The last several years have seen hospitals and health systems rush to take on technology transformation initiatives to keep up with changing innovation, customer expectations, and pandemic-era realities. The rapid pace of change has been necessary in many cases, but it has left many organizations with technology-related practices, tools, and staffing that may not serve them as well as they could.
Now that healthcare institutions feel the increasing pressure of spiraling costs and resources stretched thin, some might look ahead with a sense that IT investments must be next on the chopping block. But now is the time to double down on IT investment—with an eye toward maximizing tech’s efficiency, effectiveness, and contribution to overall cost reduction.
We spoke to Shannan Epps, Founder and CEO of Brightwork, and Tabitha Lieberman, President of EHR and Healthcare Applications at Brightwork, to get their take on how organizations can best approach IT infrastructure investment in 2023.
What is top of mind related to IT infrastructure investment as we look ahead to 2023?
Shannan: What’s going to be top of mind for next year and closing out this year is: How do we reduce costs right now? The major problem in healthcare is massive losses in revenue. For example, Kaiser just announced a quarterly loss of over $1 billion. Providence is laying off and announcing huge losses.
That’s the story of the hour: These massive revenue losses remain an ongoing result of COVID. Fewer patients are going into the health systems, more are going into the emergency rooms, and Medicare reimbursements are nowhere near the rising cost of delivering care. It’s a dire financial picture right now in healthcare.
So, if they’re going to be investing in any kind of IT, it’s going to be about reducing costs or creating systems that support new revenue.
Tabitha: In light of the extreme financial pressures and the reduction in available capital, I think you’ll see organizations looking at their support models. What makes sense to insource? What makes sense to outsource? What is the most cost-effective way to manage your operations?
The good of that is that more people will move to modern technology. Let’s say that you believe that a partial outsourcing solution is best for you. Doing that when you’re in the cloud is much easier than if you’re still data center-heavy with on-premise solutions. So, I think you’re going to see a move to more modernization.
Is outsourcing a good solution for organizations struggling with IT transformation?
Shannan: There’s value in certain outsourcing, but it has to be done well. There’s this rush to outsource everything as a quick Band-Aid solution when faced with a lack of capacity or cost overruns. It’s tempting to think you can just let somebody else take it and figure out how to make it cheaper. “It’ll go offshore, and everything will be solved.”
But that doesn’t work when it’s not done correctly. This move has to be strategic and specific. If it’s not, it can end up costing more. There are plenty of examples of large health systems that went through the process of fully outsourcing their IT organizations to offshore companies, only to bring it back in-house after realizing the cost savings weren’t there and the dissatisfaction among providers was.
Tabitha: Organizations that jump to outsourcing without really understanding what they’re trying to achieve are adding potential risks, both to rapid delivery and potential long-term costs. I’m starting to see this in multiple organizations. Shannan: The point is that there are all sorts of solutions to reduce costs and help your organization improve its revenue stance using technologies, but the organization has to be smart about it.
Do you think many companies are ready to invest in their IT organization?
Tabitha: Today, technology is a core part of everything healthcare delivers. Whether it’s your EHR, your patient engagement strategy, your analytics, your research, or your support of oncology and cardiology systems—it is part of the fabric of the healthcare delivery system. So, you need to treat it with the same level of strategic importance as your nursing strategy or physician engagement. It is one of those core elements of success.
Many organizations will, in times of struggle, just barely keep the lights on. They will not make heavy investments because they have limited capital to work with. The challenge here is that because health technology has become such a key part of success for healthcare organizations, withholding IT investment now could further delay the implementation of critical healthcare strategies.
How can companies make the process of IT integrations and consolidations smoother?
Tabitha: With healthcare consolidations, one key focus needs to be the impact on our patients and community. The goal is to improve care at lower costs. By having that lens from the beginning of your integration and ensuring it’s part of all your decision-making, you’re more likely to be successful. However, that means being able to make difficult choices.
To be successful with your integration—to improve care and lower costs to your patients, which is the goal—you need to understand what each organization brings and its strengths, weaknesses, and opportunities. You need to make hard choices to be able to implement the best practices across those now-joined organizations. That’s what Brightwork helps organizations with, and we’ve seen how difficult it can be.
Shannan: I often talk about the concept of doing more with less—making sure that you are getting the most out of the resources that you already have within the IT organization. Many organizations aren’t using IT resources as well or as efficiently as they should be. The reason is a lack of governance—basically saying “yes” to everything that the organization wants to do.
What is the role of leadership in technology transformation efforts in healthcare organizations?
Shannan: The key message for CEOs and healthcare boards is that the organization’s technology arm has to partner with the organization’s goals. Whatever the board or executive team is trying to accomplish for that organization, the entire technology arm must be at the table and part of that conversation. That’s so the IT people can understand how they need to structure their teams to accomplish that vision, whether that will come through the improvement of current technology systems, digital transformation, or optimizing resources.
Tabitha: We have more organizations coming into an age of maturity. By this, I mean that many healthcare organizations rushed to add many roles, like getting chief transformation officers in place, and now it’s time to take a step back and say, “What do we really need?”
What can be done to improve physician, clinician, and employee engagement?
Shannan: Improving engagement is a cost-reduction effort. It’s expensive to have burned-out physicians and clinicians. It’s expensive to have physicians and clinicians resigning and increasing the use of agency nurses and locum providers. At the core level, you’re replacing salaried employees with contractors, and contractors are more expensive. There was a huge increase in the use of contract providers and clinicians over the last couple of years, and that’s a concerning trend.
What can we do to help with clinician engagement and employee engagement? There are a whole bunch of things that are also cost-reducing factors. One example is the clinical inbox. Managing these communications takes a ton of time and creates a lot of dissatisfaction and burnout. Understanding how to make that process more efficient and effective—and helping providers spend less time on it—increases satisfaction and cuts costs.
So, on a big-picture level, health systems need to consider physician and clinician engagement and satisfaction as cost-control factors and look at what they can do to reduce costs while improving the lives of their providers.
Visit brightworkhealthit.com to learn more about the future of IT infrastructure, and what your organization needs to do to get— and stay—ahead of the curve.