During the decade I’ve been CIO, IT operating budgets have been 2 percent of my organization’s total budget, which is typical for the health care industry.
During the same period, IT budgets for the financial services industry have averaged 10 percent or higher.
Since 1998, I’ve often been told that Healthcare IT needs to take a lesson from the financial folks about doing IT right.
The Boston Globe nicely summarized the financial issues at the core of the crisis
1. Mortgage backed securities2. "Stop loss" insurance on mortgage backed securities3. The credit crunch4. The Banking system5. The Bailout6. Recession v. Depression
Given the recent challenges of Lehman, Merrill, AIG, Washington Mutual, and others, you wonder just how effective the IT systems of these companies have been.
Of course they had great transactional systems, disaster recovery, infrastructure, and data warehouses.
However, did they have the business intelligence tools and dashboards that could have alerted decision makers about the looming collapse of the industry?
Did the financial services industry have controls, risk analysis, or a memory of previous crisis – the Depression, the Japanese banking crisis, Enron/Worldcom? Was it greed, irrational expectations or too much data and not enough information that brought down these great institutions?
I’m sure many books will be written about the causes and those who are to blame.
One thing is for certain, In 2008, no one is going to tell me that health care IT should run as well as Lehman Brothers. I’ve even talked to folks in the industry who are rewriting their websites and resumes to remove historical references to their overwhelming historical successes in financial services IT.
I certainly feel for everyone in the financial services industry – the anxiety and stress must feel overwhelming. Given that every person in the US will be paying $3,000 in tax dollars to rescue the industry if the bailout bill passes today, we’re all going to accept responsibility for the IT systems and the management using them that led the unsinkable ship of the financial services industry into an iceberg at full speed.
John D. Halamka, MD, MS, is Chief Information Officer of the
CareGroup Health System, Chief Information Officer and Dean for
Technology at Harvard Medical School, Chairman of the New England
Health Electronic Data Interchange Network (NEHEN), CEO of MA-SHARE
(the Regional Health Information Organization), Chair of the US
Healthcare Information Technology Standards Panel (HITSP), and a
practicing emergency physician.