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CIOs Report on One of Their Busiest Years

CIOs Report on One of Their Busiest Years

By Michael E Hilts for Health Management Technology

Healthcare CIOs have their hands full with meaningful-use missions and other priorities. But their pockets are fuller, too, with a growing compensation and healthy bonuses.

One could say that healthcare chief information officers are in their heyday. In fact, times might not get much better, or busier, than they are now or will be for the next few years. CIOs are at the heavy-lifting end of healthcare reform and HITECH, and the CIO’s leadership job has never been more vital or more needed. Such was the backdrop as Health Management Technology and its project partner, executive search firm CES Partners Ltd., conducted a healthcare CIO survey of 2011.

Over the past 30-plus years of publication history, Health Management Technology has reported frequently on the state of the CIO role in healthcare – even before many hospitals had established formal information technology departments, much less assigned a director or vice president title to lead the tech troops. The early HMT surveys reported much on the evolution of the IT staff size and structure, as well as CIO growth in their roles, including that gradual rise to join other C-level executives at the senior table. This special report continues the tradition of benchmarking the healthcare CIO role, reporting on many of the same measures and a few new ones.

What the CIOs said, in short, is that their hands are full – with plenty of priorities in addition to their meaningful-use mission – but their pockets are fuller, too, with a growing compensation and healthy bonuses. More of them report to the corner office. They’re spending more money and leading larger staffs. They have significant experience that’s high in demand, and more than half are trying to figure out where their next career move should take them. But before we dig into the numbers, here’s a profile of the leaders who volunteered the data for this report.

Voice of experience

As in past years, our 2011 healthcare CIO survey focuses very tightly on the top information technology executive in hospitals and health systems with acute-care hospitals. That means that most participants, though not all, have titles that include chief information officer.

Regardless of title, the survey participants are a very experienced lot. They have averaged 22 years serving in healthcare organizations, seven years in their current IT leadership post and more than 11 years in CIO posts during their careers. The organizations they work in are a close representation of the U.S. hospital landscape, matching closely to recent statistical profiles of the American Hospital Association. Our survey respondents represent hospitals in 36 states, with 52 percent reporting on behalf of single hospitals and 48 percent representing multi-hospital systems.

It is what you know

Sure, street wisdom says who you know counts more than what you know in getting the job. Yet, once you’re in the hot seat of the CIO job, what you know becomes paramount. Indeed, because healthcare organizations are more frequently preferring or requiring that their senior executives hold advanced degrees, we added a couple new questions to our 2011 survey. We asked CIOs to report both on the education and training they have, and what they feel CIOs should have. In general, healthcare CIOs are coming to the job with a good set of credentials in place, and they continue to tack on extra initials as they go.

While all the reporting CIOs have bachelor’s degrees and most with some concentrations in math, engineering or information systems, half of our CIO respondents (51 percent) indicate they have also earned at least one master’s degree. A stronger majority (57 percent) say that today’s CIO should have post-graduate degrees. The recommendations vary as to what master’s-level work is most useful in managing the CIO job, but the strongest vote registers for a master’s in business administration (MBA), with close competition from master’s in health administration (MHA) and master’s of information systems degrees. A few are calling for education more targeted to healthcare through training in health informatics.

Respondents report much of the targeted healthcare training is coming after they’ve been in IT leadership seats for a while. CIOs are taking many routes to continue their education beyond primary degrees. Common ones include certificate programs in information systems, including certificates from the Health Information Management and Systems Society (HIMSS) and the College of Health Information Management Executives (CHIME).

Even though HIMSS’ certification program is still relatively young (10 years old next year), more than 26 percent of our survey’s CIOs have earned the Certified Professional in Healthcare Information and Management Systems (CPHIMS) certification. An even newer healthcare IT credential is CHIME’s certificate, initiated in 2009. Yet, it has already attracted its share of disciples; close to 11 percent of survey respondents indicate that CIOs ought to pursue that organization’s Certified Healthcare CIO (CHCIO) certification.

Another certificate of growing importance is the Project Management Professional (PMP) certification. Only a few sitting CIOs (fewer than 2 percent) report having PMP credentials, but 8 percent of survey participants say that CIOs should possess the training.

Who’s your boss?

