SHELDON I. DORENFEST THE DORENFEST GROUP CEIBS Hospital Management Program CEIBS Hospital Management Program USING THE U.S. EXPERIENCE TO IMPROVE H.I.T

SHELDON I. DORENFESTSHELDON I. DORENFEST THE DORENFEST GROUPTHE DORENFEST GROUP

CEIBS Hospital Management ProgramCEIBS Hospital Management Program

USING THE U.S. EXPERIENCEUSING THE U.S. EXPERIENCETO IMPROVE H.I.T. INVESTMENT TO IMPROVE H.I.T. INVESTMENT RESULTS IN CHINARESULTS IN CHINA

SHANGHAI, CHINA JANUARY 14, 2007

SHELDON I. DORENFESTSHELDON I. DORENFEST 2 THE DORENFEST GROUPTHE DORENFEST GROUP

AGENDAAGENDA

SHELDON’S BACKGROUND AND CHINA BUSINESS APPROACHSHELDON’S BACKGROUND AND CHINA BUSINESS APPROACH

THE U.S. HEALTHCARE INDUSTRY AND ITS USE OF INFORMATION TECHNOLOGYTHE U.S. HEALTHCARE INDUSTRY AND ITS USE OF INFORMATION TECHNOLOGY

OVERVIEW OF H.I.T. STATUS IN CHINAOVERVIEW OF H.I.T. STATUS IN CHINA

A GOOD APPROACH TO SUCCESSFULLY IMPLEMENTING MAJOR I.T. SYSTEM A GOOD APPROACH TO SUCCESSFULLY IMPLEMENTING MAJOR I.T. SYSTEM UPGRADESUPGRADES

DISCUSSIONDISCUSSION


BRIEF SUMMARY OF SHELDON’S EXPERIENCE IN H.I.T.BRIEF SUMMARY OF SHELDON’S EXPERIENCE IN H.I.T.

FORMED COMPUCARE 1969; CEO 1969-1976FORMED COMPUCARE 1969; CEO 1969-1976

FORMED SHELDON I. DORENFEST & ASSOCIATES, LTD. IN 1976; CEO 1976-2004FORMED SHELDON I. DORENFEST & ASSOCIATES, LTD. IN 1976; CEO 1976-2004

– LONG, RICH HISTORY OF MAJOR CONTRIBUTIONS TO HEALTHCARE I.T. LONG, RICH HISTORY OF MAJOR CONTRIBUTIONS TO HEALTHCARE I.T. UNDERSTANDING AND PROGRESSUNDERSTANDING AND PROGRESS

– WAS RECOGNIZED AS THE LEADING SOURCE OF INFORMATION ABOUT WAS RECOGNIZED AS THE LEADING SOURCE OF INFORMATION ABOUT HEALTHCARE I.T. AND A LEADING HEALTHCARE CONSULTING FIRMHEALTHCARE I.T. AND A LEADING HEALTHCARE CONSULTING FIRM

– KEY BUSINESS UNITS INCLUDED THE DORENFEST INTEGRATED KEY BUSINESS UNITS INCLUDED THE DORENFEST INTEGRATED HEALTHCARE SYSTEM DATABASE™ AND HOSPITAL OPERATIONS HEALTHCARE SYSTEM DATABASE™ AND HOSPITAL OPERATIONS IMPROVEMENT AND MEDICAL SUPPLIER CONSULTINGIMPROVEMENT AND MEDICAL SUPPLIER CONSULTING

SOLD THE DORENFEST INTEGRATED HEALTHCARE DELIVERY SYSTEM+ (IHDS+) SOLD THE DORENFEST INTEGRATED HEALTHCARE DELIVERY SYSTEM+ (IHDS+) DATABASE™ TO HIMSS ANALYTICS IN JULY, 2004DATABASE™ TO HIMSS ANALYTICS IN JULY, 2004


DORENFEST ACTIVITIES IN OTHER COUNTRIESDORENFEST ACTIVITIES IN OTHER COUNTRIES

CONDUCT MARKET STUDIES AND CONSULTING ASSIGNMENTS ON USE OF CONDUCT MARKET STUDIES AND CONSULTING ASSIGNMENTS ON USE OF INFORMATION TECHNOLOGY IN HEALTH CARE IN A NUMBER OF COUNTRIESINFORMATION TECHNOLOGY IN HEALTH CARE IN A NUMBER OF COUNTRIES

CONDUCT WORLDWIDE STUDIES COMPARING THE STATE OF THE ART IN CONDUCT WORLDWIDE STUDIES COMPARING THE STATE OF THE ART IN HEALTH CARE I.T.HEALTH CARE I.T.

CONTINUOUSLY MONITOR AND UPDATE OUR UNDERSTANDING OF CONTINUOUSLY MONITOR AND UPDATE OUR UNDERSTANDING OF WORLDWIDE HEALTH CARE I.T. THROUGH A VARIETY OF ONGOING WORLDWIDE HEALTH CARE I.T. THROUGH A VARIETY OF ONGOING ACTIVITIES:ACTIVITIES:

– IN-PERSON AND TELEPHONE DISCUSSIONS WITH NUMEROUS HOSPITAL IN-PERSON AND TELEPHONE DISCUSSIONS WITH NUMEROUS HOSPITAL EXECUTIVES AND I.T. SUPPLIER PERSONNELEXECUTIVES AND I.T. SUPPLIER PERSONNEL

– REVIEW OF I.T. IN USE AT HOSPITALS THROUGHOUT THE WORLDREVIEW OF I.T. IN USE AT HOSPITALS THROUGHOUT THE WORLD

WORLDWIDE EDUCATIONAL SERVICESWORLDWIDE EDUCATIONAL SERVICES


BRIEF SUMMARY OF SHELDON’S EXPERIENCE IN H.I.T. (CONTINUED) BRIEF SUMMARY OF SHELDON’S EXPERIENCE IN H.I.T. (CONTINUED)

DONATED SHELDON I. DORENFEST & ASSOCIATES, LTD. TO THE HIMSS FOUNDATION TO DONATED SHELDON I. DORENFEST & ASSOCIATES, LTD. TO THE HIMSS FOUNDATION TO FORM THE DORENFEST INSTITUTE FOR HEALTH INFORMATION TECHNOLOGY RESEARCH FORM THE DORENFEST INSTITUTE FOR HEALTH INFORMATION TECHNOLOGY RESEARCH AND EDUCATIONAND EDUCATION

