The False Promise of Hybrid SaaS: Why Healthcare Needs to Stop Making Excuses

Khalid Turk's recent analysis of Epic's potential SaaS transformation provides an excellent framework for discussing this critical industry issue. His structured approach to examining the current state, future possibilities, market forces, and practical compromises helps clarify the challenges ahead. I particularly appreciate his recognition of the high IT costs in the current model, interoperability challenges, and the inefficiencies of parallel operations - all key themes from my previous articles.

However, his conclusion that Epic should pursue a hybrid model - SaaS for smaller organizations and dedicated instances for larger ones - falls into a familiar trap that has consistently held healthcare back from meaningful transformation.

Let's look at the evidence from other industries:

Enterprise SaaS is Proven at Scale

The notion that large organizations require dedicated instances is contradicted by virtually every major enterprise software category:

• Salesforce runs organizations from small businesses to massive enterprises like Toyota and Walmart on a single platform
• ServiceNow manages complex workflows for organizations like Deloitte and maintains ITSM, customer service, and HR processes for thousands of companies on one platform
• Workday handles HR and Finance for organizations with hundreds of thousands of employees, managing complexity at scale without compromising security or performance

These platforms maintain high performance, security, and customization capabilities without splitting their platforms into "enterprise" and "standard" versions. They've proven that the technology exists to handle both scale and complexity in a multi-tenant environment.

The "Healthcare is Different" Fallacy

The argument for a hybrid approach stems from a common healthcare assumption: "We're different, so we need a special solution." This thinking has consistently led healthcare to pay premium prices for commodity services and maintain inefficient operations long after other industries have modernized.

Yes, healthcare has unique requirements around patient safety, regulatory compliance, and clinical workflows. But modern SaaS platforms have solved equally complex challenges in other regulated industries:

• Financial services manages real-time transactions and regulatory compliance
• Government agencies handle classified information and strict security requirements
• Manufacturing coordinates complex supply chains and quality control processes

Modern SaaS Capabilities Enable Scale and Flexibility

Today's enterprise SaaS platforms offer sophisticated capabilities that enable customization without compromising standardization:

• Feature flags and configuration management allow organizations to control their feature rollouts
• Tenant-specific workflows and rules engines enable custom processes without custom code
• API-first architectures support deep integration and customization
• Role-based access control and sophisticated security models maintain compliance
• Modern deployment patterns enable regional data residency and regulatory compliance

These capabilities make it possible to maintain a single platform that serves organizations of all sizes while meeting their specific needs.

The Hidden Costs of Hybrid

Khalid's suggested hybrid approach would perpetuate the very inefficiencies that drive up healthcare costs:

• Split development efforts between two platforms
• Divided innovation resources
• Continued maintenance of legacy architectures
• Perpetuated interoperability challenges
• Delayed modernization for the industry

Moreover, it would create a two-tier system where smaller organizations get modern architecture while larger ones remain stuck with legacy approaches. This divergence would make true interoperability even harder to achieve.

This also fails to acknowledge that large healthcare systems are drowning in the cost of running Epic and at a higher burn rate.

The Path Forward

Rather than accepting a compromise that perpetuates healthcare's technical debt, we should push for true transformation. A single, sophisticated platform that scales from small clinics to large health systems isn't just possible - it's the proven model in every other enterprise software category.

Yes, this transformation will be challenging. Yes, it requires rethinking how we approach customization and control. But the alternative - continuing to maintain parallel infrastructures and redundant operations - is ultimately more expensive and less sustainable.

The question isn't whether large healthcare organizations can run on a multi-tenant SaaS platform - Salesforce, ServiceNow, and Workday have proven it's possible. The question is whether healthcare will continue making excuses or finally embrace the future of enterprise software.

I'm not ignorant of the complexity of making this move. I'll address the path forward in a future article. However, I don't think taking Epic off the hook on this is the best approach. As I'm fond of telling my teams. You are going to solve a set of problems today at work. Choose the problems worth solving.

Best regards,

Bill