An interesting article

As the the recession deepens, hospitals investing in HIT, particularly high-acuity solutions, will be among the few to benefit from the slowing economy. It makes sense for large HIT vendors to work with niche vendors that support interoperability and flexible pricing models. By Alan Portela As the country braces against a deepening recession, hospitals investing in health information technology (HIT), particularly high-acuity solutions, will be among the few to benefit from the slowing economy. With IT sales falling, facilities can demand that their existing core HIT vendors make their applications interoperable with solutions from niche vendors. Providers also are in a position to extract better purchasing terms from niche vendors covering areas where their core vendors are demonstrably weak, such as clinical documentation in the intensive care unit (ICU), labor and delivery (L&D) and emergency department (ED). Over the past decade, health systems’ IT strategies typically fell into one of two camps: single-vendor solution or a best-of-breed approach. Until recently, providers had increasingly moved to adopt the former approach, which offered strong core applications such as ancillary systems, financial systems and clinical charting for step-down clinical areas, but lacked capabilities in high-acuity areas. The providers typically planned to spend $30 to $40 million to replace legacy vendors with one large HIT partner. The deployment strategy was most often a staged implementation, which gave the new HIT vendor time to develop more robust high-acuity modules while the providers implemented the core vendor products However, the economic crisis has led IT executives across all industries to reduce spending. This decrease in technology investment has prompted market researchers to slash previous forecasts for 2009 worldwide IT spending. In November, IDC lowered its estimate from 5.9 percent growth to 2.6 percent, with U.S. spending expected to grow just 0.9 percent. The slowdown on new acquisitions has already triggered labor and R&D cuts at several large HIT vendors, slowing their product development in niche areas such as high-acuity care. As a result, many health care organizations are now facing the dilemma of either: (1) waiting until the economy improves to contract with new HIT vendors that offer the full breadth of clinical applications, or (2) immediately bringing in new niche vendors that can automate the areas not covered by core HIT partners. Back to the drawing board In reaction to the turbulent times, several health networks have canceled plans to replace legacy electronic medical records (EMRs), but are maintaining their original timetables for automating high-acuity clinical areas. This seemingly contradictory decision reflects the significant impact that high-acuity departments have on IT budgets, staff efficiency and quality of patient care. As EMR sales decline over the next three years, large vendors will be forced to partner with niche vendors to fill holes in their product line rather than wait until the economy improves to develop their own solutions to avoid losing market share. This paradigm shift will also be driven by the fact that providers are already redirecting a greater portion of their IT budgets toward niche and emerging technologies. Meanwhile, niche vendors will have to adapt to the realities of the new HIT environment by improving their ability to integrate with legacy systems. Additionally, niche vendors are addressing market demands by tweaking pricing models to accommodate risk sharing, transaction-based models that allow providers to measure return on investment (ROI) through metrics such as decreased average length of stay, improved staff efficiency and retention, enhanced quality of care and reduced health care costs. Functional cluster automation With the adoption of high-acuity applications poised to accelerate, the challenge for hospital administrators will be to decide where to begin implementing those solutions. The best approach will be to group clinical modules around their ability to address a strategic function or initiative of the organization. These groupings, which we call “functional clusters,” are centered on achieving clinical, organizational and financial ROI by deploying clinical documentation in high-acuity areas. The niche vendor, or vendors, should be able to automate the patient continuum from the ED, ICU, L&D, OR, post-anesthesia care units and step-down units while fully integrating with the existing hospital infrastructure. Today, health care IT is a buyer’s market. Providers can either try to squeeze the largest discount they can or share the risks — and rewards — with vendors. Both approaches will save hospitals money, but the latter is more advantageous in the long term because it encourages a collaborative, rather than adversarial, relationship with the vendor. Realistically, vendors that are able to demonstrate proven clinical, organizational and financial ROI will be the ones willing to enter into risk-sharing or performance-based pricing models. It is also clear that the automation of high-acuity clinical areas has been challenging for most HIT vendors up until now. In order to meet market demand, it makes sense for large HIT vendors to work with niche vendors that support interoperability and flexible pricing models. By choosing a niche system wisely, health systems can operate more efficiently, maximize their existing technology investment, eliminate co-dependency on a single EMR vendor, and implement an open-systems architecture that will provide the foundation for future system interoperability.

Mr. Portela is COO of San Diego-based CliniComp Intl., a provider of high-acuity charting and surveillance solutions to leading hospitals and health systems. You can e-mail him


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