The pendulum continues to swing in the role or title that healthcare CIOs report to. In the first few years after 2000, CIO reporting in organizations both inside and outside of healthcare shifted so that it wasn’t even a toss up anymore whether you reported to the CEO. Instead of pulling up their chairs at the senior executive table, CIOs were more commonly reporting to the CFO or the COO than they were to the CEO. In some polls, more than 30 percent of CIOs were reporting to the CFO. But, by 2005 or 2006, the CIO star began rising again, as that strategic role evolved. Especially in healthcare, with hospitals investing greater sums and bigger budget shares than ever in information technology, CIO reporting trended back to the top brass. In our 2009 survey, only 43 percent were reporting to CEOs; now, it’s 54 percent, with almost 20 percent reporting to the CFO. The relatively large “other” response segment (14 percent) is comprised of split or dual reporting (e.g., CEO and CFO), direct to the board of directors or less-common titles, such as chief administrative officer, chancellor or chief of corporate services.

Busy leaders of many

It has been often repeated, after actor/comedienne Lucille Ball said it, “If you want something done, ask a busy person to do it.” Apparently, health systems have taken Lucy’s advice and piled the work on their CIOs. Our survey says that today’s healthcare CIOs oversee an average of 2.7 departments, or almost two departments more than just information technology.

Of responding CIOs, 89 percent report leading at least one other department. In the electronic age, it makes sense that the most common allied role is telecommunications; in close to 80 percent of healthcare organizations, the CIO heads up telecommunications as well as IT. But, the bailiwick of CIOs broadened widely a year ago and the domain they rule seems to be getting wider. Now, 22 percent of CIOs report also leading health information management departments, and 13 percent are in charge of biomedical engineering.

Do you speak clinical?

CIOs are not generally credentialed clinicians, and the percentages are dropping in recent years, as IT staffs now include more formal positions for clinicians, including roles for nursing informatics and medical informatics leaders. Of the 2011 survey respondents, just fewer than 15 percent of CIOs report having any clinical background. Of those that do, few are physicians; common backgrounds include nursing, as well as pharmacy, radiology and lab techs.

And just because the top IT dog isn’t a clinician, that doesn’t mean clinical representation isn’t there. In fact, clinical representation has increased dramatically in the past few years. Hospitals and health systems recently crossed a threshold where more than half include chief medical information officers (CMIOs) in their organization charts. In this year’s survey, 51 percent of respondents indicate their organization charts now include CMIO positions, up from 44 percent who had installed CMIOs by 2009.

There is, however, a shift occurring in the department in which the CMIOs reside, and the executives to whom they report. In just over half the reported structures, the CMIO reports to the CIO, down from 66 percent reporting to CIOs just a couple years before. Now, in 26 percent of the cases, CMIOs report dually, to both CIO and CMO. And, in close to 13 percent of organization structures, the CMIO reports only to the CMO, the traditional quality leader for a health system.

Compensation is rising again

According to almost every human resources expert you hear via survey, speech or article, compensation never ranks as the “most important” factor in attracting candidates to jobs, nor in their job satisfaction or employee retention. It may not rank at the top, but salary is always near the top in job considerations, and executives do seek good information as to where they stand amongst their peers.

Beyond the personal reasons, knowing the industry pay scale can help when it comes to hiring and retaining IT leadership. So, what’s the scoop in 2011? CIO salaries are increasing, even if slightly, despite the recession flattening that occurred from 2008 to 2010, significant budget challenges from state reimbursement rates and zero cost-of-living adjustments in federal programs for two years.

The overall base salary for healthcare CIO respondents in this survey was $231,020, with the total cash compensation before benefits and perks of $262,438, when taking into account the bonus or incentive pay. Of the survey participants, 70.4 percent of them indicated being eligible for bonus pay. The bonus incentives spread evenly across a wide range, from a low of 1 percent to a high of 45 percent of base salary, with an average potential bonus of 20.9 percent of base salary. Perhaps more important, most eligible CIOs (94 percent) report receiving some portion of their bonus.

Next in command

The second in command behind the CIO varied considerably by size of organization, including regional and associate CIOs, some vice presidents and a few chiefs of security or technology. But number twos also gathered in directors of applications, directors of clinical information systems and senior analysts. A trend worth watching, while the war for talent heats up early in the meaningful-use era, will be how organizations work to retain key staff in this tier of their IT staff. Many organizations have begun establishing bonus potential for these key positions. In fact, 41.6 percent of survey respondents reported that the number-two posts were eligible for bonuses. As in the case of their own CIO bonus potential, the extra compensation could be significant, ranging as high as 35 percent and averaging 13.6 percent.

