Aug 04 2020

How Healthcare IT Teams Can Cut Costs During the Pandemic

Health IT leaders have long worked to control costs. Detrimental financial effects of the pandemic are causing them to shift priorities and think differently.

IT spending has changed drastically during COVID-19, putting the onus on leaders to explore new ways to ensure care continuity with limited funds and staff resources.

U.S. nonfederal hospitals lost approximately $161.4 billion in revenue during the four months after the pandemic was declared, the American Hospital Association notes, while the net financial impact of COVID-19 hospitalizations during that time will be $36.6 billion.

Despite these challenges, IT teams “need to be agile to meet providers’ needs so they can continue to see patients and deliver care in the current environment,” Andrea Daugherty, director of enterprise IT security and resiliency for the University of Texas at Austin Dell Medical School and UT Health Austin, said in a recent CDW Healthcare webinar.

Proactive efforts that may be considered include infrastructure assessments, software and hardware management lifecycle analyses and managed services to ensure efficient operations, experts say. A massive shift to remote work is also likely to continue, reducing commercial space.

But effective plans can’t take shape without a detailed roadmap, notes an April report from McKinsey. CIOs must fully define their arsenal of cost-reduction measures to determine which cuts are possible and when.

They also need to examine IT services that could be scaled back (as much as 30 percent of IT spending can be saved via measures that leverage flexibility built into the cost base, McKinsey finds) and focus on new workflows via virtual care and automation.

Ongoing and future plans, meanwhile, must fit into a far different landscape. “The CIO needs to balance cost-reduction efforts with the need to invest in a changed business operations model for the new normal after the crisis,” the report notes.

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How to Rein in Costs Now During Disruption

In a recent presentation for CDWs Tech Talk series, Darren Pulsipher highlighted the importance of IT cost control and reinforcing business stability both during and after disruption. To trim costs, he said, organizations should re-evaluate what they’re already spending money on, with a particular focus on the temporary solutions that were stood up during the initial remote work transition.

“If you don’t, then they become the de facto way of doing things,” said Pulsipher, chief solution architect for public sector at Intel. “And they may not be the most cost-beneficial way of doing it.”

While exploring these more permanent solutions can certainly help to rein in IT costs, Pulsipher noted that there are many solutions IT teams should be considering. Another, he added, is for organizations to look at abandoned resources that might be affecting their bottom line.

“Whether they’re zombie virtual machines that have been sitting out there or storage of copies made in the cloud, you’re paying for that every month,” he said. “So, you’ve got to watch out for things.”

Identifying redundant or outdated resources will be critical to saving healthcare IT teams money in the long run, especially in the public cloud.

VIDEO: Get highlights from the session to learn more about how to manage technology costs during business disruption and recovery.

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