The US Navy has about 3,700 aircraft, and one is the Boeing T-45 Goshawk, an advanced naval jet trainer.
Clearly, keeping the T-45 operational is critical to the Navy's state of readiness. Unfortunately, in 2002 engine maintenance significantly impacted the T-45's availability. In fact, engine availability kept the fleet at 70 percent ready-for-issue (ready to fly) which says that at any time almost one third of the T-45 training fleet was grounded.
In September 2003 the US Navy signed a contract with Rolls-Royce to take over management of the engine that powered the Navy's fleet of Boeing T-45 Goshawks. This contract meant that rather than source and stock spare parts, engines, mechanics, hangars, etc. the US Navy would pay a fixed amount per hour of engine operation and commit to a certain number of hours. In exchange, Rolls-Royce maintained the engines and committed to providing 80 percent availability. Two years into the program, ready-for-issue had increased to 85 percent and the average time between engine removals from aircraft had increased from 700 to 900 hours. The longer time between removals tells us that Rolls-Royce was probably maintaining the engines better than the US Navy. It makes sense that they would; they're the ones who made them.
So, what do the US Navy and healthcare organizations have in common? Well, when we start talking about the core engines that power hospital information and operations system, that level of complexity compares pretty evenly with the US Navy's challenges. Healthcare organizations are powered by engines like EMRs, clinical integration, ERP—including nurse scheduling, financials, payroll, supply chain and distribution—radiology PACS, and the list goes on and on. Gaining control over complex health IT software that undergoes constant change remains one of healthcare's biggest challenges. Just like the Navy struggled to maintain the T45s on its own, healthcare systems are also challenged to self-manage and maintain all of their systems.
Recently I heard from a small three-hospital system in the Southeastern US that hadn't updated its ERP financials, HR and supply chain software for eight years, mainly due to upgrade costs, complexities and competing priorities. Yet the hospital was still expected to maintain a competitive and ready-for-issue state in its facilities. While the organization didn't have an exact ready-for-issue percentage, a fair guess would be to assume that their systems weren't "up" 100 percent of the time. Imagine a patient coming to the emergency department and being told—sorry, we're only 70 percent ready to see you today!
On top of all this complexity, security terrifies healthcare organizations, and for good reason. This year alone some of the largest thefts of patient data have happened with Primera, Anthem, and other healthcare organizations.
Unfortunately, and just like Rolls-Royce, conventional (perpetual) license models seldom incent the vendor to drive down operational costs. Why does the vendor care if it costs 4 FTEs to run their software? What about 40 FTEs? Clearly, what's needed is direct alignment between healthcare organization objectives and vendor priorities.
Similar to what the Navy went through with outsourcing T45 engine maintenance to Rolls-Royce, the company that made the engines, now healthcare has the same option. And that option is to migrate away from on-premise servers and into the cloud.
Six reasons to move to the cloud
Here is what I consider the six main reasons to consider moving core, mission-critical, systems in your organization into the cloud:
1. Focus on what you do best. Your core and central focus should remain on caring for patients, and not on ensuring that all of your systems are functioning 100 percent of the time. Building and maintaining data centers simply can't be your focus, so offloading that responsibility frees you to focus on providing excellent patient care.
2. Cost. With reimbursement models shifting from value to volume, healthcare organizations need to be able to manage their costs. Aberdeen mirrors this finding in its report: Replace or Upgrade ERP in the Cloud to Improve Service and Remove Obstacles, which states that cloud technology is an emerging trend for all types of organizations, mainly because of the lower total cost of ownership. If you maintain all of your own systems, you're paying for hardware, upgrades, and general infrastructure and IT resources. Moving to the cloud means the vendor covers all of that in a fee that covers maintenance, operating system, hardware, and upgrade costs.
3. Ease of use. Healthcare organizations are moving beyond their four walls to encompass pre-acute and post-acute settings through acquisitions and partnerships with others to complete their continuum of care. Whatever solutions healthcare organizations use must be easy to use, and able to bundle payments and equitably divide reimbursements. All of this forces providers to look for external solutions for anything that is not solely focused on care delivery.
Upgrades and improvements. The cloud brings the opportunity to benefit from vendors that constantly upgrade and improve their products.
4. Performance. Your organization needs to function as efficiently as possible when it comes to fundamental functions, like payroll processing, invoice updates, and patient billing, for example. It's important from a user's perspective to have everything running quickly and smoothly to be efficient and effective in their work. Sometimes it's difficult to achieve that when your IT department doesn't have the opportunity to benefit from new and updated hardware and software. Upgrading via the cloud offers a solution to this challenge.
5. Security. Healthcare organizations need to adhere to HIPAA and Hi-Tech guidelines, and they want the assurance that the vendor they work with has secured those attestations. Ultimately, the healthcare organization's goal is to avoid any non-compliance penalties. The right vendor can take ownership and control for compliance at the infrastructure level, as well as the application level.
Just like the Navy, work with vendors to align their priorities to your organization's objectives and you will not only improve your state-of-readiness but you'll have current technology enabling you to better focus on your core goal: delivering excellent patient care.