What ailed health agency's upgrade?

A health agency in California invested three years and more than $12 million

on a software system intended to better capture patient information. But

the software hit numerous snags along the way, and the agency wound up with

software that takes weeks longer to collect payments.

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.

The agency also hired as many as 30 consultants whose cost Altman couldn't

estimate.

In September 1997, the agency signed a seven-year, $11 million contract

with Shared Medical Systems Corp., Malvern, Pa., to install and customize

nine applications, including pharmacy, laboratory, 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. Also, 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.

Nevertheless, Altman said that even though 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.

Mark Anderson, a vice president at Stamford, Conn.-based Meta Group Inc.

and a former hospital chief information officer, 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.

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

consultants at a time when demand and costs for IT services were at their

peak, Altman said.

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.

— Distributed by IDG News Service.

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