– CONTAINS A LIBRARY OF HISTORIC DATA (FROM 1986 THROUGH 2002 WITH HIMSS CONTAINS A LIBRARY OF HISTORIC DATA (FROM 1986 THROUGH 2002 WITH HIMSS ANALYTICS DONATING THE NEXT CURRENT YEAR OF DATA ANNUALLY BEGINNING IN ANALYTICS DONATING THE NEXT CURRENT YEAR OF DATA ANNUALLY BEGINNING IN JULY 2005) AND PUBLICATIONSJULY 2005) AND PUBLICATIONS

– PROVIDES FREE DATA FOR RESEARCH PURPOSES ELECTRONICALLY AND IN PRINT PROVIDES FREE DATA FOR RESEARCH PURPOSES ELECTRONICALLY AND IN PRINT TO UNIVERSITIES, STUDENTS, FEDERAL, STATE, LOCAL GOVERNMENT AS WELL AS TO UNIVERSITIES, STUDENTS, FEDERAL, STATE, LOCAL GOVERNMENT AS WELL AS GOVERNMENTS OF OTHER COUNTRIES GOVERNMENTS OF OTHER COUNTRIES

– WILL PROVIDE A VARIETY OF REPORTS ON TRENDS IN H.I.T. USEWILL PROVIDE A VARIETY OF REPORTS ON TRENDS IN H.I.T. USE

– WILL ENCOURAGE ONGOING RESEARCH INTO USING I.T. TO IMPROVE HEALTHCAREWILL ENCOURAGE ONGOING RESEARCH INTO USING I.T. TO IMPROVE HEALTHCARE

PRESENT ACTIVITIESPRESENT ACTIVITIES

– HELPING HIMSS ANALYTICS IN TRANSITIONAL RELATIONSHIPHELPING HIMSS ANALYTICS IN TRANSITIONAL RELATIONSHIP

– FORMED THE DORENFEST GROUP IN SEPTEMBER 2004 AS AN INVESTMENT AND FORMED THE DORENFEST GROUP IN SEPTEMBER 2004 AS AN INVESTMENT AND CONSULTING BUSINESSCONSULTING BUSINESS

– FOCUSING ON INVESTING IN CHINA IN HOSPITAL AND HEALTHCARE IMPROVEMENT FOCUSING ON INVESTING IN CHINA IN HOSPITAL AND HEALTHCARE IMPROVEMENT BUSINESSESBUSINESSES


DORENFEST INVESTIGATION OF HEALTHCARE IN CHINADORENFEST INVESTIGATION OF HEALTHCARE IN CHINA

1.1. VISITED 17 CITIES IN CHINAVISITED 17 CITIES IN CHINA

2.2. VISITED WITH HUNDREDS OF LEADERS IN THE HEALTHCARE INDUSTRY IN CHINA TO LEARN VISITED WITH HUNDREDS OF LEADERS IN THE HEALTHCARE INDUSTRY IN CHINA TO LEARN ABOUT HEALTHCARE REFORM IN CHINA – ITS PROGRESS, ITS PROBLEMS, AND ITS NEXT ABOUT HEALTHCARE REFORM IN CHINA – ITS PROGRESS, ITS PROBLEMS, AND ITS NEXT STEPSSTEPS

3.3. VISITED WITH OVER 75 HOSPITALS TO GAIN AN UNDERSTANDING OF HOSPITAL OPERATIONS VISITED WITH OVER 75 HOSPITALS TO GAIN AN UNDERSTANDING OF HOSPITAL OPERATIONS IN CHINA, THEIR CURRENT STATUS, AND OPPORTUNITIES FOR IMPROVEMENTSIN CHINA, THEIR CURRENT STATUS, AND OPPORTUNITIES FOR IMPROVEMENTS

4.4. VISITED WITH SEVERAL PROVINCIAL AND CITY HEALTH BUREAUS TO LEARN WHAT THEIR VISITED WITH SEVERAL PROVINCIAL AND CITY HEALTH BUREAUS TO LEARN WHAT THEIR GOALS ARE FOR THEIR PROVINCIAL AND CITY HOSPITALSGOALS ARE FOR THEIR PROVINCIAL AND CITY HOSPITALS

5.5. VISITED SOME PRIVATE HOSPITALS TO OBSERVE THE RESULTS OF HEALTHCARE REFORM VISITED SOME PRIVATE HOSPITALS TO OBSERVE THE RESULTS OF HEALTHCARE REFORM PRIVATIZATION EFFORTS IN CHINAPRIVATIZATION EFFORTS IN CHINA

6.6. VISITED WITH COMPANIES SELLING PRODUCTS AND SERVICES TO THE HEALTHCARE VISITED WITH COMPANIES SELLING PRODUCTS AND SERVICES TO THE HEALTHCARE INDUSTRY IN CHINA AND WHAT THEY BELIEVE ARE APPROPRIATE NEXT STEPS FOR INDUSTRY IN CHINA AND WHAT THEY BELIEVE ARE APPROPRIATE NEXT STEPS FOR REFORMING THE CHINESE HEALTHCARE SYSTEMREFORMING THE CHINESE HEALTHCARE SYSTEM

7.7. EVALUATED A GROUP OF HOSPITAL MANAGEMENT AND OWNERSHIP OPPORTUNITIES THAT EVALUATED A GROUP OF HOSPITAL MANAGEMENT AND OWNERSHIP OPPORTUNITIES THAT WERE PRESENTED TO THE DORENFEST GROUP TO BECOME MORE FAMILIAR WITH THE WERE PRESENTED TO THE DORENFEST GROUP TO BECOME MORE FAMILIAR WITH THE ALTERNATIVE WAYS TO PROCEED IN BUILDING A “MODEL HOSPITAL” IN CHINAALTERNATIVE WAYS TO PROCEED IN BUILDING A “MODEL HOSPITAL” IN CHINA

8.8. DEVELOPED A STRATEGY FOR BRINGING DORENFEST SKILL AND EXPERIENCE TO CHINADEVELOPED A STRATEGY FOR BRINGING DORENFEST SKILL AND EXPERIENCE TO CHINA


