With the growing complexity of health care information technology systems — and the mounting costs to install and maintain them — hospital leaders increasingly are looking to outside experts for IT know-how.
That’s one of the key takeaways from a new survey of more than 1,000 hospital chief information officers and technology leaders, performed by Black Book Market Research earlier this year. We all know the mounting list of IT items giving your docs and nurses headaches — whether it’s ICD-10, big data, interoperability or electronic health record usability.
Given those pressures, some 73 percent of surveyed hospitals and health systems with more than 300 beds said they are looking outside their walls for technology solutions. The same goes for the smaller hospital side, as 81 percent of provider organizations with fewer than 300 beds said they’ve placed IT outsourcing on their to-do list next year. Some hospitals already are teetering on the brink, and a bungled IT implementation could be enough to push them over the edge, says Doug Brown, managing partner of Black Book.
“The frank reality is that outdated, understaffed and failing current solutions will close a marginally performing hospital for good,” Brown says in a press release.
Some of the primary motivators for such outsourcing, Black Book found, include the return on investment, immediate access to well-trained staff and the addition of needed technology. Some 90 percent of leaders polled said they expect to see a positive ROI on their IT outsourcing investment in the next three months. And 84 percent said the relationship with their outside vendor exceeded expectations. Black Book isn't alone in its findings; another recent survey, by Dallas-based RnR Market Research, was similarly bullish on IT outsourcing in health care, predicting that it will increase by 7.6 percent each year, reaching $50.4 billion by 2018.
Black Book also offers up the top 10 reasons why outside technology contracts may have failed, gleaned from current or former users of IT outsourcing solutions:
- Outsourced IT services that should have stayed within the organization.
- Selected the incorrect vendor for the job
- Neglected to realize the full costs of outsourcing
- Permitted the outsourced service to get out of control
- Disregarded employee and/or community concerns about outsourcing/offshoring
- Wrote ineffective statements of work for the services outsourced
- Failed to strategize an exit procedure before terminating the outsourcing contract
- Unrealistic expectations
- Lack of best practices for hospital IT outsourcing established
- Did not monitor the performance of the contracted outsourcer
Such appetite for outsourced IT solutions offers another unique opportunity for hospitals. Some advanced EHR adopters, such as Missouri-based Mercy health system, are actually acting as consultants and helping smaller hospitals with their own complex implementations, as explored in a recent issue of H&HN. Revenues generated from its IT consulting have swelled from $5,000 at the start to more than $5.4 million in 2013. Lorren Pettit, vice president of market research for HIMSS, says he expects this trend of hospitals lending out their IT expertise to continue.
"Hospitals and health systems have invested a lot of money, time and energy in their IT staff, so I think it's part of the equation that they are really trying to look around and say, 'OK, we've made these investments, now what else can we do to increase our ROI?' " he says.