301 Military Hospital Management Seminar

1. 301 Military Hospital Management Seminar Beijing, China June 21, 2012 How HIT Can Solve or Cause Quality Problems

2. Presentation Agenda Page About the Dorenfest Group 3 The Original Vision and Reasons for HIT 11 Examples of How HIT Can Cause or Solve Quality Problems 17 HIT and Quality in China 22 Clinical Decision Support and Data Analysis in China Hospitals28 How Can China “Leapfrog” in Using HIT for Quality Improvement? 33

3. The Dorenfest Group 40 years experience in HIT Offer healthcare improvement services through a variety of businesses. Software Hospital Operations Improvement for over 300 Hospitals Consultation with over 200 Technology and Software Vendors in Health Created the Product That Became the HIMSS Analytics Database Our work focuses on improving patient care and operational efficiency through better change management Work process improvement Management systems improvement Improvement in services for patients Improvement in quality of patient care

4. Dorenfest’s Investigation of China Healthcare in 2005-2006 Dorenfest investigated China healthcare in 2005 and 2006 by visiting 17 cities, meeting with healthcare leaders, and visiting over 100 hospitals We observed a major opportunity in China HIT to help Chinese hospitals and health bureaus to do better with their IT improvement efforts Chinese healthcare leaders wanted to “leapfrog” the world in IT use, and to do that, they needed to make a number of changes in how IT was managed By learning from early adopters about what they did right and what they did wrong, and doing more of what they did right and less of what they did wrong, China can benefit from the experience of the world to do much better in HIT We created a consulting, education, and training company to bring the experience of the world to China to help the Chinese healthcare leaders to learn faster and accomplish their goals of “leapfrogging” the world in IT use

5. China Healthcare Leaders Want to “Leapfrog” the World in IT Use Chinese hospitals and health bureaus are carefully considering how to be more successful in taking next steps forward in IT use There is a recognition that for China to accomplish its objectives in HIT requires the following: Learning quickly from the global experience Overcoming resistance to change Knowing how to manage change Doing more of what the rest of the world did right and less of what they did wrong to avoid mistakes other countries have made and China is still making Developing more expertise in these areas of need quickly

6. The Dorenfest Group Is Bringing Needed New Skills to China 1. Hospital Operations Improvement and Change Management 2. IT Program Improvement, Problem-solving, Strategy, and Planning 3. New Approaches to Buying IT Systems in a Stronger Partnership with Users 4. New Ways to implement IT Systems

7. Examples of Dorenfest Projects in China The Dorenfest China Healthcare Group was formed in 2006 to offer consulting services to China Hospitals and Health Bureaus. We have worked with over 25 hospitals and health bureaus to help them use information technology more effectively and have consulted with a variety of Western companies Some health bureau clients for RHN and digital hospital planning Shenzhen Chongqing Some hospital clients Peking University Third Hospital Foshan City First People’s Hospital Shanghai Changning Maternity & Infant Health Institute Rizhao City People’s Hospital

8. Examples of Dorenfest Projects in China(Continued) Helping clients from other locations bring their skills to Mainland China Hong Kong Hospital Authority IMS China Microsoft China Philips Healthcare China Helping Chinese companies Donglian – Hangzhou East Associates Heren Health Simcere Pharmaceuticals

9. Dorenfest Education in China – Tongren Hospital, Beijing 2005

10. Dorenfest Education in China – Zhejiang Medical Association 2009

11. 301 Military Hospital Management Seminar The Original Vision and Reasons for HIT

12. The Situation in U.S. Hospitals in 1970 When Systems Were Still Manual • Many entries of similar data into different manual records • Great redundancy of information and supporting work • Lack of timeliness in processing doctors’ orders and test results, etc. • High error potential • Multiple databases did not always contain the same information • Very difficult to find data for analysis

13. This Led to the Original Vision for HIT • Enter information once • Communicate the information to those who need to know • Update all necessary files and databases • Create an electronic medical record (EMR) • Have the data available in automated form and organized so that it is easy to retrieve and analyze the data to support good clinical decision making

14. U.S. Hospitals Have Sought the Original Vision Through 4 Generations of IT Software Systems • Finance Systems (1960s and 1970s) • Limited Clinical Systems (1970s and 1980s) • More Advanced Clinical Systems (Late 1980s and 1990s) • Electronic Health Records (2000s)