THE DORENFEST GROUP VISION FOR CREATING A MODEL HOSPITAL IN CHINATHE DORENFEST GROUP VISION FOR CREATING A MODEL HOSPITAL IN CHINA

PROVIDES IMPROVED QUALITY OF CARE TO ITS PATIENTSPROVIDES IMPROVED QUALITY OF CARE TO ITS PATIENTS

OPERATES AT A HIGHLY EFFICIENT LEVEL THROUGH EFFECTIVE USE OF OPERATES AT A HIGHLY EFFICIENT LEVEL THROUGH EFFECTIVE USE OF SYSTEMS AND BETTER WORK PROCESSESSYSTEMS AND BETTER WORK PROCESSES

OFFERS ITS SERVICES TO PATIENTS AT AN AFFORDABLE COSTOFFERS ITS SERVICES TO PATIENTS AT AN AFFORDABLE COST

CREATES A HIGHLY SATISFIED PATIENT POPULATION WITH THE PATIENTS CREATES A HIGHLY SATISFIED PATIENT POPULATION WITH THE PATIENTS OBSERVING A NOTICEABLE IMPROVEMENT IN THE SERVICES AND OBSERVING A NOTICEABLE IMPROVEMENT IN THE SERVICES AND TREATMENTS PROVIDED BY THE HOSPITALTREATMENTS PROVIDED BY THE HOSPITAL

UTILIZES APPROPRIATE DIGITAL TECHNOLOGY TO CREATE A STATE OF THE UTILIZES APPROPRIATE DIGITAL TECHNOLOGY TO CREATE A STATE OF THE ART “DIGITAL HOSPITAL”ART “DIGITAL HOSPITAL”


CHINA BUSINESS OPERATIONSCHINA BUSINESS OPERATIONS

HOSPITAL MANAGEMENT CONSULTINGHOSPITAL MANAGEMENT CONSULTING

– OPERATIONS IMPROVEMENTOPERATIONS IMPROVEMENT

– STRATEGIC PLANNING FOR NEW I.T. SYSTEMSSTRATEGIC PLANNING FOR NEW I.T. SYSTEMS

– I.T. SYSTEM SELECTIONI.T. SYSTEM SELECTION

– I.T. SYSTEM IMPLEMENTATIONI.T. SYSTEM IMPLEMENTATION

– WORK PROCESS IMPROVEMENTWORK PROCESS IMPROVEMENT

– MANAGEMENT TRAININGMANAGEMENT TRAINING

– OTHER SERVICESOTHER SERVICES

GENERAL MANAGEMENT CONSULTING FOR HEALTHCARE COMPANIESGENERAL MANAGEMENT CONSULTING FOR HEALTHCARE COMPANIES

– MARKET ANALYSESMARKET ANALYSES

– PRODUCT STRATEGIESPRODUCT STRATEGIES

– MARKET RESEARCHMARKET RESEARCH

HOSPITAL CONTRACT MANAGEMENTHOSPITAL CONTRACT MANAGEMENT

– WORK WITH HOSPITALS NEEDING NEW MANAGEMENT (INTERIM OR WORK WITH HOSPITALS NEEDING NEW MANAGEMENT (INTERIM OR LONG TERM)LONG TERM)

– IMPLEMENT NECESSARY MANAGEMENT PERSONNEL AND SUPPORT SYSTEMSIMPLEMENT NECESSARY MANAGEMENT PERSONNEL AND SUPPORT SYSTEMS

HOSPITAL OWNERSHIP AND IMPROVEMENTHOSPITAL OWNERSHIP AND IMPROVEMENT


CURRENT STATUS OF DORENFEST GROUP CHINACURRENT STATUS OF DORENFEST GROUP CHINA

FORMED DE RUI YI LIAO ZI XUN, A WFOE BASED IN SHANGHAIFORMED DE RUI YI LIAO ZI XUN, A WFOE BASED IN SHANGHAI

RECENTLY COMPLETED PHASE I PROJECT TO HELP SHENZHEN HEALTH BUREAU RECENTLY COMPLETED PHASE I PROJECT TO HELP SHENZHEN HEALTH BUREAU PLAN ITS REGIONAL HEALTH NETWORK AND DIGITAL HOSPITAL PROJECTSPLAN ITS REGIONAL HEALTH NETWORK AND DIGITAL HOSPITAL PROJECTS

NOW BUILDING A MANAGEMENT TEAMNOW BUILDING A MANAGEMENT TEAM

CREATING OTHER PROJECT ACTIVITIESCREATING OTHER PROJECT ACTIVITIES

REVIEWING CANDIDATES TO IMPLEMENT MODEL HOSPITAL VISIONREVIEWING CANDIDATES TO IMPLEMENT MODEL HOSPITAL VISION

DEVELOPING PARTNERING RELATIONSHIPS TO DELIVER SERVICESDEVELOPING PARTNERING RELATIONSHIPS TO DELIVER SERVICES

REVIEWING SOFTWARE SYSTEMS IN CHINA AND OTHER COUNTRIES TO DEFINE THE REVIEWING SOFTWARE SYSTEMS IN CHINA AND OTHER COUNTRIES TO DEFINE THE BEST SOFTWARE AVAILABLE FOR IMPLEMENTATION IN CHINA TO PARTNER ON I.T. BEST SOFTWARE AVAILABLE FOR IMPLEMENTATION IN CHINA TO PARTNER ON I.T. PROJECTS FOR HOSPITAL CLIENTSPROJECTS FOR HOSPITAL CLIENTS


CEIBS HOSPITAL MANAGEMENT PROGRAMCEIBS HOSPITAL MANAGEMENT PROGRAM

THE U.S. HEALTHCARE INDUSTRY AND ITS USE THE U.S. HEALTHCARE INDUSTRY AND ITS USE

OF INFORMATION TECHNOLOGYOF INFORMATION TECHNOLOGY


HEALTHCARE COST AS A PERCENT OF GDPHEALTHCARE COST AS A PERCENT OF GDP

SOURCE: CENTERS FOR MEDICARE AND MEDICAID SERVICESSOURCE: CENTERS FOR MEDICARE AND MEDICAID SERVICES

7.2%

8.8%

10.1%

12.0%

13.4% 13.3%

16.0%

0%

5%

10%

15%

20%

1970 1975 1980 1985 1990 1995 2000 2004

$1,877.6

$75.1

$245.8

$426.8

$696.0

$990.3 $1,299.515%

10%

5%

0%

20%


OPPORTUNITIES TO IMPROVE THE HEALTHCARE DELIVERY PROCESSOPPORTUNITIES TO IMPROVE THE HEALTHCARE DELIVERY PROCESSHAVE BEEN PURSUED FOR MANY YEARSHAVE BEEN PURSUED FOR MANY YEARS

