Best-Practice Methodology for Healthcare Application Portfolio Management
This blog is the continuation in a series: “Reducing Complexity in Healthcare IT”
With doc IT costs up 42% since 2009, according to a recent study by MGMA, the words “consolidation,” “optimization”, and “cost containment” should become a part of every Health Care Organization (HCO) CIO’s lexicon. The operative quote came from Dr. Halee-Fischer-Wright, president and CEO of the MGMA, via a recent news release:
“While technology plays a crucial role in helping healthcare organizations evolve to provide higher-quality, value-based care, this transition is becoming increasingly expensive. We remain concerned that far too much of a practice’s IT investment is tied directly to complying with the ever-increasing number of federal requirements, rather than to providing better patient care. Unless we see significant changes in the final MIPS/APM rule, practice IT costs will continue to rise without a corresponding improvement in the care delivery process.”
This reminds us of a Hospital Application Portfolio Management case study we present below. Let’s first start with quotes we hear all too often in our healthcare IT consulting travels:
Common Quotes in Healthcare IT
Why does it take so long to get something done?”
“Do we have to integration test everything? Why every time we make a change do we have to test every interface and connection?”
“The costs of IT are too high. Rather than achieve any economies of scale we’re always adding people and service contracts. There never seems to be an end to the growing budget.”
“Projects are always a 50/50 gamble at best. Putting in new technology carries significant risks as to whether IT can deliver on-time and on-budget.”
“Shouldn’t we just outsource the IT department?”
Case Study – Leading Hospital Application Portfolio Management Analysis
Healthcare IT Portfolio Complexity Drivers
- Vast portfolio of systems – Leading HCO had 400 different systems and over 650 packaged versions.
- Standards are rare – IT usually has no set of defined standards for system evaluation.
- Growing portfolio of systems – systems are commonly added to the portfolio with little consideration to the long-term technology costs and risks.
- Limited IT budgets – Pressures to drive down costs are forcing IT to look at the value of its existing IT portfolio.
- Technical debt – cutting corners in past projects reduces supportability of systems, increasing complexity and support effort
Hospital Application Portfolio Management Solution
- Develop – continue HW & SW investment, focus on system development for new business processes
- Invest – increase SW & HW investment, push for more business processes to use the system
- Migrate – schedule system for upgrade or migration to stronger system, evaluate business process for standardization
- Eliminate – schedule system for deactivation, cancel contracts, decommission HW
Hospital Application Portfolio Management Analysis Conclusions
- Assessment and DIME placement were completed for all HCO business applications.
- Distribution of the applications (n=216) across the DIME quadrants was as follows:
- Develop – 53% (115 systems)
- Invest – 12% (26 systems)
- Migrate – 3% (7 systems)
- Eliminate – 32% (68 systems)
- ARB (Architectural Review Board) process revealed that HCO had a significant number of contemporary “niche” systems. Developing all of these systems into other business processes mat not be practical.
To solve healthcare IT complexity, view past blogs in our series “Reducing Complexity in Healthcare IT” and view our webinar, “Optimization for Outcomes-Based Improvement” for methodologies, best practices, tips and tricks.