The Modern Approach to Acquiring Healthcare IT

 Cheryl Rodenfels, Healthcare Strategist, Nutanix The COVID-19 pandemic has shed light on the shortcomings of today’s hospital and healthcare IT infrastructure, with many healthcare organizations quickly adopting the latest and greatest technology to support remote operations. However, in the scramble to adapt, many IT leaders did not ensure that the acquired technology integrated well with legacy systems – resulting in underused components and wasted costs. As we enter into a new era in healthcare, it is paramount that these organizations adopt technologies that support overall digital transformation and are fiscally responsible. The IT acquisition journey has taken us from focusing on the speed of components to the speed of the cloud, but we must work to innovate further. To adopt infrastructure that works at the speed of the business, healthcare IT providers must evaluate legacy IT acquisition efforts, the current models, and how they can evolve in the future. 

Past Performance

The historic view of acquiring healthcare IT has been to move at the speed of the components. This lifecycle management approach was born out of the perception that acquiring new IT systems were too expensive for the return on investment. The focus was on the management of equipment, licenses, and contracts, causing IT leaders to spend the majority of their time patching and updating existing systems. The inability to predict a system’s capacity for computing, storage, and data meant less time spent on security, which left health systems vulnerable to outside threats. 

Today’s Operating Model

Today, the focus has shifted to ensuring IT infrastructure moves at the speed of the cloud. Many hospitals and healthcare organizations have adopted an on-premise cloud and consolidated their licenses, equipment, and contracts to streamline service and reduce maintenance interruptions. This allows IT departments to proactively manage infrastructure capacity while also gaining security hardened systems. The technology management approach provides application-based cost management for healthcare organizations that require a variety of different needs, adjusting the perception of IT to that of service providers. Healthcare organizations that embrace this model are able to move and house their applications based on need, rather than pre-existing equipment constraints, which was unattainable before. 

The Future of IT Acquisition

Looking ahead, there is no doubt that hospitals and healthcare organizations need to continue to evolve to maintain seamless operations. With COVID-19 highlighting infrastructure vulnerabilities, it is paramount that IT adjusts for increased technology, network traffic, and security weaknesses. Healthcare organizations that are working through issues with tools, cloud skills, and other obstacles that impede hybrid cloud adoption believe these problems will soon be resolved. With that in mind, it is likely that within the next decade there will be aggressive hybrid cloud adoption across the healthcare industry.

Additionally, in response to shifting priorities, subscription and consumption-based service models are growing in popularity because of their ability to flex up or down to optimize costs and efficiencies. In the future, healthcare organizations must move at the speed of the business as well as meeting community needs, like COVID-19 data reporting and analytics. 

Instead of investing in legacy solutions that have proven difficult to manage, healthcare organizations looking to adjust their IT infrastructure can consider adopting numerous “as-a-service” models. For organizations that have specific software, application management, and full system infrastructure needs, Software-as-a-service (SaaS), Platform-as-a-service (PaaS), and Infrastructure-as-a-service (IaaS) are top considerations. Some organizations may only need access to software for a set number of users, rather than full support for the entire system, pointing them to subscription-based software instead of the as-a-service options. Conversely, consumption-based software models are growing in popularity.

Organizations that prefer to pay for applications or devices based on actual usage of the product may prefer this model because it often implies the user pays a certain amount in advance and then draws down against the pre-payment based on their use (“consumption”) of the application. This option allows systems to better budget from the onset, rather than determining costs as the year progresses. 

Historically, projects and supporting product offerings are based on yearly budget and funding allotments. That is until the product offerings changed. Software subscriptions, software-as-a-service (anything-as-a-service), and consumption-based services are dramatically impacting the way that IT is purchased, which helps reduce costs.

When looking at healthcare IT spending more broadly, organizations allocate millions of dollars each year, even though they often have mixed experiences in the success of implementations. Since companies usually pay based on project implementation milestones, there are rarely performance clauses. With this in mind, organizations need to hold vendors accountable for successful implementations and first-year operations. In the future, many healthcare organizations will pursue shared risk cost models as they allow the provider to develop system improvements while mitigating costs for the organization.

The COVID-19 pandemic has forever changed how health systems assess and acquire IT infrastructure. With unprecedented amounts of network traffic, telehealth needs, and sensitive patient data, organizations need to prioritize IT planning and acquisition to avoid procurement delays and exorbitant costs. As 2021 budgets are being determined, hospital decision-makers should consider adopting subscription and consumption-based models to help them the best support and protect their data and meet the demands of tomorrow.

About Cheryl Rodenfels

Cheryl Rodenfels is the Healthcare Strategist for Nutanix. She is a seasoned technology executive, responsible for improving customer success and experience across the entire portfolio of Nutanix products and services. Cheryl’s responsibilities include developing the healthcare practice at Nutanix by identifying market opportunities, creating industry-specific training and documentation, enabling sales, and improving technology adoption and solution delivery. Cheryl can be found on LinkedIn.

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