorious for putting people who disagree with their preconceived
plan on admistrative leave or forcing them to resign. Look at the
transplant program scandal at Kaiser San Fran. Mike Alexander, the CEO of
the medical center, and Linda Groah, the COO of the hospital, resigned
months after the scandal broke. By the way, they called it "retirement"
but neither of them had plans to retire before the scandal rocked the
medical center!!!
People need to realize that Kaiser doesn't just punish dissent at the
executive level. This attitude trickles down to the rank-and-file
employees. You won't hear about those people in the newspaper, so no one
cares. I'm working with a poor soul who got ban-hammered by Kaiser for
raising safety issues. The fact he raised safety issues made him a
"malcontent" that therefore justified his firing. Now he's supposed to face
the HR rubberstamp committee alone on Saturday.
I think that alot of people are missing the broader picture here. I worked
for Cliff and admired him, however on his watch there were hundreds of
millions of dollars simply thrown away through really bad decisions. Who
would you suggest they hold accountable for that?
"this useless banter"
I wonder why people stay at KP with all the problems? It sounds from the
posts that there are few unhappy people who seem to relish in the troubles
of others. Usually the details are never known by non-executive staff not
because of a "conspiracy" but simply it may not be their job.
The reason that people stay at KP, with all of its problems, is that we
believe in its cause. We are trying to provide the best and most affordable
health care anywhere. It's a noble cause, shared by tens of thousands of
employees. It is regrettable that there is mismanagement in the ranks, but
that's nothing new. You hire people, including executives, hoping that they
will deliver. Some do; some don't. At the CIO level, it is more visible,
but not unique. Cliff Dodd had no healthcare experience. To entrust KP's IT
infrastructure to someone so ill equipped as Dodd was not Halverson's
fault; Dodd was hired by the previous CEO. It's the nature of the business.
KP needs to call it a day and put the Dodd debacle behind itself and move
on.
Cliff Dodd should have been fired two years ago. This man entrusted a
bunch of idiots, like Dave Watson, and did not listen to anybody that knew
the systems and work. Cliff truly wore the Emperor’s new clothes and was
not able to tell George of the shortcommings of the system. Revenue
capturing/practice management using Epic is badly flawed and does not
support Kaiser's lines of business. Benefits are managed poorly within the
system too. Inpatient clinical is not proven and Care Everywhere does not
work. I can go on and on.
Cliff Dodd's resignation was not a result of the internal email. His
resignation was already in the works and planned weeks ahead. Speculation
of Cliff's departure from KPIT had been anticipated for a couple years.
Healthconnect (Epic) at Kaiser is way over budget.
Today I learned that some component of the doctors' compensation is being
cut, starting from Jan 1, 2007, due to financial constrains facing the
organization.
It did not make sense to me that, at the time our revenue and
profit are grwoing, I, as a healthcare provider workig in "the most
efficient healthcare system in the US", have to take a paycut.
There was no official explanation for the reason of the current financial
crunch, or any projection how long this financila down period we are
facing. The leadership is suspiciously quiet on this issue.
Doctors are anxious about what's coming next.
The effervesce of champagne popped open after the one-two punch delivered
to KPIT’s dynamic duo - Cliff Dodd and Dave Watson - has gone stale. As
rumor has it, Watson is coming back into power much to the dismay of KPIT’s
rank and file. According to internal sources, today Bruce Turkstra, the
interim CIO, the same one who publicly emasculated Watson by cutting his
staff from 4,000 to a couple hundred in one day, will be sending over 200
or more heads into Watson’s camp. This is an upsetting twist of events
that erodes confidence in the current IT leadership and sends the wrong
message to the KPIT faithful. Watson controlled over 80% of KPIT prior to
his demotion and was the primary cause of the $100+ Million budget overrun
in 2006. By placing an executive back in power who so unscrupulously
robbed Kaiser members of cost-effective healthcare by wasting money on
inefficient IT systems and management only throws a wet blanket onto the
hope that many harbored that Turkstra would build a better organization,
one that rewards fiscal responsibility and discourages fiefdom building.
Of course this fuels speculation that Turkstra is not the appointed heir to
the throne and this is his way to give a virtual bird to the KP executives
by placing back into power someone the next CIO will have to clean up. It
is interesting, however, that the KP CFO, Kathy Lancaster, and KP CEO,
George Halvorson would allow IT to get away with this behavior. It is a
poor showing to KP members, KP healthcare providers, Wall Street Bond
financiers, and State of California.
