Ed Marx on 'evidence-based budgeting'

Special report: At CHIME13, health IT leaders had money on their minds
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By Gienna Shaw

Health IT executives have given up too much power when it comes to IT budgets and finance, Edward Marx (pictured), CIO of Texas Health Resources, told the CHIME13 audience in Arizona last week during a session on surviving the economic downturn.

"If I look at the agendas of HIMSS and CHIME conferences, governance is always there, and you have to wonder: Why has somebody not figured it out yet?" said Marx, who also is a member of the FierceHealthIT advisory board.

"It's not so much about the right model," he said. "When I think about what's wrong with governance to today [the problem is that] we as leaders have abdicated our authority."

IT leaders can build great processes, continue to improve them and create alliances, he said. But there's a flip side to that. "Pretty soon, IT wasn't being run anymore by the business executive--myself--it was run by a bunch of people who have disparate interests."

To find the solution, Marx turned to the data and analytics other departments were using, and focused them on his department.

"We coined a new phrase called 'evidence-based budgeting.' We're taking the same capabilities of analytics and focusing on IT. And as a result, we've been able to identify ... what our actual expenses are," Marx said, whether tactical, operational or strategic.

"I can give you the exact dollar amount and amount of services that we do in each of those three buckets," he said. "I can tell you exactly how much it costs to run our electronic health record ... My entire budget is broken down by products."

The evidence-based approach takes emotion out of the process, Marx added, and allows him to talk to his peers about the products and their costs, so that when they call for cuts he can help them make decisions about how to do so.

"I can ask them 'which products are you willing to go without?'" he said. 

Marx's advice to fellow CIOs: "Take a step back. We are IT executives, business executives, and we are going to step up our game and lead. That's going to help us tremendously."