Oversight vs. Ownership: The Managed Services Model in Healthcare IT

Oversight vs. Ownership: The Managed Services Model in Healthcare IT


As the healthcare IT market rapidly approaches total saturation of digital EMR solutions, many organizations find themselves struggling with the cost and staffing implications. While this is true in any industry with a strong focus in technology management, HIPAA security requirements and the constant evolution of government mandates and standards can make IT support in the healthcare universe an even more difficult task to undertake. As such, more and more healthcare delivery organizations (HDOs) are exploring options to outsource some level of this challenge – from staff augmentation, to remote hosting solutions, to the topic of our discussion today – the managed services approach.

As Health IT providers have become more adept and expert at providing what healthcare delivery organizations need, when they need it, providers have become more comfortable turning Hosting, Application Support, DR, RCM and other functions over to HIT vendors.

Faced with downward cost pressures, a full slate of initiatives including optimization, PHM, and FFS to VBC transition, HDOs are pursuing outsourcing application support as part of a managed services strategy or as an interim solution for EMR or EHR transition. According to the 2017 HIMSS Annual Workforce Survey, “60% of healthcare provider respondents indicated their organization outsourced at least some of their IT staffing needs to a vendor or consultant rather than hiring staff directly.” Moreover, HDOs seek an application management outsourcing partner to reduce cost and complexity, increase agility and innovation, improve quality, standardize and reduce risk.

Outsourcing vendors can combine a wide range of expertise with the ability to flex staff when needed, while maintaining state-of-the-art technology to improve efficiency and drive cost savings. In addition, Health IT service providers have become more adept at providing the services practices need, when they need them.

A managed services provider (MSP) is generally an IT services company (be that a vendor, contractor, or hybrid) who takes on responsibility for a finite set of services based on client need. MSPs typically have a broader spectrum of tools, resources and relevant experience than an individual client would have at their immediate disposal, in addition to their single-track focus on the service being provided. For example, many EMR vendors offer a managed service model which allows the vendor (and in this case, the expert), to assume ownership of optimization and maintenance of their own specific system. Additionally, the goal of any MSP is typically to implement process and systems to identify potential issues proactively – thereby potentially saving the client costly downtime, and in the healthcare IT space, mitigating compromising of patient safety.

EMR Managed Services

From a cost savings standpoint, the notion of MSP is clear – lower cost, better outcomes. Based on data from Q3 2015, 90% of hospital organizations state that they have experienced almost an immediate return on investment for IT outsourcing to an MSP. Organizations can also budget around a fixed-fee service model with an MSP, eliminating the overhead and unpredictability of staff management, including things like training, turnover, and salary/benefits costs. This allows the healthcare organization the opportunity to focus their efforts on what they do best – care for patients – while someone else handles application management and support.

Another factor to consider is one mentioned above – market saturation. We’ve now reached a point where healthcare entities have had some experience in a digital space, and more and more we see provider and staff engagement in the selection and customization of EMR technology. A change in EMR can be a daunting task for an organization of any size, but larger healthcare systems in particular can struggle with a long-term transition from one vendor to another. MSPs can be incredibly valuable in these situations, allowing legacy application support to fall to the hands of the vendor, while the internal staff and providers take time to train and acclimate to a new EMR as the rollout progresses.

One challenge presented by the MSP model can be a lost sense of ownership over one’s own applications and systems. Most MSPs will work alongside your organization to ensure clear communication, understanding of expectations and a level of transparency to overcome this potential loss of control. Managed services contracts can vary wildly based on an organization’s needs and range from full hands-on management of a system or application by the MSP, to integrated services and assistance, designed to supplement an in-house staff.  Regardless of the level of control and engagement an MSP provides, it is clear that nearly all healthcare organizations could benefit from some level of managed service.

View the following resources to learn more about the benefits of healthcare IT managed services and contact us to for a complimentary consult.

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