Recent research by a national technology research firm estimates that health enterprise IT spending will rise 6 percent this year, yet a lot of that money will go for new servers and keeping the power on, not for strategic initiatives, such as decision-support systems to guide healthcare executives.
Most U.S. hospitals still rely on standalone data centers, with huge annual budgets for new servers, networking, security, storage, support staff salaries and benefits – not to mention the 24/7 cooling bills to keep the equipment performing well. This core budget also includes federally mandated things, such as electronic health records (EHRs) and ICD-10 readiness. Is it any wonder that projects, such as decision-support tools and dashboards, get pushed to the sideline?
Why are data center base costs rising so rapidly? The main reason is that the amount of healthcare data being gathered is growing exponentially. Because of the Affordable Care Act, health systems will soon be adding health records for millions of newly insured patients. Five-digit ICD-9 codes will soon give way to seven-digit ICD-10 codes, yet both code sets will need to be supported in the near term. Emerging accountable care organizations (ACOs) will require timely data sharing between providers, home health teams and patients themselves. That means more servers, more storage and more cubicles for IT staff.
Many healthcare organizations are growing weary of this constant battle to rein in fast-rising base costs. The new paradigm is for these organizations to partner with companies who bundle infrastructure and application services into a single, money-saving platform.
Here’s how this type of alliance succeeds in capping base costs so that hospitals have more resources for strategic initiatives:
Avoid large and unnecessary capital outlays. Cloud IT expertise can shave millions off a hospital’s annual expenditures for servers, storage, networking and security. This allows a facility to reduce personnel costs by keeping a core staff in place and using contract labor to meet spikes in workload.
Manage upgrades and compliance. A partner who brings cloud IT and virtualization expertise to the table can help a hospital meet its upgrade schedule smoothly and seamlessly. Look for companies that offer the scale and operational experience to make upgrades streamlined and cost effective.
Manage complex integration. Trying to use your own staff to link up all your apps with ACOs and health information exchanges (HIEs) is a recipe for frustration and cost overruns. It’s better to get help from a company that has mastered the intricacies of these projects on a large scale.
Shift focus from transaction processing to operational efficiency. Hospital IT directors are now looking beyond the walls of the data center for opportunities to improve workflow and organizational efficiency. A good example would be using real-time location systems (RTLS) data to centrally monitor the temperature of hundreds of clinical refrigerators enterprise wide, which is far less expensive and time consuming than having nurses check them manually.
Save through virtualization. Many companies boast about their virtualization expertise, but you need to find a partner with wide-ranging, multi-tenant, shared-service experience who has successfully leveraged that technology across hundreds of hospitals.
Optimize your application portfolio. As a hospital adds EHR and revenue cycle platforms to its portfolio, these applications need to be continuously optimized to run at peak performance. Many hospital CIOs are surprised to find that optimizing an EHR is a long-term commitment that costs a lot more than initially expected – unless you get expert assistance.
Add capacity. With a standalone data center, it’s common to hit server/storage capacity limits. But a partner who’s adept in cloud IT and virtualization can make it easy to quickly add capacity for things like picture archiving and communication systems (PACS).
Conventional wisdom says, “Let’s stay the course, and eventually our infrastructure costs will go down.” But they’re not going down. Your organization can gain competitive advantage by spending less on servers, storage and support staff and more on business intelligence, decision support, ACO-related projects and other strategic initiatives.
Do you really want to be in the data center business, or would you rather use healthcare technology to improve patient care, boost revenue and guide your business forward?
About the author
Dwayne Gunter is president of Parallon Technology Solutions.
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