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DPH budget hearing prioritizes EMR investment while warning of state revenue risks
Summary
At a Jan. hearing, San Francisco Department of Public Health officials outlined a multi-year plan to modernize IT and implement a unified electronic medical record, estimated at hundreds of millions over several years, while flagging uncertainty from the state'level realignment and the federal/state 1115 waiver.
The San Francisco Department of Public Health outlined plans to stabilize and modernize its information technology systems and to implement a unified electronic medical record as part of its proposed budgets for fiscal years 2015'16 and 2016'17.
Greg Wagner, DPH chief financial officer, opened a two'year budget hearing by describing improved city revenues but still-significant five'year projected deficits of $15.9 million and $88.3 million that frame the department's planning. Wagner said the mayor's office's guidance permits no general fund reduction in year one and a modest second'year target; the department's strategy is to use the relative fiscal respite to examine operations and invest in systems that protect the department in future downturns.
A key component is information technology. Bill Kim, DPH chief information officer, told the commission the department needs a "medical'grade" infrastructure by the end of 2015 and to lay the foundation for a unified EMR in 2016'17. Kim gave a multi'year investment estimate of roughly $223 million over five to seven years to close infrastructure and staffing gaps, proposed moving to a five'year refresh cycle (about $6 million per year) and said the department expects to spend roughly $18 million in the coming budget year to ramp up teams, with build-year spending nearer $25 million annually — figures he cautioned could vary widely depending on the vendor and solution.
Commissioners pressed Kim on procurement and schedule. Commissioner Singer asked when a vendor must be selected to meet a 2018 go'live; Kim said selection would need to occur by mid'calendar year to allow contracting and a year of prebuild work. Kim warned the procurement and long'term contract negotiation would be complex and will require significant legal and consulting support.
Wagner also highlighted revenue risks outside the department's control. He said the budget currently assumes a $16.7 million "takeback" from state realignment formulas but that some forecasts show that number could be up to roughly $30 million higher; he also described uncertainty around renewal and redesign of the federal/state 1115 Medicaid waiver and noted the department receives more than $200 million through safety'net and DSRIP-related programs that could be affected by waiver changes.
Wagner said the department intends to pull prior planned reductions to community'based services (about $8.8 million per year) out of the budget so services remain stable while the department uses the planning period to prioritize operations.
Next steps: the commission schedules more hearings, including a deeper March session, ahead of the mayor's June balanced budget submission and subsequent Board of Supervisors review.
