University Physician Group (UPG) is a multispecialty group practice plan associated with the College of Osteopathic Medicine (COM). UPG employs ninety physicians and 340 clinical and business support personnel.

 

UPG has recently been profitable (with revenue from operations this fiscal year of $32 million and a retained profit of $500,000 from operations). However, prior year losses make UPG a break-even organization.

Management and the physicians are focusing on strengthening the fiscal position of the organization. This focus has led to plans to restructure physician compensation, establish a self-insurance trust for professional liability, and improve the financial budgeting and reporting processes.

UPG has entered into a preliminary agreement to merge with Northern Affiliated Medical Group (NAMG). NAMG is a 150-physician multispecialty group located in the same city as UPG. NAMG holds a contract with the local county hospital to provide indigent care and serve as the faculty for the graduate medical education programs in family medicine.

Both organizations believe that the merged organization would be able to reduce expenses through the elimination of redundant functions and, because of greater geographical coverage and size, would improve their ability to obtain more favorable payer contracts.

INFORMATION SYSTEMS CHALLENGE For many years UPG has obtained practice management systems from Gleason Solutions (GS). The applications are hosted in a GS data center, reducing UPG's need for IT staff members.

Prior to the merger, UPG was in the process of examining replacements for GS. UPG had become displeased because of the GS application's failure to incorporate new technologies and application features, limited ability to generate reports, and inflexible integration approaches to other applications.

Despite its displeasure, UPG now appears to be on the path to renewing the GS contract. GS executives have effectively lobbied several important physicians and administrators, and UPG's limited cash position makes the GS low-cost financial proposal attractive.

NAMG uses the GS applications and has also been examining replacing the system. NAMG has a strong IT department and will be providing IT support to the newly merged organization. After examining the market, NAMG has identified four potential vendors, including GS.

Once you have finished reading the case study above, respond to the questions below.

• How would an IT strategic plan benefit the merged organizations in their pursuit of a new system?
• What are the steps needed to identify vendors that can potentially satisfy the needs of NAMG information systems?
• What objectives are the merged companies looking to enhance? How would you be sure that the objectives are met and that the standards are exceeded?