15. IT Caused Problems Because of Poorly Implemented Change Growth in Redundancy 4x New Thrusts of the 2000s 3x NOW 1990's Systems and Surrounding Integration 2x Legacy I.T. Systems Before IT=1x Manual Total Hospital Work Process

16. HIT Evolution in the Rest of the World • Canada started in the late 1970s • Europe and Australia began in the early 1980s • Asia began in the 1990s • Canada, France, Germany, England, and Australia all started later than the U.S., Invested less, and have made more progress • Hong Kong started even later, invested less, and now is the state of the art in HIT use in the world • China HIT is now at an earlier stage of development. China has the goals and desire to “leapfrog” the rest of the world in HIT use in the next few years

17. 301 Military Hospital Management Seminar Examples of How HIT Can Cause or Solve Quality Problems

18. A Major Objective of the Original Vision of HIT Was to Do the Work Once • But even today in most U.S. hospitals, similar data is entered many times, creating the opportunity for many errors • So if the data was entered once, opportunities for error would be reduced, making everything else work better • For example, in a typical Chinese hospital, the clinician is entering outpatient orders through a physician workstation. Because systems are sometimes not very well designed, the physician may be filling out a number of paper order forms to supplement what he has entered in the computer. Then he may enter the same information into the patient’s outpatient paper record • If that physician could enter the data once, the physician would have more time for taking care of his patients – the most valuable use of his time • If physicians had more time for patient care, they will do a better job, and the hospitals they work in will earn more revenue

19. How Can Well Conceived HIT Systems Help the Physician? 1. Well-designed computer systems can reduce physicians’ time on recordkeeping, permitting the physician to spend more time with patients 2. A well-designed computer system can provide easy access to accurate data, giving physicians confidence that they know what they are looking at and can rely on it in patient treatment • A well-designed computer system can provide useful data for physician decision making and hospital management of quality of care • While in China, physicians are in the early stages of using computerized data to support clinical decision making, in the U.S. physicians do much data analysis to support their clinical work and research activities

20. How Can Well Conceived HIT Systems Help the Physician? (Continued) • When patient data available in automated form is accurate, physicians will access it for clinical decision making support. Some examples of uses in the U.S. are: • A complex disease with unusual characteristics • Where familiarity with a certain disease is lacking • To support better understanding of the frequency of different treatments for a particular diagnosis 6. Some other simple automated activities can help the physician a lot: • Immediate availability of automated lab results • Immediate availability of current and old images from CT, MRI, ultrasound, etc. • Immediate availability of patient history

21. Examples of How HIT Can Help Quality in Ancillary Departments • Laboratory systems where all testing is integrated with the LIS, so that the test results are automatically passed to the LIS system, and then to the physician, provides a great benefit • Radiology information systems with PACS components are able to distribute radiology results and images in a variety of ways, making the physician’s job more effective and more timely

22. 301 Military Hospital Management Seminar HIT and Quality in China

23. The Development of HIT in China Redundant, expensive, and error-prone hospital work processes led to the initiation and development of HIT in China Chinese hospitals began to computerize in the late 1980s and early 1990s The initial focus of computer efforts was on financial systems In the early 2000s, fueled by the Ministry of Health (MOH) guidelines for health IT development issued in 2003, which called for all cities in China to implement RHNs and digital hospitals by 2010, hospitals began to purchase clinical systems in a variety of areas HIT is one of the 8 pillars of China’s Healthcare Reform. Much new spending is fueling a variety of new system purchases and development

24. How Is IT Used in China Today? Low investment in the 20-year period 1990 to 2010 caused slow progress in HIT Like other early adopter countries, China’s approach to IT systems buying and implementation has created unnecessarily redundant and error-prone work processes, poorly integrated systems, and unhappy users At the current time, China HIT systems are primarily used for recordkeeping, and have many characteristics in common with the poorly-working HIT systems of other countries, particularly in their earlier years The current foundation of HIT efforts in China, including software and hardware platforms, and integration tools, is in need of improvement to support the accomplishments of China’s vision for HIT improvement With much more money available today, China is at a crossroads. There is a great opportunity to use that money wisely and produce many more assisters to quality of care by paying much greater attention to what worked and did not work in early adopter countries of the world. Using more of what worked and less of what did not work, Chinese Hospitals and Health Bureau leaders will make much greater progress toward their vision and “leapfrog” goals

