1) Create lists of case details that fit each side of the triangle.

Brief Synopsis

The case recounts a tale of how the health-care company CareGroup’s leading state-of-the-art information technology systems had abruptly collapsed for three and a half days, what actions they took to recover, and the invaluable lessons learned through them.

Background and Analysis

On October 1, 1996 three prominent hospitals in eastern Massachusetts merged together to form CareGroup. CareGroup was a group of health-care professionals that offered community-based primary care and a broad spectrum of specialty services. Merging hospitals had the opportunity to develop integrated services that could greatly improve the quality of health care as well as drive down costs.

An unforeseen achievement had been the development of an integrated IT system that linked the entire organization together. CareGroup became a leading innovator in IT not only recognized as the best in health care, but the finest in any industry.

2) Then look at each item and think about how that item affects the other sides of the triangle.

From a birds eye view the CareGroup IT systems were not only strong, but also the most advanced in the nation. The company enjoyed the best e-mail system, voice and wireless, data center and web-based infrastructure in healthcare. Their IT systems had handled 900,000 patient records dating back to 1977 and 3,000 physicians and 200 staff personnel processed 40 terabytes per day. CareGroup’s CIO John D. Halamka was also a key strength for the organization. His impressive resume and extraordinary background made him the most qualified CIO CareGroup could hope for.

Halamka explains that the reason why he’ve been successful is because I know all the technologies, I program in 12 languages, I written books on Unix system administration. I am a doctor, so I understand the clinical domain and the technical requirements. But as I tell people, my own blind spot—I’ve wired a telephone closet; I’ve built 100 servers, hundreds of desktops, but never built anything beyond a home network. It’s just the reality. But, I have now.

CareGroup’s weaknesses, which ultimately caused the network collapse, were revealed in the lessons learned from the catastrophic event. Prior to the crash, CareGroup’s belief that they had the most advanced network in the health care industry had inadvertently caused them to neglect the need to keep their IT system updated and controlled. CareGroup’s systems were completely controlled by one single switch, which was in turn controlled by one single person, who ultimately became the sole point of failure. The company did not have a group of people dedicated to monitoring and controlling the on-going changes to IT and their effects on the entire network.

3) Take a look at the industry. Compare the industry items with the case company items.

The merger that had formed CareGroup had given the organization the opportunity to integrate all of the individual hospital’s resources and broaden their quality of care. The company had realized that opportunity which led to the evolution of their advanced IT system. Unfortunately, CareGroup prior to the network collapse was not as successful in responding their threats as they were with their opportunities. The fast paced nature of the IT industry is a threat that no company, no matter how advanced the network, should neglect.

Cisco’s outside monitoring study services that were ignored prior to the crash had been a key opportunity of the company that played a vital role in the system’s recovery. Cisco had an advanced engineering team that could review all IT system changes effectively and prevent future network complications.

Up until October of 1998 CareGroup’s IT organization was largely decentralized with each of the hospitals running on its own legacy systems that predated the merger. At Beth Israel Deaconess Medical Center, IT operations were complicated by having to run a blend of the systems from each of the merged hospitals. The hospital’s systems were out of date, nonintegrated and very costly. By 2002 all of the CareGroup hospitals had been brought together into one system using the most sophisticated of the nonmedical center hospital’s software called Meditech. Under Halamka’s reign, CareGroup’s IT had rapidly became the most advance system in health care by 2003.

CareGroup’s IS architecture, which led to the fatal network collapse, was fully centralized and dependent upon just one main switch. Individual smaller networks had been added one at a time causing the network to grow “out of spec.” What directly caused the network to collapse was one CareGroup researcher’s mishap of leaving his experimental software open quickly led to huge data transfers that would monopolize and clog up the company’s main switch. Because all networks were connected to this switch all messages on the network began repeating and reproducing rapidly in an endless loop until the total network was completely disabled.

4) What are the main issues of the case? How would you evaluate the options? What criteria would you use? How do the triangle sides impact the options?

The CareGroup IT was stumped as to how they would ever diagnose the problem when the primary system of the problem was that nothing worked. At first, everyone had his or her own ideas of what the problem was and impulsively leapt to implement their own ideas of possible fixes. The problem was, as soon as they would make the change and it didn’t work, the problem grew even more complex and harder to figure out. It took Halamka and his IT department only 24 hours to realize that their efforts were counterproductive. Halamka called in Cisco’s CAP (Customer Assurance Program) team who was delegated complete and sole authority to deal with the problem. On-site engineers worked continuously with teams throughout the world providing 24/7 acute care and attention to solving the problem.

Another critical decision that played a heavy role in CareGroup’s successful recovery was the decision to remain on backup procedures. Halamka had realized that you could in fact run an entire hospital on paper just fine. By oscillating back and forth from manual to system, the hospital staff needed to duplicate if not triplicate its work. Three and a half days after the fatal crash Cisco managed to restore the network and CareGroup’s service to its patients was minimally interrupted. Remarkably, there was no instance or evidence of any adverse outcome relating to the network outage.

CareGroup’s network collapse had shown the darker side of innovation when it’s not updated and continually seeking to improve. CareGroup had rested comfortably at the top in IT and made very few strides to keep moving up.

5) What decisions and actions would you recommend to the case company? What data supports your conclusion? Why should the case company take your advice?

Halamka has responded to the lessons of IT by imposing, or allowing Cisco to impose, a zero tolerance policy that the organization did not have before. By examining every incident as it happens rigorously and consistently Halamka has developed a new IT culture that encourages constant improvement based on the sharing of experiences, ensuring that broken or obsolete parts are fixed and that recurrences are rare. The change-control board is so rigorous that the board must first approve every single action that affects IT, which begs the question: has CareGroup IT strategy become too careful?

Part of the trade-off with innovation is the risk of failure. The event of CareGroup’s network collapse proves that innovation needs to be taken strict precaution, constantly reviewed and monitored. Halamka believes that staying vigil to the changes and updates on technology will keep everyone engaged in renewal and growth.

As hospitals become increasingly dependent on information technology for clinical as well as financial operations, the responsibility to maintain and protect their information systems increases proportionately. This has been better understood in the financial sector, where organizations depend on their information systems for core operations. Many such organizations have learned that managing networks with the expectation of maintaining a continuous computing environment (i.e., no unscheduled downtime) is critical to their survival. Carrying out this responsibility requires an investment — financial and managerial — to install the right hardware and to manage the risks of the system. It will be difficult and costly for hospitals to meet this challenge at a time of financial hardship throughout the industry. But the incident at the Beth Israel Deaconess Medical Center serves to remind us that computer systems are becoming critical to all aspects of hospital operations. There will always be risks, and costs of mitigating them. Hospital executives, boards, and information-systems departments must engage in an ongoing process of assessing the risks, costs, and benefits of information technology and structuring investment and management decisions accordingly. Technology that is critical to patient care must be managed as such.

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Step 1: Create lists of case details that fit each side of the triangle.

Step 2: Then look at each item and think about how that item affects the other sides of the triangle.

Step 3: Take a look at the industry. Make a list of triangle attributes you find. Compare the industry items with the case company items.

Information Strategy

Organizational Strategy

Business Strategy

Step 4: What are the main issues of the case? How would evaluate the options? What criteria would you use? How do the triangle sides impact the options?

Step 5: What decisions and actions would you recommend to the case company? What data supports your conclusions? Why should the case company take your advice?