Ops vs. apps — The case for IT outsourcing in healthcare

If there was ever a business case for IT outsourcing and managed services, healthcare is a prime candidate. And healthcare has the opportunity to learn from other industries and take advantage of lessons learned over the last decade.

There are numerous blogs and discussions about the pros and cons of healthcare IT. Regardless of which side one is on relative to this debate, here are some "givens" that are representative of its current state:

1.    Healthcare is way behind other industries in IT adoption
2.    Compliance issues are increasing, putting even more pressure to improve and optimize processes
3.    Healthcare IT resources (both people and money) are limited
4.    Users are frequently frustrated with the lack of value they get out of their IT investments

Any rational person who analyzes the above list would come to the conclusion that for healthcare to take advantage of IT, it has to be done right, taking advantage of — and avoiding the mistakes of —  other industries that have already gone through the process.

Most other industries went down the road of investing heavily in their own IT, including staff, hardware, software and operations. Many companies became so committed to — and dependent on — IT matters that they became almost a slave to the escalating staff cost increases and cap-ex budget busters, and IT became almost a necessary evil and a gating factor to company growth and operations, rather than a tool to support it.

To get state-of-the-art technology, you used to have to not only invest in the initial IT infrastructure — the network and server and storage systems that form the backbone of a corporate IT system — but you had to make ongoing investments in the people and the maintenance and the ongoing operations to make them work. Then and only then were you able to develop and implement the software applications that actually ran your business. So IT became somewhat of a viscous cycle for businesses to maintain their IT system infrastructure and operations, versus optimizing their systems and making them better and more productive.

Over the course of the last 10 years, and the last five in particular, many companies in other industries have realized that the "secret sauce" and value of their IT systems was not the systems themselves, but the optimal use of those systems. So they have shifted their limited capital and people resources to focusing on the things that make their IT systems work better, and spending less time and effort on maintaining the systems themselves.

In short, they are outsourcing the basic functionality of IT systems maintenance and operations, and focusing their internal resources on applications and optimization.

In healthcare, we typically see the limited IT resources spending an inappropriately high amount of time and effort just maintaining current systems, and not enough time in making their systems actually work better for clinicians, business office staff and patients.   

Relating this to the four-quadrant model of Stephen Covey's"7 Habits of Highly Effective People," many IT people in healthcare are seemingly stuck in the Urgent/Important Quadrant I (and sometimes even in the Urgent/Unimportant Quadrant III), but not spending enough time on non-urgent but important Quadrant II activities.

The biggest time-sink activities in all of IT (not just healthcare) tend to be in system maintenance activities. The list below is typical of these operational activities.
Operational IT activities – Highly important and urgent, but of low value to healthcare organizations:

Software patching
Operating system updates
Spam filtering
Power and cooling issues
Deploying workstations and laptops
Managing email
System monitoring and status reporting
Network monitoring
Trouble tickets
Data backups
MACD - moves/adds/changes/deletions of users
Threat detection/prevention
HIPAA compliance
SEIM - security event and incident management
System health checks
Preventive maintenance

Instead, IT departments should invest the most resources in application activities — those activities that make their systems better optimized for the end user and workplace processes. The list below highlights these activities:

Application activities – Highly important but not urgent, but very valuable to the healthcare organizations:
Optimization of user screens and interfaces
User requested modifications
Quality and patient outcome reporting
User training
Template development
Automation and workflow
Improved user experience
Metrics and dashboards
Financial reporting
Patient tools

There is another challenge associated to the above lists. The operational activities represent skills that are much easier to develop and maintain, which tends to cause the IT staff to gravitate to those items because its familiar territory. The application-related activities are somewhat more difficult and take a great deal more time and sophistication to develop. That's one of the reasons why the "IT wish list" never seems to get done, and management is frequently told that there just isn’t enough time in the day for IT to get everything done.
In essence, they are right.

If there was ever a business case for IT outsourcing and managed services, healthcare is a prime candidate. And healthcare has the opportunity to learn from other industries and take advantage of lessons learned over the last decade.

The focus in healthcare IT needs to be on Apps (applications), not on Ops (operations). And recent advances in such technologies as virtualization, cloud hosting services, broadband connectivity, advanced systems and network reporting tools, next generation security firewalls, etc., make outsourcing of the operational issues in the first list even more attractive.


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