...an economic Value Business Case That Makes Your Job Easier.
By Keith Belton | January 23, 2020
The Annual J. P. Morgan Healthcare Conference – the first major healthcare conference of 2020 – is a must for healthcare investors and vendors, providing a window into tectonic industry shifts. One clear takeaway this year is the contrast between accelerating product innovation – expressed by the sheer growth of new technology, medical device and pharmaceutical companies and offerings – and the limited funds available for provider organizations to invest for operational benefit.
What’s driving this contrast? Margins for care delivery organizations are increasingly narrowing. A Moody’s Investors Service study of 150 hospitals’ median operating margins showed they dropped to just 1.7% in 2018, down from 1.8% in 2017. For many health systems, this means stagnant or even declining IT budgets moving forward…and at a minimum, far more scrutiny on every new IT asset or platform under purchase consideration.
How can CIOs unlock the most potential for their hospitals and health systems when faced with a dizzying array of investment choices, while budget-constrained?
A good article providing guidance was penned by the consultancy Sage Growth Partners, who serve healthcare delivery organizations and other members of the ecosystem. Sage’s guidance – targeted at products and services organizations – is to both “provide concrete economic value that illustrates how similar healthcare organizations have been affected by their technology solution and prospect-specific economic value.”
Sage exhorts IT vendors to deploy economic value calculators as part and parcel of how they position offerings, in a consultative manner, to help healthcare executives make their own internal case. In particular, offerings which propose and can demonstrate top-line growth – utilization and revenue – which can be readily modeled using the prospect’s own operating data will be powerful assets in helping the CIO decide what technology bets to make in the next IT budgeting and planning cycle.
The guidance is also applicable to CIOs. IT leaders should, in Phynd’s view, demand that any serious proposal brought their way have a clearly understandable economic benefit, using the health system’s own operating data, to show how that technology provides top-line economic impact…with readily-accessible levers that can be tweaked to accommodate multiple scenarios, such as best case-worst case or probability-driven benefit ranges.
We at Phynd have taken this to heart. Our strong belief is that a central provider data hub – people, places, and services – provides top-line impact through a better consumer experience when searching and scheduling an appointment with a provider. We help our prospects show the before-and-after impact of deploying Phynd – using their own operating data.
More to come as we start 2020 and we head towards the next major healthcare IT conclave – HIMSS 2020 in March in Orlando, FL. Hope to see you there…