AHA (American Hospital Association) market analysis trends reported an increased number of mergers and acquisitions since 2010 (156 in 2010, with Becker review reporting 186 between August to December 2012).
Healthcare consolidation is driven by the need to gain operational efficiency and improve margins. In the same context, the paperless transition mandated by PPACA has been in full swing and continues to move forward, making EMR as the main backend IT component to support hospital operations.
Healthcare IT organizations are now facing the difficult task of integrating EMR systems where the lack of interoperability has been well documented.
Healthcare IT is presented with two distinct options; however, neither one – will meet the expectation of the consolidation objectives:
- Leaving multiple EMRs in place with no integration and rely completely on manual processes to smooth the operations between the new consolidated healthcare institutes: This option simply defeats the objective of consolidation, looking at gaining efficiency through M&A.
- Rip-n-Replace one EMR system: The price tag for installing an EMR system is ~150 K USD (up to 200 K USD) per bed, putting a price tag of 150 M to 200 M USD for a 1000-bed hospital. Furthermore, the rip-n-replace option has significant implications on a healthcare institute’s operation. This ties directly to top line revenue of the hospital system. So, not only is the price tag is steep, the cost for operational disruption needs to be accounted for.
There is a third and better alternative. The alternative calls for a layer of an integrated solution on top of the disparate EMR systems to seal off the impact of operational disruption. Would IT technology provide such alternative to healthcare?
Service Oriented Architecture (SOA) introduced in early 2005 has the technology to address this challenge. SOA has matured and proven that such challenges can be addressed without living with the pain or rip-n-replace of existing infrastructure.
SOA protects existing IT investment in place and creates a layer on top to ensure information flow happens between the diverse back end infrastructures. One good analogy of the concept can be derived from use of your ATM card.
- You are a Wells Fargo customer. You need cash and the ATM machine in front of you is from BofA (Bank of America).
- You put your bankcard in the ATM machine. The ATM machine presents you with universal request: Cash withdrawal.
- In this example, does Bank of America demand that Well Fargo transfer your balance amount to be stored (or exchanged) to a 3rd party storage? Or even, would you accept such arrangement? Or does Bank of America just provides the ‘media’ where access to your Wells Fargo information can be presented ‘universally’ to you? Your updated bank account balance still resides with Well Fargo, not with Bank of America or any 3rd party exchange.
What do we learn from the above analogy?
- Patient medical information is universal and can be mapped to a universal data model.
- The actual data – in this case, patient medical data, can reside in where they are currently resides – in its existing repository. It is best to have a single source of truth instead of data duplication.
- To the consumers, it is an integrated system. To care providers, if they are presented to a universal dashboard, presenting the same patient medical information, regardless of data source, it is an integrated solution.
- To healthcare management, it is the best alternative, no costly rip-n-replace of EMR system with major operational disruption or lives with the major cost inefficiency brought by two different operations.
Zoeticx solutions are based on SOA, deployed on the cloud to provide the above alternative. Not only it is economical, it ensures a successful IT integration in healthcare, delay or invalidate the
decision for any the substantial cost of rip-n-replace on any backend EMR system.
(1) Becker Hospital Review – M&A activities
(2) AHA – Organizational trends 2012