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Un-complicating Healthcare IT

4 Ways You Could Be Depleting Your Hospital IT Budget

Dec 3, 2015 4:25:30 PM Posted by Jim Green | Senior Healthcare IT Consultant

Monitor your hospital IT budget for these 4 overspend offenses.Are you spending a small fortune on hospital IT projects and seeing little return on investment (ROI)? The problem could stem from a variety of issues, some of which are unrelated to the technology itself.

In this article, we explore four common community hospital IT budget pitfalls and ways you can avoid them.

1) Misidentifying the problem

The first step in fixing any community hospital IT problem is correctly identifying the problem – or at least correctly describing the problem without jumping to a conclusion too quickly about what the solution is. Especially when your IT team is working its hardest to respond to clinicians’ complaints and get fixes in place as quickly as possible, you can end up wasting time and money on solutions that don’t address the core issues.

When you’re looking to address an IT issue, take time to look at your systems and processes holistically. Don’t assume that your technology problem necessarily has a pure technology solution. And, don’t assume that if the fix does involve new technology, the area you need to invest in is the same as the one identified in user complaints.

The cost of jumping to a wrong but logical conclusion can be quite high. If you blame the wrong piece of equipment or software, you could end up spending tens or hundreds of thousands of dollars (or even more) on unnecessary replacements and upgrades that don’t fix the underlying issue and don’t deliver real value to your clinicians, patients and organization.

You don’t want to be that hospital that mistakenly spends half a million dollars on a new storage area network (SAN) system to solve your electronic medical record (EMR) system response times, when you had adequate SAN resources all along and needed process tweaks. And, you don’t want to replace that EMR all your clinicians complain about when what you really need is an updated user interface module, effective training and processes better aligned with the technology.

Solution: Don’t enter any problem-solving project assuming you know what the fix is, and avoid asking a vendor (or even your own IT team) for a particular fix. If you focus on describing the problem and what you’re trying to accomplish, you’ll free your technology experts to develop the best solution, which may be different from the one you would have asked for.

2) Investing in a tool without investing in training

Great technology delivers an effective ROI only if your team can effectively utilize the technology. And most everyone agrees it’s important to train clinicians and non-clinical staff on the technology they need to use in their day-to-day functions.

But, the importance of training extends beyond the exam room and business office as well: Make sure that the IT staff is well versed in the use, maintenance and troubleshooting of your community hospital’s IT systems, and that you don’t allow any single points of failure to develop in the form of “pockets of knowledge.”

Institutionalize knowledge-sharing, cross-training and documentation. Otherwise, you risk getting stuck with an $80,000 piece of technology that nobody (except that systems engineer who just left) knows how to use, burdening the institution with zero value for its investment.

Solution: Remember that acquiring technology is just the beginning. To get value from your technology purchases, you must also invest in training your team on its effective use. And, that’s not accomplished with a one-time session. To continue getting value, you need to continue training.

3) Spending tactically, not strategically

This leads to our next type of budgetary miscue: investing in technology that doesn’t align with your hospital’s business needs. Every hospital should have an IT plan, and every IT spending decision should be tied to that plan, which exists to clearly spell out the hospital’s technology requirements and vision.

When you make decisions outside of that plan, you risk purchasing equipment that doesn’t fit your requirements, work processes, budget and IT staff’s capacity to deliver. For example, you don’t want to spend $30,000 on that cool new telemedicine unit if your clinicians won’t use it and your business needs don’t align with it.

Tying your IT plan to your business plan allows you to specify your capacity requirements with an eye toward the future so you’re neither painting yourself into a corner nor buying server and switch hardware that will be obsolete long before you need it.

Solution: All good tech spending starts with a good IT plan, which is tied to your overall business plan. As soon as you divorce your IT spending decisions from your IT plan, you run the risk of dramatically reducing your ROI.

4) Under-spending or investing in the cheapest solution

Sometimes, overspending on IT is not the issue. Often, it’s just the opposite. Especially with the clock ticking on federal mandates for EHR usability, you don’t want to procrastinate on making prudent IT investments or find yourself stuck with no plan to deal with existing IT issues.

Community hospitals that use “lowest cost” as their primary selection criterion might save money up front, but they’re setting themselves up to possibly pay much more over the long haul – in support issues, poor network and application performance, and issues with wireless connectivity/performance.

Look for the solution that best meets your staff productivity requirements and aligns with your overall IT strategy, even if it carries a higher initial cost. The fruits of this decision will often lead to lower total cost of ownership (TCO), better user satisfaction and less IT pain.

Solution: Of course, cost should be a factor in your technology purchase decisions, but it should never be the factor. By all means, keep an eye on what each line item costs, but make sure that you’re not economizing in ways that have a significant negative impact on the value you’ll be able to derive from the technology.

Want to learn more about getting the most out of your hospital IT investment? Read our free whitepaper, 7 Best Practices For Community Hospitals.

Free Whitepaper: Get More Value From Your Technology: 7 Best Practices For Community Hospitals

Jim Green | Senior Healthcare IT Consultant

Jim has over 20 years of experience in developing, managing, and implementing IT projects and solutions in healthcare, publishing, and insurance industries. Jim is currently serving hospitals and clinics in a CIO role, specializing in EHR optimization, process improvement, IT planning, and leading IT teams.