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Health IT Outsourcing Grows for Hardware, Software, and Staff

Health IT outsourcing can help organizations sped up infrastructure projects but can also leave organizations locked in with certain vendors.

health IT outsourcing

Source: Thinkstock

By Elizabeth O'Dowd

- Healthcare organizations going through digital transformations are often challenged when deciding how to handle IT staff. More organizations are considering health IT outsourcing for staff, hardware, and software during this rapid growth period, so that scaling down when projects end is less of a financial burden.

The healthcare IT outsourcing market is expected reach $73 billion by 2024 because of the increasing dependence healthcare organizations have on technology-based solutions. This outsourcing refers to technology solutions that are managed and maintained by outside parties as well as IT staff that do not work directly for the organization.

A Black Book survey found that outsourcing health IT tools is expected to continue to grow over the next several years as IT departments take on more projects.

Fifty-eight percent of respondents said that they expect their usage of IT outsourcing to continue at current levels through 2019, and 34 percent think there will be an increase in IT outsourcing over the next two years.

Eighty-four percent confirmed that they saw an increase in efficiencies and reduced costs from outsourcing that supports their digitization initiatives. This outsourcing included hosting mission-critical applications and patient data, including EHRs.

READ MORE: How to Deploy, Manage Healthcare Multicloud Environments

Eighty-one percent stated that the ROI was enough to keep their outsourcing partner. Seventy-three percent said that immediate access to trained staff and technology was their primary reason for outsourcing.

Many healthcare organizations turn to cloud computing and virtualization as a way to outsource hardware and software.

Cloud computing allows organizations to have access to hardware and software that they need to complete a project without having to purchase that software directly. Setting up temporary cloud environments is especially useful for cloud migration and testing applications.

Public cloud is a cost-effective environment that gives organizations the option to extend their computing power and storage space beyond what they are capable of on-premises. Organizations use the public cloud to develop and test apps and create more space for data intensive cloud migration.

Virtualizing health IT systems also has proven to be an effective way to outsource computing efforts as well as the staff needed to maintain them. With virtualization, IT departments can outsource certain parts of their infrastructure to gain benefits, including skills the current IT department is lacking or cost reduction. Instead of deploying a solution in-house and hiring skilled IT staff to monitor the solution on-site, virtualization gives organizations the option of outsourcing hardware, skills, and even some of the risk associated with maintaining the data on-site.

READ MORE: HIT Outsourcing Remains Significant Despite Recent Dissatisfaction

“Virtualization does transfer some of the risk and transfer some of the cost to another organization,” Forward Health Group CTO Jeff Thomas told HITInfrastructure.com in a previous interview. “From a strategy perspective it can reduce the internal risk footprint, and make it the vendor’s responsibility, who has the ability to maintain that expertise and can do that better, faster, and cheaper.”

Thomas advised that from a cost perspective, organizations can benefit from virtualization financially when they don’t need to hire an army of security staff or storage staff to maintain virtualization solutions.

Outsourcing IT staff for development and management is another growing use of health IT outsourcing. Outsourcing gives IT departments the benefit of working with specialized IT staff so they can gain skills their resident staff does not have without hiring them permanently. This benefits the organization because it doesn’t have to pay the specialized staff member an expensive salary, and it also benefits the staff members because they are able to lend their expertise to multiple projects.

However, organizations need to consider the benefits of having onsite staff over the money they save and the potential of a large turnover of staff when contracts run out.

Healthcare organizations that outsource their development and management staff can be interrupted when contracts are up.

READ MORE: Budget, Cost, Regulations Dictate HIT Infrastructure Upgrades

Contracts typically last about three to five years. When the contracts are up, there’s a bidding process for the next contract. This can often result in the same outsourced staff renewing their contracts, or an entirely new staff replacing them. If a current outsourced staff does not want to be replaced, they may position themselves into being irreplaceable by making it difficult for another team to pick up where they left off. This may cause healthcare organizations to stay with one service provider if the transition is too difficult or time consuming.

Healthcare organizations considering outsourcing health IT systems or staff should consider which parts of the infrastructure benefit most from on-premises tools and staff. Keeping these critical systems on-premises can give permanent staff control over core projects while other less critical projects are outsourced.


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