In August 2013, MarketsandMarkets released a report that states healthcare organizations in North America will increase information technology (IT) outsourcing spending from $35 billion in 2013, to $50.4 billion in 2018–a 7.6% annual growth rate. Legal and regulatory requirements are some of the key drivers fueling healthcare IT spending. Other allocations include business software, productivity applications, business intelligence and database, and technology and system management.
For many healthcare organizations, one of the key questions decision makers must consider relates to whether they should run and manage an IT team internally, or outsource a portion or all of that function.
The Costs of an Internal Healthcare IT Team
Hospitals, physician practices, medical supply distributors and other healthcare entities need some form of information technology. Generally, the extent of those needs will depend on what the organization does, the tools required to get the job done and the size of the organization.
The problem is that more complex technologies and rising healthcare costs have made it a cumbersome responsibility to keep an in-house IT team.
Some of the issues of running your own healthcare IT department include:
- Aging and unreliable servers
- Out of date software
- In-house information technology functions distracting you from core functions
- IT staff costs– training, health insurance, social security taxes, retirement plans, etc.
- Difficulty of attracting & retaining qualified IT staff
Having your information technology team on-site has both advantages and disadvantages when compared to outsourcing the IT support functions. For example, you have immediate access to staff during business hours. Your IT person can resolve simple issues like replacing a bad monitor or getting printers back online.
EHR, help desk, IT support, big data, etc., coupled with the need to improve patient outcomes, have made healthcare IT more challenging and complex. Nonetheless, healthcare organizations must continue to invest resources, but now they have more options when it comes to maintaining IT internally, or outsourcing those responsibilities to third-party service providers.
Similar to other segments of the economy, healthcare organizations have changed their approach to the IT function in order to take advantage of new technology. New technology, such as virtualization and cloud computing have not only made IT more cost effective, but companies can get more computing power for the dollars which have traditionally been spent internally.
Here are five benefits your healthcare organization can realize from outsourcing:
- Control and reduce operating costs: Reduce IT team employee costs; allow IT team members to concentrate on more strategic initiatives; convert lump sum capital purchases to operational expenses paid over time.
- Improve organization’s focus: Put more attention on core competencies and improving patient outcomes.
- Gain access to expertise: Hire a third-party firm that specializes in healthcare IT and has the necessary industry training and certifications.
- Better management and control of IT: Get rid of the problems associated with evolving IT. Hardware and software versions are changing with some requiring software updates and others requiring new security patches.
- Share the risk: Work with a healthcare-specific service provider to share in the risk of data encryption and archiving by serving as a Business Associate under HIPAA.
Outsourcing healthcare IT ensures you have the latest technology, which can be scaled up or down quickly and without the need to make a huge capital investment. Outsourcing can be a very successful strategy for both large and small organizations, but you must make sure that the approach aligns with the goals of your organization.
Netgain is a private, cloud-based IT solutions company which helps smaller hospitals and physician practices with their IT needs. Netgain also offers infrastructure solutions if your organization requires an on-site infrastructure.