3 Risks Hospitals Consider When Buying Technology

As anyone who is watching the news can tell you, healthcare is fundamentally shifting in the United States, almost daily. From reimbursement reductions to the Affordable Care Act, from massive provider consolidation to MACRA, the rules of the game are rapidly changing in healthcare putting longstanding traditions at risk. At the same time, there is an explosion of technology that is shortening replacement cycles and increasing the risk of obsolescence. 

Given this volatility, hospitals are facing unparalleled challenges when choosing the right solutions to achieve their ultimate goals and profitability for their facilities. Vendors often provide ROI models and stories, but these models ignore 3 risks that must be considered in light of the unknown. 

Proprietary Risk

Proprietary Risk occurs when the technology acquisition is unable to adapt to the ecosystem of other solutions in the hospital. This inability to adapt can be a result of technological limitations or cost prohibition. The Electronic Health Record (EHR) is a perfect example of a technology purchase that purports to provide tremendous value, but has locked hospitals into solutions that do not easily interoperate with their other systems. It has taken years and some government intervention to start unlocking much of the value that EHRs offer, so hospitals should be mindful of how open their technology partners make their solutions.

Opportunity Risk

With every purchase, a hospital is locking themselves into a product with an expected lifespan. For some technologies, this can be measured in weeks or months. For others, you are thinking in years and maybe even decades. How many times do you see 10+ year old equipment in use at a hospital? For years, these hospitals have missed out on the value offered by the next generation of solutions available on the market. Sometimes, these purchases occurred at the end of that product’s lifecycle and the hospital is really using 15-20 year old technology. Hospitals must be mindful of where their vendors’ solutions sit on both the technology adoption curve and that particular product’s lifecycle. 

Care Model Risk

As hospital systems grow to encompass outpatient clinics, doctor’s offices, and specialty centers, there is risk that care that is delivered or improved by technology purchases will fundamentally change or no longer occur in the facility. Often, these decisions are happening at the corporate headquarters or with the CMO and a nurse manager on the unit or the director of IT has no visibility to the intended migration. Imagine a world where a Rehab facility doubles as your med surge department and the protective solutions that help heal the patient cannot easily be shared.  Communication becomes critical with every purchase and longevity cannot be expected.

In light of these risks, hospitals must be diligent and planful in their approach to the future. While there is no silver bullet, understanding where the value lives in the technology will be critical to ensure that it can be flexibly applied across the healthcare continuum. For example, pulling the intelligence out of the hardware and pushing it into the cloud will help facilitate rapid change as the healthcare continues its rapid evolution. Also, customers must demand ROI models that break even in year one to indemnify these risks. Do you have other examples of how you are addressing these and other risks when you purchase new technology? Please leave a comment below and share this article with your peers.

Andrew Robinson - Strategy / Technology / Healthcare - #ONO / #SNO