Another way organizations are working to keep their team on board and content: identifying CIO successors. A strong 52 percent of organizations indicated they have a CIO successor in place. Moreover, they seem to be active in cultivating their next CIO leaders. As might be expected, the primary ways organizations are acculturating their future top IT executives are including them in department budgeting, financial planning and strategic planning: 89 percent of identified successors are part of these processes. But significantly, two-thirds of the apparent heirs have also been involved in special executive coaching or training, and almost 40 percent are participating in their health system board meetings.

Sleepless in C-suite

It’s not that CIOs need anything else to keep them tossing and turning at night. After all, there have always been pretty strong pressures on IT departments, from supporting clinical information systems and decision support, to the headaches earned while guiding some of the most costly projects their health systems have ever seen (EMR and CPOE). But, being one full stride into the era of health reform definitely had its effect on the marching orders for healthcare CIOs.

Working on meeting meaningful-use objectives and deadlines soared to the top of the technical issues priority list for CIOs, ranking either as first (65 percent) or second (31 percent) to rule the day in their IT shops. The next overall priority was patient safety and medical error reduction, with 70 percent of respondents indicating this to be very high or high priority; followed closely by assisting physician practices with electronic medical records or information technology (68 percent) and improving data security (66 percent).

We didn’t ask, but CIOs told us what else is showing up on their radars. As unprompted write-ins, 9 percent of our survey respondents shared with us several additional challenges and projects that are commanding increasing and immediate attention in their IT departments. They named some everyday work, such as new patient towers, new data centers and house-wide wireless network upgrades. And several identified projects that lurked under the surface for a while that are now front and center: Version 5010 electronic transaction standards and remediation work to prepare for ICD-10 (for October 2013).

ICD-10 did indeed rank high on the survey respondents list of non-technical priorities. In fact, almost three-fourths (74.1 percent) of CIOs said it is a very high or high priority project in their IT shops. Only working with physicians and clinicians to boost their utilization of information systems ranked higher, with 83.3 percent listing it as a very high or high priority.

The complaint box

After listing the technical and non-technical priorities in their IT shops, the survey participants also reported on the obstacles that make it tougher to advance those priorities. In several of HMT’s past CIO surveys, respondents put budgetary constraints at the top. In an age where most IT shops are provided more resources – commonly 3 to 5 percent or higher of their overall health system budgets, they’re not complaining as much about the bucks. Now, there’s a new reigning hurdle: too many competing priorities. A large majority (85 percent) indicated that too many competing priorities are preventing them from progressing in their strategic paths. Still, limited resources remain a thorn in their side. The next three ranking obstacles, according to survey respondents, are IT budget constraints (63 percent), inadequate IT staff size or technical expertise (50 percent) and organization-wide budget cuts (41 percent).

Progress on meaningful use

For most healthcare CIOs, the hottest question of the day – or at least of every monthly board meeting – is: “How are you progressing toward meaningful-use deadlines?” We thought, as long as we had CIOs reporting on other key topics, we’d take a quick pulse on their status and their confidence, both for receiving payments under Stage 1 and forecasting for Stage 2.

Many CIOs reported being able to qualify, some having already attested, and most expecting incentive payments in 2012. Many also report having to wait to attest, due to their state Medicaid program’s unreadiness. Overall, only 47 percent of organizations reported that they expected to qualify for incentive payments in Stage 1. But add a little time, and that confidence jumps dramatically: 89 percent say they expect to qualify in Stage 2. Of the remaining 11 percent, most simply registered “unsure,” reflecting the unsettled requirements and timelines.

What’s on their horizon?

With 22 years of their careers behind them, a healthy percent of today’s CIOs forecast that they will stay in their current organizations; 44 percent say that in the next three to five years, they expect to be doing the same job. Yet, that leaves a majority who are possibly scanning the career horizon for their next opportunity. Almost a third of the respondents (32 percent) indicate that they expect to move to another healthcare organization in that span. And, with more than two decades of professional experience under their belts, many of today’s healthcare CIOs expect to find their next opportunity as consultants. Either in their own consultancy (7.5 percent) or in an established firm (3.7 percent), a combined 11 percent look like they’ll take a shot at leveraging their experience beyond one healthcare organization.

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