25. Cashiering (Vendor 2) General Accounting (Vendor 2) The Current Computing Environment in a Typical Large Complex Chinese Hospital Today Sample Current Systems (High Level View) Office Automation Systems Core Vendor (Vendor 1) Major Financial Systems Major Ancillary Systems Major Clinic Order Management Inpatient ADT and Billing Performance Assessment System (Vendor 13) Financial (Vendor 2) R.I.S./PACS (Vendor 4) Inpatient Physician Workstation Policy Exchange Platform (Vendor 13) Outpatient and ER Registration L.I.S. (Vendor 3) MD Workstation (Vendor 2) Webport System (Vendor 13) Outpatient Physician Workstation Outpatient Pricing and Charging Pharmacy (Vendor 2) Blood Bank (Vendor 3) Major Admin Systems Hospital Website (Vendor 13) Inpatient Pharmacy L.I.S. (Vendor 3) Material Supply Bar Code (Vendor 3) Medical Ins (Vendor 9) Outpatient Pharmacy Smart Card OR/Anesthesia (Vendor 5) Medical Ins (Vendor 10) Lab Price System Ultrasound (Vendor 6) Patient Consultation Survey Medical Records (Vendor 11) Inpatient Insurance Interface Stomatology (Vendor 7) RF Card Producing Sub-System Human Resources (Vendor 12) Instrument and Equipment Management Many Other Niche and Specialty Systems Inpatient EMR (Vendor 8) Note: Chart taken from a couple of real hospital situations with each vendor or product family shown in a different color

26. Major Areas of Future Development and Opportunity in the China HIT Market • A new generation of HIT application software will become available in a more product-izedform, with greater tools to support proper use of the information in the IT systems 2. New application software will emerge to serve the not yet automated areas of clinical work processes 3. Integration tools to facilitate the development of an improved IT environment will emerge 4. Data analytics products and support tools to facilitate better data analysis, reporting, and decision making will emerge as Chinese Hospital Managers grow in sophistication 5. New service and implementation approaches are beginning to emerge • General contracting for entire efforts with some company software and some partner software • Front end planning, buying, and implementation services purchased from independent third parties to help hospitals make better buying decisions and create more successful implementation of software

27. Today Chinese Hospital HIT Investment Is Spent Differently Than the Rest of the World SOURCE: CCW Research

28. 301 Military Hospital Management Seminar Clinical Decision Support and Data Analysis in China Hospitals

29. Background and Current Situation in Data Analytics in China Hospitals • Until recently, there has been relatively little focus on the building of historic data in automated form in Chinese hospitals • Most automation in the outpatient area has been to support the ordering and collection of work done for patients in the outpatient setting. At the conclusion of an outpatient visit in most hospitals in China today, entries are made manually in an outpatient manual record that is returned to the patient at the conclusion of his/her visit. Today in some hospitals, some of the entries into the patient’s manual record are made from the automated systems through printouts • In most hospitals in China today, some outpatient data from previous visits is available in the automated revenue and ancillary service systems of these hospitals, but very little access is made of this information • On the inpatient side, hospitals began implementing various forms of EMRs in the past five years. Most of the EMRs in use today are at an early stage and require lots of typing from the physician. Often these EMRs create more work for the physicians than they used to do in the manual system, creating dissatisfaction in those situations

30. Background and Current Situation in Data Analytics in China Hospitals (Continued) • Until recently, the EMR data was not accessed for analytical purposes, and there was relatively little motivation to do that in Chinese hospitals • Healthcare reform in China, beginning in April of 2009, changed the demand and interest in building databases of historic data for various kinds of analytical purposes • As part of the healthcare reform package, the concept of having data available for analytical purposes from a national platform of EHRs and EMRs, which will be built at the city, provincial, and national levels, has emerged. While there is a great deal of unknown and undefined elements to the EHR/EMR program, much money is being invested in various kinds of efforts to implement new systems and databases • In spite of not knowing what they want to do with the data they will have, Chinese hospitals continue to buy products that would help them to access and analyze that data. The goals of healthcare reform are increasing the amount of data that will be available in health bureau and hospital databases and are further motivating hospital leaders to be interested in data analytics

