Readers Write: The Cost of Doing Nothing: Five Learnings from the Build versus Buy Debate
The Cost of Doing Nothing: Five Learnings from the Build versus Buy Debate
By Kimberly Hartsfield
Kimberly Hartsfield, MPA is EVP of growth enablement at VisiQuate of Santa Rosa, CA.
It’s a conundrum that health system executives regularly face. Build a much-needed software solution in-house or buy it from a vendor?
Once hospital leaders identify the need for a solution that requires new functionality, the debate is on. Revenue cycle management (RCM) solutions are no different. While many hospital IT departments are no doubt capable of designing, constructing, and implementing new RCM solutions, leadership must decide whether taking this route is likely to yield the best business results.
Often, it starts with hospital leaders surveying vendors, seeing the price tag, and deciding to embark on the journey to complete the project internally, with the premise that it will be at a much lower cost. The decision frequently backfires. Rather than making the investment and having the technology that hospitals need to support their RCM operations efficiently, do-it-yourself health IT projects often end up taking years to fail and costing hospitals far more than if they would have signed with a vendor in the first place.
Health IT leaders see a pretty Tableau or Qlik dashboard and think, “We can do this ourselves.” When it comes to data visualization, they probably can. What they don’t consider is that the data aggregation, normalization, and transformation work that happens under the hood is actually the challenging part of RCM transformation.
The following are factors to consider when considering whether to build or buy a new RCM solution.
Complex health IT projects require more than health IT
IT departments sometimes believe that because they have their own developers and analysts, they can design, build, and implement complex health IT systems on their own. However, complex health IT projects require far more than technical skills. There must be business knowledge and experience married to that technical skill. Frequently that is where the projects break down because the people with the business knowledge already have full time jobs in the organization that are not related to building a platform.
Indeed, the reality of large IT projects is that they frequently exceed timelines, go over budget, or sacrifice important functionality. For example, one in six large IT projects have an average cost overrun of 200% and a schedule overrun of almost 70%, according to Harvard Business Review. Similarly, 56% of IT projects fall short of the original vision, according to a study by McKinsey.
It’s all about speed to value
Leading RCM vendors have been waking up every day for years thinking about how they can work to evolve revenue cycle analytics and deliver value and ROI to clients. Vendors have the benefit of having seen and evaluated RCM systems from healthcare organizations of many different shapes and sizes across the country. They understand best practices, having implemented RCM solutions alongside numerous electronic health records systems. This experience enables the ability to identify idiosyncrasies that hide within data and frequently uncover gaps that clients didn’t know existed.
While hospital do-it-yourself RCM projects may take years to complete, leading vendors can perform an installation in 90 days, delivering immediate insights and ROI.
RCM processes are broken and technology is the fix
It’s an unprecedented time for healthcare. There is no model for the circumstances the industry is undergoing, given labor shortages, supply chain constraints, and the financial after-effects of the COVID-19 pandemic. Across the nation, hospitals are pushing for more automation to augment staffing issues, letting their staff focus on tasks that require decision making, not repetition.
In many cases, RCM processes are broken, and technology is the only route hospitals can take to do more with less. Hospitals must lean into technology and automation, leveraging data to build predictive models and using artificial intelligence and machine learning to boost efficiency.
Unless hospitals are large, mature, and complex, they typically don’t have the resources to handle a large RCM project internally. Smaller hospitals often lack resources like a database administrator, a data warehouse, and data scientists who can build predictive analytics models, for example.
RCM processes continually evolve
It’s easy to forget that RCM projects typically are not “build it and you’re done” solutions. In addition to building RCM solutions, hospital IT departments must provide ongoing support and maintenance. These projects continually evolve, with new requests for additional reports or functionality upgrades. This often requires analysts, engineers, and other highly paid technical resources that are difficult to find and are only growing more expensive.
Further, it’s an open question as to whether build-it-yourself solutions deliver enough value and differentiation to be worth the time, expense, and effort. For example, if all an organization’s competitors can simply build their own systems to accomplish a certain objective, then that system is hardly a source of competitive advantage.
Move from descriptive to predictive
RCM employees cannot manage by spreadsheets. The industry is moving beyond rows and columns. RCM employees need to be able to visualize data to detect patterns to quickly identify outliers and manage by exception. Additionally, hospitals must move their RCM processes beyond descriptive analytics to predictive and prescriptive analytics.
It is no longer acceptable for hospital leadership to simply understand what happened yesterday. Hospital leaders must look to the future with the ability to anticipate and predict what will happen tomorrow, next month, or even in six months. Through automation and advanced data analytics, leading RCM solutions drive those insights.
I contend that the bigger issue is this. AI could potentially be very helpful, while also causing new problems. The…