GREAT REDUNDANCY OF INFORMATIONGREAT REDUNDANCY OF INFORMATION

HIGH ERROR POTENTIALHIGH ERROR POTENTIAL

LACK OF TIMELINESSLACK OF TIMELINESS

HIGH COSTHIGH COST

ORGANIZATION COMPLEXITYORGANIZATION COMPLEXITY


4 GENERATIONS OF I.T. SYSTEMS IN U.S. HOSPITALS4 GENERATIONS OF I.T. SYSTEMS IN U.S. HOSPITALS

FINANCE SYSTEMS (1970s)FINANCE SYSTEMS (1970s)

LIMITED CLINICAL SYSTEMS (LATE 1970s AND 1980s)LIMITED CLINICAL SYSTEMS (LATE 1970s AND 1980s)

MORE ADVANCED CLINICAL SYSTEMS (1990s)MORE ADVANCED CLINICAL SYSTEMS (1990s)

ELECTRONIC HEALTH RECORDS (2000s)ELECTRONIC HEALTH RECORDS (2000s)


$ in billions

$16.0

$19.0$21.6

$20.0

Actual

$18.5

17.6% 15.6% 2.7%ANNUALGROWTH RATE: 8.0%5.2%

$23.6$25.8

Forecast 2006

9.3% 9.3%

$28.0

8.9%

$30.5

8.9%

H.I.T. MARKET TRENDS ($ IN BILLIONS)H.I.T. MARKET TRENDS ($ IN BILLIONS)

$13.6

17.2%

$11.6$10.0

$8.5$7.5

16.0%17.6%13.3%6.7%

SOURCE: SHELDON I. DORENFEST & ASSOCIATES, LTD.SOURCE: SHELDON I. DORENFEST & ASSOCIATES, LTD.


HEALTHCARE REFORM BROUGHT HEALTHCARE REFORM BROUGHT INTEGRATED DELIVERYINTEGRATED DELIVERY AND MANAGED CAREAND MANAGED CARE

Hospital A

Doctor’s Office Doctor’s Office

GovernmentReimbursement

Blood BankHome Health Agency

Hospital B

Patient DataDoctor’s Office

Insurance Payor

Nursing Home

Outpatient Clinic

Outpatient Clinic

Outpatient Clinic


HOW DID SOFTWARE SUPPLIERS DESCRIBE THEIR PRODUCTS IN THE 1990s?HOW DID SOFTWARE SUPPLIERS DESCRIBE THEIR PRODUCTS IN THE 1990s?

ApplicationA

ApplicationB

ApplicationF

InterfaceEngine

LAN/GUI

Work-station

Work-station

User link to repositories

Data EntryData AccessLocal Analysis

Other providers and companies

ClinicalData

RepositoryRulesProtocolsTranslatingFormatting

Other providers and companies


HOW DID SOFTWARE SUPPLIERS DESCRIBE THEIR PRODUCTS IN THE 1990s? HOW DID SOFTWARE SUPPLIERS DESCRIBE THEIR PRODUCTS IN THE 1990s?

ApplicationA

ApplicationB

ApplicationC

ApplicationD

ApplicationE

ApplicationF

InterfaceEngine

LAN/GUI

PrimaryVendor

OtherVendors

Work-station

Work-station

Work-station

Work-station

User link to repositories

Data EntryData AccessLocal Analysis

Other providers and companiesOther providers and companies

OtherData

Repositories

ClinicalData

Repository

Key:

RulesProtocolsTranslatingFormatting


WHAT IS TODAY’S TYPICAL SITUATION AT USER SITES?WHAT IS TODAY’S TYPICAL SITUATION AT USER SITES?

STILL MANY MANUAL RECORDSSTILL MANY MANUAL RECORDS

ERROR PRONE WORK PROCESSESERROR PRONE WORK PROCESSES

POOR IMPLEMENTATION AND USE OF I.T. HAS RESULTED IN A LARGE AMOUNT POOR IMPLEMENTATION AND USE OF I.T. HAS RESULTED IN A LARGE AMOUNT OF WORK PROCESS CONVOLUTIONS, TANGLES, REDUNDANCY, AND OF WORK PROCESS CONVOLUTIONS, TANGLES, REDUNDANCY, AND DUPLICATIONDUPLICATION

LEGACY SYSTEMS IN PLACE ARE VERY OLDLEGACY SYSTEMS IN PLACE ARE VERY OLD

OVERSIMPLIFICATION OF AND MISUNDERSTANDING ABOUT WHAT TO DO OVERSIMPLIFICATION OF AND MISUNDERSTANDING ABOUT WHAT TO DO NEXTNEXT


U.S. HAS MADE MUCH PROGRESSU.S. HAS MADE MUCH PROGRESS

TODAY OVER 100 HOSPITALS HAVE IMPLEMENTED CPR WITH CPOETODAY OVER 100 HOSPITALS HAVE IMPLEMENTED CPR WITH CPOE

MANY OTHERS ARE IMPLEMENTING CPR AND CPOE RIGHT NOWMANY OTHERS ARE IMPLEMENTING CPR AND CPOE RIGHT NOW

I.T. IS A MAJOR TOOL FOR IMPROVING HOSPITAL PERFORMANCEI.T. IS A MAJOR TOOL FOR IMPROVING HOSPITAL PERFORMANCE


BUT U.S. HOSPITALS HAVE BEEN INEFFICIENT INVESTORSBUT U.S. HOSPITALS HAVE BEEN INEFFICIENT INVESTORS

OVERSIMPLIFICATION OF I.T. INVESTMENT CONSIDERATIONS (I.E., DID NOT OVERSIMPLIFICATION OF I.T. INVESTMENT CONSIDERATIONS (I.E., DID NOT KNOW WHAT THEY DID NOT KNOW)KNOW WHAT THEY DID NOT KNOW)

