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Phil Fasano: Kaiser CIO on data center strategy, budget growth, medical imaging and PAC's plans

Editor's Note: This is part two of an exclusive interview with Philip Fasano, Senior Vice President and CIO for Kaiser Health Plan, and Kaiser Foundation Hospitals. In this discussion we cover Fasano's strategy for outsourcing to IBM a $500 million data center operations management project, Kaiser's IT budget growth in 2009 versus 2008 and where strategic invests are being made and priorities being re-evaluated, as well Kaiser's IT department challenge of mass data storage in relationship to their PAC's strategy and medical imaging storage challenges. Read part one.


Phil Fasano
WTN News: In regards to your recent $500 million data center outsourcing project with IBM, how did the present global economic situation effect your decision in regards to the strains on operations and infrastructure management to ensure that you have a sound base for going?

Philip Fasano: We are looking to leverage our health information technology (HIT) knowledge that exists in our people and our data centers in partnership with IBM's world-class leadership and data center management and data center processes. We are a high performance organization that's looking to increase our total performance and uptime as we seek to continually improve our performance and our quality, not only in our data center, but also across the entire organization. We anticipate that this relationship will allow us to accelerate the capabilities and strengthen those capabilities as a consequence of the partnership and we are really looking forward to that relationship and the outcomes from it. We believe strongly that we should do this and the leverage our relationship with IBM Healthcare going to allow our IT organization to continuously improve. Many of our hospitals have moved to electronic medical record (EMR) are having some challenges with adoption, our new hospitals are paperless, so in our case the availability of our systems is functionally critical to the operations of our inpatient organization, our clinics. This is functionally critical to our members when they are looking for information on kp.org so for our organization our systems must always be on and we expect that this partnership is going to allow us fulfill that vision.

WTN News: When you were making the strategic decisions to outsource your data center management to IBM what was your strategy in terms employment that impacts a large number of people and also of a high quality clinical care system?

Fasano: The fact that our system of care is a technology enabled healthcare system, our approach is to continue leveraging information technology even more in the future and in many other ways that haven't been explored here before because our organization is focused on innovation and healthcare as well and we anticipate information technology is going to at the heart of numerous innovations particularly in the future.

WTN News: How is your IT organization fairing in this economic crisis, are your IT budgets up or are they down?
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Fasano: When you compare 2008 and 2009 our IT budget is up versus last year. Part of our partnership with IBM address the economy in that we had to eliminate a 160 positions as part of this announcement and that was absolutely a consequence of Kaiser reducing the growth of our IT spending versus what we had formally planned for 2009, having said that we reduced the growth, but it still remains growth versus last year for as our organization is still as strongly committed to the using and expansion of our IT capabilities.

WTN News: So can you give a percentage of where you think your IT budget will be for 2008 versus 2009?

Fasano: Comparing 2008 to 2009 we are in at the single digits in terms of growth of IT spending. We are in the mid single digits in terms of growth in year over year budget.

WTN News: So what IT technology purchases or projects are you investing in and what are you cutting back on?

Fasano: As an organization our IT investments are quite substantial. They are in the hundreds of millions of dollars in terms of new IT investments year over year. Having said that, I have reduced the growth on some of these investments. We have obviously sequenced some of our plans a little bit differently. Some of our core systems and operation plans have been revised a little bit differently. The systems that support our health insurance company have been impacted differently and that means we are continuing to work on enhancements to our claim systems and enhancements to our membership systems. We have just changed our implementation schedule on some of those plans and in some cases have changed the duration of the programs. But overall our programs remain intact, but I think it's really about sequencing and pace.

WTN News: We hear from quite a few CIO's at large provider organizations institutions that one of the biggest challenges they have is the massive volume of data and especially images that are challenging and taxing the IT systems. How are you handling these massive quantities of the images that are generated and are they being locked up in an independent archive. What technologies are using besides picture archiving and communications systems (PACS) and servers? What are your plans to manage the storage these mass data storage issues besides to throwing more mega terabytes at the problem?

Fasano: Like many large hospitals and clinics we allocate massive terabytes at this issue. We have a very substantial medical imagining program across the organization.

In all of our regions, we are we continue to expand our use of PACs. We have a very, very large and substantial medical imaging archived program that's embedded in our investment program as an organization. Like many healthcare providers, we are struggling with the fact that medical images have come on the scene as a very, very substantial consumer of storage and the growth. This area is explosive and we are experiencing like others that same growth curve of storage requirements.

The challenge I think for everyone in the industry is going to be two fold, one is how do we deal with the abundance of data and then how do we push the manufacturers to find ways to compress it further and help us really achieve and support our storage needs that we are going to need in the future. Our IT organization and our data centers, currently to our knowledge, are substantially the largest in the healthcare industry. I feel confident that our needs for storage are quite substantial, whereas at least as large as the Library of Congress. In fact our storage systems and requirements are larger than the Library of Congress terms in our storage consumption and needs and that grows substantially year over year.

WTN News: So are you looking at any independent archive that's vendor neutral or are you tied to a vendor for PACs and server and storage hardware?

Fasano: Most of that work is currently in design phase and given our scale, and I would suggest that our scale is quite large and serves over seven million members across the country. We currently have a very substantial program led by some of our key IT and physician leaders who are looking at a number of alternative solutions that we are going to select for the company. That solution hasn't been made in terms of our future plans; our current system is a number of different imaging archives from current vendors.

WTN News: What would you describe that as your biggest problem or challenge in the medical imaging area?

Fasano: Medical imaging archiving and the need to store medical images and the duration for which we have to store and access them is going to be a very significant challenge for providers in this industry. Obviously most people would like to go to PACs based imaging, it provides you know a higher resolution and better tool set, and really enables quite a lot of diagnosis in ways that the older technologies just don't provide. Moving away from film also allows providers to really change the operations model for radiology if you are just suppose to do that.

WTN News: So let me get this right, you are in a strategic planning process and you are not necessarily picking a vendor or a solution at this point, you are looking at all options?

Fasano: We are looking at a number of options at this point narrowing the field pretty rapidly.

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