31. The Possible Future of Clinical Decision Support and Data Analysis 1. Hospital leaders are more familiar with the management of their financial and business activities and often ask questions that cannot be answered through the data available in the hospital IT systems. This setting has caused some forward-thinking hospitals to buy business intelligence systems that provide data warehousing capability and analytical tools to analyze their business data 2. Opportunities are beginning to emerge in analytics of clinical and medical data. Hospitals that are early stage adopters are buying some kind of CDR data warehouse product to house all of their automated data, making it accessible for analysis, and providing tools to analyze and view the data. At the present time, the buyers are still diligently working to determine how to use the data that is contained in these systems

32. The Possible Future of Clinical Decision Support and Data Analysis (Continued) 3. Another opportunity area in Chinese hospitals for data is for clinical research. Already leading Chinese medical universities and clinicians in the leading hospitals are doing some research and building data to support their research. There is a great deal of clinical trial work emerging in China. This is creating needs for clinical data that may or may not be available at the present time 4. These trends and conditions in the HIT market in China indicate that clinical decision support and data analysis will be a big opportunity in the future, developing faster as Chinese hospital leaders determine what to do with the data in their databases and how analysis can benefit them

33. 301 Military Hospital Management Seminar How Can China “Leapfrog” in Using HIT for Quality Improvement?

34. China Has a Unique Opportunity 1. Approaching the national vision for HIT in China in a proper way will produce a national database of patient information that could be accessed as the patient travels around the country • This is not easy, but because of China’s individual identity cards, everybody in China has a unique number that could be the starting point for this national database • If the vision is thought through in a way that allows adequate integration and roll-up of the individual patient encounter to the national database, and access to the national database, wonderful things can be accomplished • In the U.S., there is no such national I.D. number, and great argument about what I.D. number to use • To accomplish the opportunity that is available to China, a great deal more thought is required related to how to build the foundation of the individual entities to support accomplishing the national vision • Until this happens, each individual hospital will need to continue to work with its present foundation to build it into what would be an appropriate foundation to support its present and future needs

35. China Has Moved Too Fast in the Following Areas of HIT Development 1. Oversimplifying vision and ideas so that execution brought disappointment 2. Buying HIT systems too quickly with too little front end planning and too little user involvement 3. Adopting best of breed software acquisition approaches without adequate attention to how these different software vendor products would fit together as a unit and work seamlessly in the hospital

36. China Has Moved Too Slow in the Following Areas of HIT Development 1. To recognize the value and to invest in the methods to integrate a variety of different software vendors, and to not use too many software vendors if they cannot be integrated 2. To address cultural impediments to good change management by involving the users more and adopting processes that lead to good buying decisions

37. Creating More Success in the Current China Healthcare Environment 1. There is much momentum for change. More money will be spent and better results are mandatory 2. Because of limited investment for many years in China HIT, Chinese hospitals have created a poor foundation for implementing its HIT vision of the future, and have made many of the same mistakes that the U.S. made in its early adoption of HIT • Now China is at a crossroads. It is spending much money to accomplish a very grand HIT vision • But more careful front end planning at every level of the country – from the hospital to the health bureau to the national level – must be done to support the execution of what could be a wonderful vision if successfully implemented • By recognizing what the rest of the world learned from their successes and failures, and doing more of what the rest of the world did right, and less of what the rest of the world did wrong, China will be able to make much faster and better progress in the future of HIT implementation

38. THANK YOU. FOR MORE INFORMATION CONTACT: SHELDON I. DORENFEST OR XIAO LIU THE DORENFEST GROUP THE DORENFEST CHINA NBC TOWER, SUITE 2725 HEALTHCARE GROUP 455 N. CITYFRONT PLAZA DRIVE HUAIHAI EAST ROAD NO. 45 CHICAGO, IL 60611-5555 HUAIHAI PLAZA U.S. OF AMERICA SUITE 908 PHONE: 312-464-3000 SHANGHAI, CHINA FAX: 312-467-0541 PHONE: 021-51001821 WEB SITE ADDRESS: www.Dorenfest.com E-MAIL ADDRESS: info@Dorenfest.com SHELDON’S E-MAIL ADDRESS: sheldon@Dorenfest.com XIAO’S E-MAIL ADDRESS : xiao.liu@Dorenfest.com