POOR PROJECT PLANNINGPOOR PROJECT PLANNING

IMPROPER ASSESSMENT OF SOFTWARE PRODUCT CAPABILITIESIMPROPER ASSESSMENT OF SOFTWARE PRODUCT CAPABILITIES

IMPLEMENTED A SERIES OF “1/2 SYSTEMS” WITHOUT PROPERLY IMPLEMENTED A SERIES OF “1/2 SYSTEMS” WITHOUT PROPERLY REDESIGNING THE WORK PROCESSREDESIGNING THE WORK PROCESS

INDUSTRY MANAGEMENT DID NOT LEARN ENOUGH FROM PAST MISTAKES, INDUSTRY MANAGEMENT DID NOT LEARN ENOUGH FROM PAST MISTAKES, AND THEREFORE, CONTINUED TO REPEAT THE SAME MISTAKESAND THEREFORE, CONTINUED TO REPEAT THE SAME MISTAKES

THIS LEFT THE NATION WITH REDUNDANT, CONVOLUTED, EXPENSIVE, ERROR THIS LEFT THE NATION WITH REDUNDANT, CONVOLUTED, EXPENSIVE, ERROR PRONE WORK PROCESSES THAT PRESENTLY CRIPPLE THE COUNTRY’S PRONE WORK PROCESSES THAT PRESENTLY CRIPPLE THE COUNTRY’S HEALTHCARE SYSTEMHEALTHCARE SYSTEM


THE KEY DRIVERS OF U.S. H.I.T. MARKET GROWTH IN 2004-2005THE KEY DRIVERS OF U.S. H.I.T. MARKET GROWTH IN 2004-2005

COMPUTERIZED PATIENT RECORDS (CPR/EMR/EHR)COMPUTERIZED PATIENT RECORDS (CPR/EMR/EHR)

COMPUTERIZED PHYSICIAN ORDER ENTRY (CPOE)COMPUTERIZED PHYSICIAN ORDER ENTRY (CPOE)

MEDICATION MANAGEMENT SYSTEMSMEDICATION MANAGEMENT SYSTEMS

PATIENT SAFETY IMPROVEMENTSPATIENT SAFETY IMPROVEMENTS

– REDUCING MEDICAL ERRORSREDUCING MEDICAL ERRORS

– IMPROVING CLINICAL WORK PROCESSESIMPROVING CLINICAL WORK PROCESSES

PICTURE ARCHIVING COMPUTER SYSTEMS (PACS)PICTURE ARCHIVING COMPUTER SYSTEMS (PACS)

SPECIALTY DEPARTMENT INFORMATION SYSTEMSSPECIALTY DEPARTMENT INFORMATION SYSTEMS

– EMERGENCY DEPARTMENT (EDIS)EMERGENCY DEPARTMENT (EDIS) –– SURGERY (SIS)SURGERY (SIS)

– PHARMACY (PIS)PHARMACY (PIS) –– RADIOLOGY (RIS)RADIOLOGY (RIS)

– NUMEROUS OTHER CLINICAL AND FINANCIAL SYSTEMSNUMEROUS OTHER CLINICAL AND FINANCIAL SYSTEMS

PATIENT DATA SECURITY (HIPAA, ETC)PATIENT DATA SECURITY (HIPAA, ETC)

RHIOs EMERGE TO SHARE ELECTRONIC PATIENT DATARHIOs EMERGE TO SHARE ELECTRONIC PATIENT DATA



OVERVIEW OF OVERVIEW OF H.I.T. STATUS IN CHINAH.I.T. STATUS IN CHINA


INTRODUCTION TO CHINAINTRODUCTION TO CHINA

WHEN I FIRST CAME TO STUDY THE HEALTHCARE INDUSTRY IN CHINA IN LATE 2004, WHEN I FIRST CAME TO STUDY THE HEALTHCARE INDUSTRY IN CHINA IN LATE 2004, ATTITUDES TOWARD H.I.T. WERE VERY CONSERVATIVE:ATTITUDES TOWARD H.I.T. WERE VERY CONSERVATIVE:

– HOSPITAL MANAGEMENT WAS NOT HAPPY WITH I.T. SYSTEMS IN USEHOSPITAL MANAGEMENT WAS NOT HAPPY WITH I.T. SYSTEMS IN USE

– FUNCTIONALITY OF APPLICATION SOFTWARE AVAILABLE FOR PURCHASE IN FUNCTIONALITY OF APPLICATION SOFTWARE AVAILABLE FOR PURCHASE IN CHINA WAS VERY LIMITED AND THE MOST FUNCTIONAL SYSTEMS WERE CHINA WAS VERY LIMITED AND THE MOST FUNCTIONAL SYSTEMS WERE SELF-DEVELOPEDSELF-DEVELOPED

– THE SKILLS TO MANAGE MAJOR I.T. UPGRADES WERE FELT TO BE IN SHORT THE SKILLS TO MANAGE MAJOR I.T. UPGRADES WERE FELT TO BE IN SHORT SUPPLYSUPPLY

– AS A RESULT, HOSPITAL MANAGEMENT WAS HESITANT TO MAKE MAJOR AS A RESULT, HOSPITAL MANAGEMENT WAS HESITANT TO MAKE MAJOR UPGRADES TO I.T. SYSTEMSUPGRADES TO I.T. SYSTEMS

– AT THAT TIME, THERE WAS VERY LIMITED BUYING OF MAJOR NEW I.T. AT THAT TIME, THERE WAS VERY LIMITED BUYING OF MAJOR NEW I.T. SYSTEMS IN CHINESE HOSPITALSSYSTEMS IN CHINESE HOSPITALS

DURING THE PAST 2 YEARS, THE SITUATION HAS CHANGEDDURING THE PAST 2 YEARS, THE SITUATION HAS CHANGED

– MANY HOSPITALS ARE CONSIDERING MAJOR UPGRADES OF I.T. SYSTEMSMANY HOSPITALS ARE CONSIDERING MAJOR UPGRADES OF I.T. SYSTEMS

– BIG BUDGETS ARE STARTING TO BECOME AVAILABLE TO MOVE TOWARD BIG BUDGETS ARE STARTING TO BECOME AVAILABLE TO MOVE TOWARD DIGITAL HOSPITALS WITH ELECTRONIC MEDICAL RECORDS, PACS AND DIGITAL HOSPITALS WITH ELECTRONIC MEDICAL RECORDS, PACS AND OTHER SYSTEMSOTHER SYSTEMS

