Healthcare Technology Market Insights - Q4 2024

by Jeb Corley , Vice President, Information Technology

Historically, healthcare organizations have relied on traditional consulting firms for their strategic projects. While these firms offer expertise, they often come with hefty price tags and limited flexibility, leaving many organizations with a substantial financial burden.

The healthcare industry is facing increasing pressure to contain costs while maintaining high-quality patient care. Prior to Covid (and even during it), consulting firms were largely the best way to get an initiative done. That said, studies show that health systems consistently did not see high ROI from their project implementations and were overall unsatisfied.?

That leads to the question: why do health systems, which largely operate on single-digit margins, continue to operate this way?

I’ve asked many of my clients this same question, and the answers tend to be the same:

• “Our projects are too important not to get the experts involved.”
• “We need a single source of accountability.”
• “Talent supply is low, and top-tier talent are working for consulting firms.”
• “Our contract we signed with our consulting partner doesn’t allow us to augment or change the number of people provided to us, even if we aren’t getting the results we want.”

These are all fair points, though most consulting firms have relationships with staffing firms to help them staff up for engagements. Additionally, many EHRs and ERPs have been around for long enough that there are ample talent on the market that can be recruited by staffing firms for half the cost of what traditional consulting firms are charging.

Speaking of ample talent on the market, the recent change in federal interest rates has led to a decrease in capitalized projects in the United States. With lower capitalized projects, many consulting firms have resorted to layoffs and furloughs of highly experienced technology personnel. According to TechServe Alliance, technology unemployment is at 2.4%, though I do expect this number to grow throughout the upcoming months, creating a highly qualified pool of talent.?

What does all this mean for the end users in healthcare and insurance??

For the first time in decades, experienced technology consultants are leveraging their networks and staffing firms to find their next project, rather than relying solely on traditional consulting firms. This presents a unique opportunity for healthcare systems to engage highly skilled, former consultants at a significantly lower cost. With tight operating margins and a backlog of delayed technology initiatives, these savings can enable health systems to accelerate their digital roadmap and gain greater control over project execution

At Medix, we specialize in creating customized Ready-Made Teams (RMTs) to help healthcare organizations achieve their goals. By leveraging our deep understanding of the healthcare industry and our extensive network of experienced professionals, we can quickly assemble teams that meet your specific needs. Our streamlined process eliminates the time-consuming task of interviewing, allowing your management team to focus on other priorities.

Ready-Made Teams Case Study:

Medix partnered with a major health plan, supporting their federal business line, to modernize their 20-year-old hybrid application, transitioning it from on-premises to a cloud-native architecture on Azure. The goal was to enhance scalability, improve access to care for veterans, and increase competitiveness for federal contracts.

Challenge:

To achieve this modernization, the health plan required a significant expansion of its development team. They envisioned forming 10 Scrum teams, which would necessitate hiring 80-90 new personnel. However, due to time and resource constraints, traditional hiring methods were not feasible. Outsourcing to a consulting firm was considered but presented budget concerns.

Solution:

Medix offered a unique solution: Ready-Made Teams. Medix took on the entire recruitment and onboarding process, providing fully staffed Scrum teams to the health plan. This allowed the client to focus on project management and internal initiatives, while Medix served as an extension of their development team.

Result:

Medix successfully delivered two Scrum teams in August and two more in September. This approach saved the client money, gave them architectural autonomy, and alleviated the burden of extensive interviewing, enabling them to prioritize strategic planning and achieve better results.

If you're interested in learning more about how our RMTs can help your organization, please don't hesitate to contact me or visit medixtechnology.com.