Friday, April 1, 2011

Healthcare Headlock

Until coming to Varrow, I had not worked regularly with healthcare organizations. At Varrow though, healthcare organizations represent a significant part of our business, so I have gotten to know this world much better.  What I have learned is both exciting on one hand and disturbing on the other. 

The exciting aspect of working with hospitals and other healthcare organizations is the notion that the solutions we are designing and implementing for our customers are directly contributing to improved patient care.  Being in the technology field, our opportunities to feel like we are really making a contribution is often limited to building strong relationships, helping those around us, and creating a special place to work for our employees.  But in working with healthcare organizations, we have the opportunity to do more and that is great. 

The stakes are high in the healtchare space though; mistakes or "downtime" can effect patient care and, in extreme examples, cost lives.  What I have come to learn is that many companies use this high risk landscape to their advantage.  Before I go further, it is important to explain a little about what we at Varrow do in the healthcare space.  Our scope and expertise is very specific.  We focus on the infrastructure that supports the EMR, PACS, and other healthcare applications that make hospitals go.  We handle the servers, storage, network and disaster recovery solutions that these applications run on.  We are specialists and we are the absolute best at what we do, but when it comes down to what the doctors and nurses see on a day-to-day basis, it is the applications they see.  It's all about the applications - they have all the visibility and they are the software solutions that directly improve patient healthcare.  Our role is really to make sure these applications are performing well, are accessible, and stay up and running.

I mention this because it sets the stage for the disturbing part of IT in healthcare.  Like I said earlier, the stakes are high in healthcare and mistakes can not be tolerated.  As a result, the IT leadership at healthcare organizations are extremely risk averse - and justifiably so!  But in my experience, often times application providers take advantage of this fear. 

Only in the healthcare space do application providers still wield enough power to dictate what kind of hardware infrastructure will be used to support their applications.  Many of the application providers dictate a short list of what hardware infrastructure providers they are willing to certify to work with their applications.  Given the stakes, I can understand this and if it stopped there I would say, "Ok, well they are just making sure that their applications are not running on sub-standard infrastructure."

The disturbing part is when these same application providers insist on reselling and implementing this hardware at the customer site.  This is not a core competency for them, they do not manufacture infrastructure hardware or software, they are not the best in the world at it, and they often don't have nearly the same level of expertise as the companies who specialize in implementing world-class infrastructure solutions. 

It presents an opportunity for the application provider to capture more revenue, but is it really in the best interest of the customer?  A comparable analogy would be if Microsoft or SAP or Oracle were to say, "Mr. customer, you can only buy this specific certified hardware (that we happen to resell) for our application AND you need to use our consutlants to implement the hardware."

Customers can push back and insist on buying infrastructure and associated design and implementation services from someone else, but they need to go up against an army of application consultants and account managers encouraging them to do otherwise...and, by the way, patients lives are at stake.

If I am the customer am I going to be bold enough to say to the account team for the Meditechs, McKessons, and Cerners of the world that despite their insistence on reselling and implementing the hardware infrastructure, I am going to leverage the infrastructure experts for the infrastructure portion of the solution?

Many customers are bold enough to do so.  But many more are not, so what ends up happening is they pay a MUCH higher markup on this infrastructure and related services and get a lesser experience during the design and implemention of it.

One example of a healthcare application provider doing things right is Epic Systems.  Unlike the application providers described above, Epic Systems certifies hardware but does not resell or implement it.  They insist on not doing so.  It is not a core competency.  They are also recognized in the industry for delivering projects on-time and on-budget...and they happen to be the best at what they do.  91% of the HIMMS Stage 7 Hospitals use Epic.  This is a certification that, according to HIMMS, recognizes hospitals for the following:
  • Deliver patient care without the use of paper charts
  • Are able to share patient information by sending secure standardized summary record transactions to other care providers
  • Use their vast database of clinical information to drive improved care delivery performance, patient safety clinical decision support, and outcomes using business intelligence solutions
  • Are best practice examples of how to implement sophisticated EMR environments that fully engage their clinicians
Note the last bullet.  Epic is arguably the best healthcare application provider out there and their customers are examples of how to best implement sophisticated EMR environments...and they do not try to resell or implement the infrastructure portion of the overall implementation because it is not their core competency.

So, for those folks considering a new EMR or PACS solution, consider Epic.  And if you decide to go in a different direction than Epic, stand your ground when your application provider tries to sell you the infrastructure and related services.  Ask them to break out these costs separately and on a separate quote, ask to talk to their presales and post sales engineers that specialize in the infrastructure, and then compare their cost and capabilities to your local integrator who specializes in this stuff.

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