– BUT WEAK APPLICATION SOFTWARE AND IMPLEMENTATION SKILLS ARE BUT WEAK APPLICATION SOFTWARE AND IMPLEMENTATION SKILLS ARE DELAYING PROGRESSDELAYING PROGRESS


CHINA HEALTHCARE AND I.T. USE HAS SIMILARITIES TO THE U.S. IN THE 1970sCHINA HEALTHCARE AND I.T. USE HAS SIMILARITIES TO THE U.S. IN THE 1970s

CHINA SPENDS 6.0% OF ITS GDP ON HEALTHCARE (800 BILLION RMB OR CHINA SPENDS 6.0% OF ITS GDP ON HEALTHCARE (800 BILLION RMB OR APPROXIMATELY $100 BILLION) COMPARED TO U.S. SPENDING ON APPROXIMATELY $100 BILLION) COMPARED TO U.S. SPENDING ON HEALTHCARE IN 1970 OF 7% GDP ($75 BILLION)HEALTHCARE IN 1970 OF 7% GDP ($75 BILLION)

MOST HOSPITALS IN CHINA USE I.T. SOFTWARE FOR FINANCIAL SYSTEMSMOST HOSPITALS IN CHINA USE I.T. SOFTWARE FOR FINANCIAL SYSTEMS

I.T. USE IN CLINICAL SYSTEMS HAS EMERGED ON A DEPARTMENTAL BASISI.T. USE IN CLINICAL SYSTEMS HAS EMERGED ON A DEPARTMENTAL BASIS

SOME HOSPITALS HAVE ACCOMPLISHED MORE ADVANCED SYSTEMS WITH SOME HOSPITALS HAVE ACCOMPLISHED MORE ADVANCED SYSTEMS WITH MUCH CLINICAL FUNCTION AUTOMATED USUALLY THROUGH USE OF SELF-MUCH CLINICAL FUNCTION AUTOMATED USUALLY THROUGH USE OF SELF-DEVELOPED SOFTWAREDEVELOPED SOFTWARE

POOR INTEGRATION OF DIVERSE SOFTWARE SYSTEMS CREATES PROBLEMS POOR INTEGRATION OF DIVERSE SOFTWARE SYSTEMS CREATES PROBLEMS AS I.T. USE EXPANDSAS I.T. USE EXPANDS

THE HARDWARE AND NETWORKING CAPABILITY AVAILABLE TO HOSPITALS IN THE HARDWARE AND NETWORKING CAPABILITY AVAILABLE TO HOSPITALS IN 2005 IS MUCH BETTER THAN IT WAS IN 1970s IN THE U.S. BUT SOFTWARE 2005 IS MUCH BETTER THAN IT WAS IN 1970s IN THE U.S. BUT SOFTWARE AVAILABLE FOR CHINESE HOSPITALS TO AUTOMATE CLINICAL PROCESSES IS AVAILABLE FOR CHINESE HOSPITALS TO AUTOMATE CLINICAL PROCESSES IS IN ITS INFANCYIN ITS INFANCY


CHINA HEALTHCARE AND I.T. USE HAS SIMILARITIES TO THE U.S. IN THE 1970sCHINA HEALTHCARE AND I.T. USE HAS SIMILARITIES TO THE U.S. IN THE 1970s(Continued)(Continued)

CHINA HOSPITAL WORK PROCESSES ARE REDUNDANT AND ERROR PRONE CHINA HOSPITAL WORK PROCESSES ARE REDUNDANT AND ERROR PRONE WITH GREAT OPPORTUNITIES FOR IMPROVEMENT THROUGH APPROPRIATE WITH GREAT OPPORTUNITIES FOR IMPROVEMENT THROUGH APPROPRIATE USE OF I.T.USE OF I.T.

CHINESE HOSPITALS WOULD LIKE TO TAKE A BIG LEAP FORWARD IN CHINESE HOSPITALS WOULD LIKE TO TAKE A BIG LEAP FORWARD IN IMPROVING WORK PROCESSES AND IN DIGITIZING ITS HOSPITALSIMPROVING WORK PROCESSES AND IN DIGITIZING ITS HOSPITALS

THE MINISTRY OF HEALTH’S GUIDELINES FOR HEALTH I.T. DEVELOPMENT THE MINISTRY OF HEALTH’S GUIDELINES FOR HEALTH I.T. DEVELOPMENT (2003-2010) CALLS FOR ELECTRONIC MEDICAL RECORDS AND REGIONAL (2003-2010) CALLS FOR ELECTRONIC MEDICAL RECORDS AND REGIONAL HEALTH NETWORKS TO BE IMPLEMENTED PROVIDING MUCH MOMENTUM FOR HEALTH NETWORKS TO BE IMPLEMENTED PROVIDING MUCH MOMENTUM FOR HOSPITALS AND HEALTH BUREAUS TO INVEST MORE IN I.T. NOWHOSPITALS AND HEALTH BUREAUS TO INVEST MORE IN I.T. NOW

CHINA HAS NOT INVESTED A LOT OF RESOURCES IN I.T. SYSTEMS AND CHINA HAS NOT INVESTED A LOT OF RESOURCES IN I.T. SYSTEMS AND INFRASTRUCTURE TO GET TO ITS PRESENT LEVEL OF I.T. USE. WHILE CHINA INFRASTRUCTURE TO GET TO ITS PRESENT LEVEL OF I.T. USE. WHILE CHINA WOULD LIKE TO CONTINUE THIS APPROACH AS IT TAKES ITS NEXT STEPS WOULD LIKE TO CONTINUE THIS APPROACH AS IT TAKES ITS NEXT STEPS FORWARD, CHINA’S I.T. GOALS WILL REQUIRE GREATER INVESTMENTFORWARD, CHINA’S I.T. GOALS WILL REQUIRE GREATER INVESTMENT


CHINA HEALTHCARE AND I.T. USE HAS SIMILARITIES TO THE U.S. IN THE 1970sCHINA HEALTHCARE AND I.T. USE HAS SIMILARITIES TO THE U.S. IN THE 1970s(Continued)(Continued)

