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HIStalk Interviews Bill Grana, CEO, HCTec

September 21, 2020 Interviews No Comments

Bill Grana, JD, MBA is CEO of HCTec of Brentwood, TN.

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Tell me about yourself and the company.

I am a technology entrepreneur, going on nearly 30 years. I have been involved in starting, investing in, and leading high-growth tech product and tech services companies, many of which have been related to healthcare or HIT. I’ve been with HCTec for three years.

We are an IT services business that is focused exclusively on the hospital system sector and other specialty providers. The tagline of a German multi-national chemical company used to be, “We don’t make the products you use. We make the products you use better.” In HCTec’s case, we don’t make the technology that is used by hospital systems. We make the technology work better through our team of talented IT professionals with specialized IT skills.

How has your business changed with the pandemic?

Like many other businesses, we transitioned to full remote work in early March. I’m very pleasantly surprised and proud of my team for how well that they executed that change. We haven’t missed a beat in terms of service delivery with our clients, more specifically with our two primary business lines of consulting and managed services.

We’ve seen the consulting business negatively impacted. As hospitals experienced stress, particularly financial stress, one of the first things to be cut was contingent labor. A number of our contract consultants were released. But we are seeing that pick back up. On the managed services side — where we provide both an IT help desk solution as well as application support for current generation and legacy systems, primarily focused on the enterprise EMR — that business has stayed robust. We have seen huge volume increases on the help desk side tied to the transition to remote work, but particularly telehealth. So it’s been a tale of two different worlds in terms of how COVID has impacted our business.

Is remote work for go-lives and support here to stay, or will onsite work bounce back once travel limitations ease?

Much of that is going to be here to stay. There is no reason to revert back to what it was pre-COVID, assuming that from a service delivery and outcome perspective, it can be equally effective. From a cost perspective, it’s certainly better for hospitals to do it that way. In many cases, it’s better for the consultants who are providing the work to be able to do it remotely, whether it be from an office setting or from their own homes, rather than having to get on a plane at the beginning and end of each week.

How are health systems prioritizing their IT projects differently?

The projects that were put on hold in March and April are beginning to be resurrected. The contingent labor that is necessary to execute those projects is coming back as well. I think that the demand will return to pre-COVID levels. We will see more openness to remote work by consultants. Many of our hospital clients have moved the entirety of their IT organizations to remote work. That will give them a greater comfort level that their vendors and partners can do the same thing.

The COVID experience has opened the eyes of health system IT departments and leaders to the importance of having partners that can be nimble and react quickly in unforeseen circumstances like this. We have demonstrated that in a number of ways.

I hate to use the word “outsourcing,” because it is considered a dirty word in many circles. But I think we will see health systems take a hard look in the mirror, not just with IT functions, but more broadly, in asking the question, what are truly our core competencies? For many hospitals, that is provider support and high-quality patient care. Everything else, in many cases, can be performed as effectively or more effectively at a lower cost by a partner or some sort of alternative labor arrangement beyond just hiring full-time staff.

We’ve seen Optum announce a couple of deals over the last 12 months where they are taking over all non-clinical operations. I think that trend will continue. Maybe not necessarily a full partnering, but more of a best-of-breed approach, where companies like HCTec will step in and provide services that are important, but that aren’t necessarily core competencies of hospital systems.

We’ve seen those deals ebb and flow, however, where hospitals outsource core functions but then bring them back in-house within a few years. What are the success factors in making outsourcing more than just a short-term experiment?

There has to be a clear cost justification, where the partner can provide the same service at the same or lower cost. The same principle applies to quality, where there must be service level agreements and metrics that the vendors are held to, with penalties or other consequences to the extent that they fall short.

These things go in cycles, but I believe that the COVID experience will encourage hospitals to look at partnering with firms in non-core functions in a much bigger way than we have seen.

How do you explain strong investor interest in the health IT sector even as its health system prospects are struggling, at least temporarily?

Some categories have been really hot. A lot of money has been invested in telehealth following the boost it received as the result of COVID. Artificial intelligence and analytics solutions represent huge opportunities in the long term. Outside of the IT segment, a lot of investment has gone into services side and into different specialty ambulatory practices as well.

I don’t know that any of those things will last into the future and provide an opportunity for growth. Sectors get overheated. It’s hard to fathom the valuations that go along with some recently announced deals. I guess my small brain is not smart enough to get wrapped around that.

But overall, I think the health IT segment is a very attractive long-term investment sector. As we think about what healthcare looks like in the future, it involves a greater adoption, prevalence, and reliance on technology to support clinical service delivery and hospital operations. We will certainly not see less of that in the future. You could probably say this to a degree about any market sector, but I healthcare is particularly ripe for technology that can benefit its performance.

Telehealth boomed early in COVID, but now it seems to be cooling off everywhere except on Wall Street. How will it play out in the next two to three years?

We’ve already seen the levels pull back from what they were as people become more comfortable returning to their physician’s office. But there are certain use cases for telehealth. Behavioral health is one example, where it can arguably be delivered even more effectively via telehealth, in a way that makes the patient more comfortable or more apt to seek help where there may be some behavioral health challenges.

But clearly, if you need a physical — at least given where we are with technology right now – you have to go to the doctor. Over the next five to 10 years, I think that could change with different and improved patient-facing technologies and monitoring devices, where much of your regular physical could be done from home or outside of a doctor’s office.

What technologies hold promise now that EHRs and stable infrastructure are universal?

It’s probably overused, but the digital front door, creating a single entry point for customers, or patients in this case, to provide an improved overall digital experience. It is disjointed with many health systems and across providers today. It’s hard to navigate, even for folks who are technology savvy and Millennials. Effort and emphasis will be placed on that.

You see the same thing in the financial services marketplace, even though it’s probably several years ahead of healthcare. I’m on the board of a financial technology business and I chuckled at our last board meeting, where they were talking about all these banking institutions that are focusing on the customer digital front door. The exact same thing is happening in hospitals.

We are in the nascent stages of bringing a mature experience to market. It’s about the customer, or again, in this case, patient experience. As systems compete for patients, it will be important to give them a strong digital experience.

Will small health systems lose to the bigger ones that just keep getting bigger, as happened in banks that bet big on expanding outside their regions and deploying technology such as ATMs and online banking that customers valued?

It is probably not necessarily the best thing for the marketplace, but I do think that that’s the case. COVID has accelerated that with the financial stress that has been placed on smaller institutions that don’t have the balance sheet to weather the storm. We’re already seeing consolidation happen that would not have without COVID. The same holds true for the ability to invest in these digital and patient-facing tools that drive the whole experience.

What will the company’s direction be in the near future?

The future is bright, despite the fact that we still have COVID hanging over us. It will dissipate, hopefully sooner than later. From a service portfolio and capability perspective, we are well equipped to meet current and future demand, and with some incremental changes, to realize some additional opportunities.

We’ve put a great team in place. I wouldn’t have wished COVID on us, but it has given us a little bit of breathing room to focus on operational improvement that is already making a difference in our current business of quality of service delivery to our clients, and will continue to make a difference in the future. Growth and improvement remain continuous and will be future themed.

Do you have any final thoughts?

The pandemic has put healthcare clinical workers in the spotlight in a well-deserved way that was not seen previously. We also need to recognize the people who are behind the technology that is used by hospitals, the improvement in healthcare delivery and the extra hours and work that they put in during this challenging time.

Technology doesn’t always work as it was designed, and in those cases, we need experienced people with specialized skills to provide support and continuous care and feeding to maintain the health of these hospital tech ecosystems. That is the essence of who we are and what we do at HCTec.



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