Project Bogs Down San Mateo Agency

FRAMINGHAM (08/04/2000) - After investing three years and more than $12 million on a software system intended to better capture patient information, a state health agency is left with new software that takes 59% longer to collect bill payments and whose implementation has hit numerous snags.

Analysts and users said the situation highlights how poor project management can delay software implementations and interrupt business processes.

Maya Altman, deputy director at San Mateo Health Services Agency, a California county government health-services provider, said the $12 million includes money spent on software, network upgrades, data servers and hardware, including 900 new desktop PCs.

In addition, the agency hired as many as 30 additional consultants whose cost Altman couldn't estimate, though they were paid from the $23 million the agency spent on all information technology projects during the past three years.

In September 1997, the agency signed a seven-year, $11 million contract with Shared Medical Systems Corp. (SMS) in Malvern, Pa., to install and customize nine applications, including pharmacy, lab, patient registration and billing applications.

But the system, which was also designed to make billing more efficient, has increased the time it takes to collect payments from an average of 75 days to 119 during the past year.

Altman couldn't put a number on the "higher cash deficit" that resulted, but he did say the agency's gross revenue is $120 million per year.

While the goals of the system haven't been met, the agency is still better off than it was three years ago, when it had 40 stand-alone systems, said Altman.

But the agency still doesn't have a common patient registration data repository, so caregivers don't know if a patient receiving mental-health services may have also received care in another division.

Mark Anderson, a vice president at Stamford, Conn.-based Meta Group Inc. and a former hospital CIO, said that such software failures are relatively common in the health-care industry because IT leaders typically aren't part of a hospital's executive team. As a result, there is less communication between business and IT, though failures are usually caught much earlier than they were at San Mateo.

So what went wrong at the health agency? For one thing, San Mateo was under deadline pressure to install the system prior to Jan. 1. That meant hiring outside consultants at a time when demand and costs for IT services were at their peak, said Altman.

To complete the work on time, the agency had to shorten training and systems testing. Simultaneously working on year 2000 projects, upgrading the network and installing major software overstrained the agency, Altman said.

"We're definitely not blaming SMS. We had management issues of our own," she said.

But turnover at SMS also contributed to a bumpy implementation, the agency said. SMS assigned five project managers in 18 months, Altman said.

Maryellen Katrosh, a spokesperson at SMS, couldn't explain the turnover, but said at least one project manager was replaced at the request of the agency.

She also said IT problems at the health agency resided not in the software but in the network infrastructure. Altman disagreed with Katrosh, citing the reasons she stated earlier.

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