THERE IS CONCERN AMONG H.I.T. EXPERTS IN CHINA ABOUT THE READINESS OF THERE IS CONCERN AMONG H.I.T. EXPERTS IN CHINA ABOUT THE READINESS OF H.I.T. SOFTWARE PRODUCTS, HARDWARE PLATFORMS, AND INTEGRATION TOOLS H.I.T. SOFTWARE PRODUCTS, HARDWARE PLATFORMS, AND INTEGRATION TOOLS TO FACILITATE THE ACCOMPLISHMENT OF CHINA’S GOALSTO FACILITATE THE ACCOMPLISHMENT OF CHINA’S GOALS

THERE IS ALSO DEVELOPING CONCERN AMONG H.I.T. EXPERTS IN CHINA ABOUT THERE IS ALSO DEVELOPING CONCERN AMONG H.I.T. EXPERTS IN CHINA ABOUT THE IMPLEMENTATION SKILL AND EXPERIENCE AVAILABLE IN CHINA TO TAKE THIS THE IMPLEMENTATION SKILL AND EXPERIENCE AVAILABLE IN CHINA TO TAKE THIS BIG LEAP FORWARD THAT IS NOW UNDERWAYBIG LEAP FORWARD THAT IS NOW UNDERWAY

SO CHINESE HOSPITALS AND HEALTH BUREAUS ARE CAREFULLY CONSIDERING SO CHINESE HOSPITALS AND HEALTH BUREAUS ARE CAREFULLY CONSIDERING HOW TO TAKE THEIR NEXT STEPS SUCCESSFULLYHOW TO TAKE THEIR NEXT STEPS SUCCESSFULLY

FOR CHINA TO ACCOMPLISH ITS OBJECTIVE SUCCESSFULLY REQUIRES THE FOR CHINA TO ACCOMPLISH ITS OBJECTIVE SUCCESSFULLY REQUIRES THE FOLLOWING:FOLLOWING:

– OVERCOMING RESISTANCE TO CHANGEOVERCOMING RESISTANCE TO CHANGE

– KNOWING HOW TO MANAGE CHANGEKNOWING HOW TO MANAGE CHANGE

– LEARNING FROM THE U.S. EXPERIENCELEARNING FROM THE U.S. EXPERIENCE

– DOING MORE OF WHAT THE U.S. DID RIGHT AND NOT MAKING U.S. MISTAKES DOING MORE OF WHAT THE U.S. DID RIGHT AND NOT MAKING U.S. MISTAKES

– DEVELOPING EXPERTISE IN AREAS OF NEED DEVELOPING EXPERTISE IN AREAS OF NEED



A GOOD APPROACH TO SUCCESSFULLY A GOOD APPROACH TO SUCCESSFULLY IMPLEMENTING MAJOR I.T. UPGRADESIMPLEMENTING MAJOR I.T. UPGRADES


THE PROJECT SHOULD BE DONE IN PHASESTHE PROJECT SHOULD BE DONE IN PHASES

1.1. STRATEGIC PLANSTRATEGIC PLAN

2.2. SYSTEM SELECTION WITH FINAL IMPLEMENTATION PLANSYSTEM SELECTION WITH FINAL IMPLEMENTATION PLAN

3.3. SYSTEM IMPLEMENTATIONSYSTEM IMPLEMENTATION


STRATEGIC PLANNING PHASESTRATEGIC PLANNING PHASE

1.1. ESTABLISH A PLANNING COMMITTEEESTABLISH A PLANNING COMMITTEE

2.2. GAIN THOROUGH UNDERSTANDING OF THE CURRENT OPERATIONS AND GAIN THOROUGH UNDERSTANDING OF THE CURRENT OPERATIONS AND WORK FLOW OF THE HOSPITALWORK FLOW OF THE HOSPITAL

3.3. IDENTIFY OPPORTUNITIES TO IMPROVE OPERATIONS AND WORK FLOW IDENTIFY OPPORTUNITIES TO IMPROVE OPERATIONS AND WORK FLOW THROUGH NEW I.T. SYSTEMSTHROUGH NEW I.T. SYSTEMS

4.4. DEFINE THE VALUE OF THE OPPORTUNITIES FOR IMPROVEMENT IN TERMS OF DEFINE THE VALUE OF THE OPPORTUNITIES FOR IMPROVEMENT IN TERMS OF THE FOLLOWING AREAS:THE FOLLOWING AREAS:

− REVENUE IMPROVEMENTREVENUE IMPROVEMENT

− TIME SAVINGSTIME SAVINGS

− OTHER COST REDUCTIONOTHER COST REDUCTION

− REDUCTION OF ERRORSREDUCTION OF ERRORS

− OTHER QUALITY OF CARE IMPROVEMENTSOTHER QUALITY OF CARE IMPROVEMENTS

− RAISING LEVEL OF PATIENT SATISFACTIONRAISING LEVEL OF PATIENT SATISFACTION

5.5. SELECT THE HIGHEST PRIORITY IMPROVEMENTS FOR IMPLEMENTATIONSELECT THE HIGHEST PRIORITY IMPROVEMENTS FOR IMPLEMENTATION

6.6. DEFINE THE NEEDED I.T. SYSTEMS AND CHANGES IN WORK FLOW DEFINE THE NEEDED I.T. SYSTEMS AND CHANGES IN WORK FLOW PROCESSES TO ACCOMPLISH THE IMPROVEMENTSPROCESSES TO ACCOMPLISH THE IMPROVEMENTS

7.7. DEFINE USER ATTITUDES TOWARD AND TECHNICAL LIMITATIONS OF DEFINE USER ATTITUDES TOWARD AND TECHNICAL LIMITATIONS OF CURRENT I.T. SYSTEMS AND DETERMINE REPLACEMENT REQUIREMENTSCURRENT I.T. SYSTEMS AND DETERMINE REPLACEMENT REQUIREMENTS


STRATEGIC PLANNING PHASE (CONTINUED)STRATEGIC PLANNING PHASE (CONTINUED)

