We’ve become Hoarders of Technology

Healthcare systems have done a great job building their network and creating integrated delivery systems. This hasn’t come without its challenges, we have seen over the past 8-10 years a major shift in healthcare towards seamless technology platforms. Giving up the best of breed system, complex interfacing and functionality, to enable a comprehensive single system. These systems can bring not only integration within their organization, but across their communities of providers creating a hybrid of creative healthcare systems on a single technology. We have seen some of the largest activities around mergers, acquisitions, and partnerships (MAP) or MAP-Mania going on in this country. An unspoken hoarding of technologies are occurring.

The silent giant is there’s a growing number of software technologies that are mounting up in the portfolio, costing organizations sometimes millions of dollars. Some are being used, some are hanging out there just because of legal retention requirements by law. IT costs are mounting and support of these systems are running into high risk situations.

There is a foundational piece of information that is critical to understanding why healthcare systems are hoarders of technology. It deals with knowing what the role of technology plays in an organization. Here is a simple yet powerful model to know:

Understanding the Role of Technology in Healthcare

Let’s examine this a bit. Organizations have capabilities to accomplish their purposes, those are delivered by “how” services are performed or what I call processes. Those processes are automated, streamlined, and capture data by the Applications within an organization. Underneath it all is the infrastructure that the applications run on or accessed.

Think a minute about a merger that takes place. You have two entities coming together that may generally have the same capabilities, however, their processes for delivering services are very different. When you look under the hood, the applications they use to enable their processes are not the same. This is where the culture, duplications and expense pose its largest challenges. It can be a mess. If you’ve been through this before you know what I mean.

Look no Further for Process Improvement

I spoke with an executive team once as they were looking for ways to standardize their care delivery and operations, or what I interpret as their processes in “how” they deliver services. I shared with them, if you want to know where to standardize, look no further than your own application portfolio. A tangible asset that supports processes. I’ve only come across one department in my 20+ years that has an inventory of all their processes. With the absence of this, it is easy to know where your PI departments ought to focus.

In one organization, they had 25+ pharmacy systems. You can’t tell me that one pharmacy is that much different than another operationally. I bet if you documented the processes you’d have 15 different processes. Think about what the cost of this massive duplication and complexity is creating. I could go on, and I’m sure many of my colleagues would have many of the same stories. Hence the title of this article “Health Systems are Hoarders of Technology”

Accumulation through Mergers, Acquisitions and Partnerships

I see the many Mergers, Acquisitions, and Partnership (MAP), along with moving to a single EMR/Billing system, as a great move. However, no one is talking about what is being done about the legacy systems that still sit out there. These systems don’t go away. There are still monthly invoices that keep coming in, capital expenditures to keep them from getting to their end-of-life, and IT staffing that still need to have the skills to know those systems. In many cases, the infrastructure to support it needs to be kept and starts to become a liability and risk as it ages.

Disruption

As you look at the following information, look at things from a different lens and think about what systems are being left behind and have to be maintained. Think about what applications are doing to operational processes as efforts to standardize becomes difficult. Look no further than you application portfolio to unlock some valuable information.

According to KLAS, in 2017, 216 acute care hospitals contracted for a new EMR[1]. EMR vendors are running on this consolidation and standardization craze. Disruptions is occurring in operations and processes like no other time I can remember. Technology costs are rising, not only because of these new systems but legacy systems aren’t going away. Cost on top of cost.

“…customers are investing in Healthcare applications based on new features and capabilities that are expected to replace their existing legacy systems. In many cases, competitive upgrades and replacements that could have a profound impact on future market-share changes will become more widespread.”[2]

In December 2017, Catholic Health Initiatives and Dignity Health, termed the Mega-Merger, announced its coming together at one “Mega” health system[3]. In 2015, Presence Health a recent merged healthcare system in northeast Illinois, set out to consolidate two Epic systems into one [4]. A massive undertaking.

In a recent survey of 190 healthcare executives, conducted by Health Leaders Media, shared that in 2018, those that are both exploring potential deals and completing deals underway (40%) and exploring potential deals (34%) was 74%, six percentage points higher than in this year’s survey[5]. The top drivers were:

Care delivery objectives

Improve position for care delivery efficiencies = 65%

Improve clinical integration = 55%

Financial Objectives

Improve financial stability = 63%

Improve operational cost efficiencies = 61%

With all this activity of mergers, does this mean healthcare costs are lowering because of economies of scale are occurring? My opinion, I think not, but we’ll save that answer for another day. Healthcare Systems are becoming hoarders of technology as this rapid set of changes are occurring. MAP’s, improving care delivery efficiencies, and improving financial stability are drivers in increasing application portfolios. Massive duplication, triplication, and quadruplication is happening.

We need to swing the pendulum the other way and make healthcare cost more affordable. Address our application portfolios and gain the benefits of standardization and efficiency.

[1] Bermudez, Erik, and Paul Warburton. “US Hospital EMR Market Share 2018.” Salesforce CRM – Reviews, Rating, Comments, & Trending Data, 24 May 2018, https://klasresearch.com/report/us-hospital-emr-market-share-2018/1279.

[2] Pang, Albert, et al. “Top 10 Healthcare Software Vendors and Market Forecast 2016-2021.” Apps Run The World – Apps Research & Buyer Insight, 25 Jan. 2018, https://www.appsruntheworld.com/top-10-healthcare-software-vendors-and-market-forecast/.

[3] Kacik, Alex, and Tara Bannow. “CHI-Dignity Will Have to Overcome Some Financial Challenges to Make Their Merger Work.” Modern Healthcare, 9 Dec. 2017, https://www.modernhealthcare.com/article/20171209/NEWS/171209851.

[4] “MERGERS, ACQUISITIONS, AND PARTNERSHIPS: EXAMINING FINANCIAL AND OPERATIONAL IMPACTS.” Healthcare Leaders Media, Healthcare Leaders Media, 2018, https://www.pages02.net/blrhealthcaredivision/Mergers_Acquisitions_Partnerships.

[5] “MERGERS, ACQUISITIONS, AND PARTNERSHIPS: EXAMINING FINANCIAL AND OPERATIONAL IMPACTS.” Healthcare Leaders Media, Healthcare Leaders Media, 2018, https://www.pages02.net/blrhealthcaredivision/Mergers_Acquisitions_Partnerships.