On the cost side of the ledger, meanwhile, the turnaround has already wrought significant changes in how the DMC does business. One of the first steps that DMC leaders took back in 1999 was to outsource the hospital's entire information-services function. A 10-year, $1 billion arrangement with Compuware Corp., a software-and-services provider based in Farmington Hills, Michigan, and CareTech Solutions Inc., a Compuware spin-off that focuses on the health-care industry, has cut overhead and enhanced managerial flexibility.

As part of the contract, all 300 staffers in the DMC's IS department took jobs with one of the two outsourcing vendors. Those whose skills were no longer relevant to the DMC -- specialists in programming certain legacy systems, for example -- went to Compuware, where they now work with other clients. But the DMC still has access to employees who have mission-critical skills. "When we need an Oracle programmer or a PeopleSoft programmer, we can just go to Compuware and pull one off the bench," Ragan says. (The DMC also took a 30% equity stake in CareTech.)

These days, Ragan spends his time overseeing new technology initiatives, such as moving the medical-transcription process online, or trying to extract further savings from his IT budget. Over the past year, he and his team, working with colleagues from Compuware and CareTech, have cut it expenses by $25 million -- no small feat, given how much the DMC has come to rely on information technology.

"The digital revolution in health care is long overdue," says Ragan. "Of course, it's impossible to make that revolution happen all at once, so we pick things that will make us more cost-effective, or let us ratchet up the level of care even higher. The biggest advantage that we have is being able to draw on ideas and creativity throughout the institution. That's been the revolution here."

Scott Kirsner (kirsner@att.net) is a contributing editor to Fast Company. Visit the Detroit Medical Center on the Web (www.dmc.org).

Sidebar: Ask Your Doctors

When it comes to "buying" change, the average doctor is a pretty tough customer. So how did leaders at the Detroit Medical Center persuade its medical staff to start using the Cerner clinical-information system? Here are a few tips from the DMC formulary.

Money buys mind share. Early on, when planning for the Cerner system began, DMC administrators formed a Physician Leadership Team. But they didn't ask doctors to donate time to the project. After all, surgeon David Bouwman notes with a laugh, most physicians are too capitalistic for that. Instead, the DMC paid PLT members for 20% to 50% of their time in exchange for their help in developing the system.

Want buy-in? Ask for input. The next step was to get PLT members thinking about what they might want from the system: Which features would help them actually deliver care? Which ones didn't they envision using very often? "You need to listen to your users," says Don Ragan, chief information officer. "You can't tell them to do anything. But if they feel that they're designing the system themselves, then why would they reject it?"

The best feedback loop never stops. While the DMC has cut the number of doctors who may serve on the PLT, the team still meets every Monday and Thursday afternoon. And a separate Physician Advisory Team, which includes about 40 doctors, meets less frequently to hear about future plans. "They give us feedback, and they relay new stuff to people in their departments," says James Selwa, medical director for information services.