8.8. DECIDE WHETHER TO BUY OR DEVELOP THE I.T. SYSTEM UPGRADEDECIDE WHETHER TO BUY OR DEVELOP THE I.T. SYSTEM UPGRADE

9.9. PROVIDE THE NECESSARY EDUCATION TO HOSPITAL MANAGEMENT, PROVIDE THE NECESSARY EDUCATION TO HOSPITAL MANAGEMENT, PHYSICIANS, I.T. USERS, AND I.T. STAFF SO THAT THEY CAN BETTER PHYSICIANS, I.T. USERS, AND I.T. STAFF SO THAT THEY CAN BETTER UNDERSTAND THE REQUIREMENTS TO SUCCESSFULLY MANAGE THE CHANGEUNDERSTAND THE REQUIREMENTS TO SUCCESSFULLY MANAGE THE CHANGE

10.10. CREATE AN ECONOMIC ANALYSIS SUMMARIZING EXPECTED COSTS AND CREATE AN ECONOMIC ANALYSIS SUMMARIZING EXPECTED COSTS AND BENEFITS OF THE CHANGE PROGRAMBENEFITS OF THE CHANGE PROGRAM

11.11. GAIN GENERAL APPROVAL FROM HOSPITAL MANAGEMENT TEAMGAIN GENERAL APPROVAL FROM HOSPITAL MANAGEMENT TEAM

12.12. FINALIZE A STRATEGIC PLAN TO IMPLEMENT THE OPERATIONS IMPROVEMENT FINALIZE A STRATEGIC PLAN TO IMPLEMENT THE OPERATIONS IMPROVEMENT PROGRAMPROGRAM


SYSTEM SELECTION AND IMPLEMENTATION PLAN PHASESYSTEM SELECTION AND IMPLEMENTATION PLAN PHASE

1.1. ESTABLISH A SELECTION COMMITTEE OF KEY USERS, I.T. PERSONNEL, AND ESTABLISH A SELECTION COMMITTEE OF KEY USERS, I.T. PERSONNEL, AND MANAGEMENTMANAGEMENT

2.2. PREPARE A FUNCTIONAL REQUIREMENTS DOCUMENT DEFINING THE OBJECTIVES, PREPARE A FUNCTIONAL REQUIREMENTS DOCUMENT DEFINING THE OBJECTIVES, FEATURES, TECHNICAL REQUIREMENTS, AND ANY OTHER KEY CHARACTERISTICS FEATURES, TECHNICAL REQUIREMENTS, AND ANY OTHER KEY CHARACTERISTICS OF THE NEW SYSTEMOF THE NEW SYSTEM

3.3. PREPARE A TENDER REQUEST (REQUEST FOR VENDOR PROPOSALS)PREPARE A TENDER REQUEST (REQUEST FOR VENDOR PROPOSALS)

4.4. DEVELOP EVALUATION CRITERIA AND APPROACHDEVELOP EVALUATION CRITERIA AND APPROACH

5.5. COMPARE AND EVALUATE PROPOSALSCOMPARE AND EVALUATE PROPOSALS

6.6. FOR LEADING SUPPLIERS:FOR LEADING SUPPLIERS:

–– CONDUCT VENDOR SYSTEM DEMONSTRATIONS USING PREPARED CONDUCT VENDOR SYSTEM DEMONSTRATIONS USING PREPARED SCRIPTSSCRIPTS

–– CONDUCT TELEPHONE REFERENCE CHECKSCONDUCT TELEPHONE REFERENCE CHECKS

–– CONDUCT USER SITE VISITSCONDUCT USER SITE VISITS


SYSTEM SELECTION AND IMPLEMENTATION PLAN PHASE (CONTINUED)SYSTEM SELECTION AND IMPLEMENTATION PLAN PHASE (CONTINUED)

7.7. MAKE FINAL SELECTIONMAKE FINAL SELECTION

8.8. BEGIN NEGOTIATING CONTRACTBEGIN NEGOTIATING CONTRACT

9.9. DEVELOP DETAILED IMPLEMENTATION PLAN WITH OVERALL GOALS, DEVELOP DETAILED IMPLEMENTATION PLAN WITH OVERALL GOALS, ORGANIZATIONAL REQUIREMENTS, SPECIFIC TASKS, TIMETABLE BY TASK, ORGANIZATIONAL REQUIREMENTS, SPECIFIC TASKS, TIMETABLE BY TASK, AND STAFFING RESPONSIBILITY FOR EACH TASKAND STAFFING RESPONSIBILITY FOR EACH TASK

10.10. DEVELOP MANAGEMENT PROCESS FOR OVERSEEING THE IMPLEMENTATIONDEVELOP MANAGEMENT PROCESS FOR OVERSEEING THE IMPLEMENTATION

11.11. FINALIZE THE CONTRACTFINALIZE THE CONTRACT


SYSTEM IMPLEMENTATIONSYSTEM IMPLEMENTATION

START IMPLEMENTING PLANSTART IMPLEMENTING PLAN

MONITOR RESULTSMONITOR RESULTS

MAKE NECESSARY ADJUSTMENTS AND REVISIONSMAKE NECESSARY ADJUSTMENTS AND REVISIONS

KEEP A CLOSE WATCH ON PROGRESS TO MAKE SURE YOU AVOID MAJOR KEEP A CLOSE WATCH ON PROGRESS TO MAKE SURE YOU AVOID MAJOR PROBLEMSPROBLEMS


THANK YOU.THANK YOU.FOR MORE INFORMATION CONTACT:FOR MORE INFORMATION CONTACT:

SHELDON I. DORENFESTSHELDON I. DORENFEST

THE DORENFEST CHINA HEALTHCARE GROUPTHE DORENFEST CHINA HEALTHCARE GROUPJINGHAI ROAD NO. 3288, BUILDING 4, SUITE 3302JINGHAI ROAD NO. 3288, BUILDING 4, SUITE 3302

PUDONG, SHANGHAIPUDONG, SHANGHAI

PHONE: 13816109802PHONE: 13816109802

WEB SITE ADDRESS: WEB SITE ADDRESS: www.dorenfest.comwww.dorenfest.com

E-MAIL ADDRESS: E-MAIL ADDRESS: [email protected]@dorenfest.com

SHELDON’S E-MAIL ADDRESS: SHELDON’S E-MAIL ADDRESS: [email protected]@dorenfest.com

Documents

SHELDON I. DORENFEST THE DORENFEST GROUP CEIBS Hospital Management Program CEIBS Hospital Management Program USING THE U.S. EXPERIENCE TO IMPROVE H.I.T