Sep 06 2023

How to Apply Service and Application Rationalization in Healthcare

Many healthcare organizations could invest more in innovative solutions by curbing redundancy.

On average, IT operating expenses cost U.S. hospitals nearly $8 million per year. Eliminating redundant services and applications can help healthcare organizations cut those costs in the short term and improve quality of care over the long term.

“If we don’t trim unnecessary costs, then everyone pays for it,” says Chuck DeVries, senior vice president and technology officer for Vizient. “Healthcare becomes more expensive, and the systems you do have become more brittle.”

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What Is Application and Service Rationalization?

For healthcare IT teams, service and application rationalization is a strategic process focused on eliminating or replacing inefficient and outdated tools and consolidating redundancies. 

One goal is to avoid wasting money on technologies that no longer serve the organization. Another is to ensure clinicians have the most optimized tools available for better delivery of care.

“Rationalization is important because, without it, we’d find ourselves hamstrung by the cost and inefficiencies of our legacy solutions,” says Healthcare Outcomes Performance Company (HOPCo) CTO Bryan Bearden. “We need to be free of those to maximize the opportunity presented by newer digital assets that exist today.”

How Health IT Leaders Determine Which Services and Apps to Remove

When deciding which services and applications should go or stay, it's important to understand a healthcare organization’s current technology. “By knowing your whole ecosystem of technology,” DeVries says, IT leaders can better analyze whether tools are still useful. 

New AI tools need to be fed off of a graph or vector to understand prompts,” DeVries notes. “If your organization has an existing program with a vector database, that may be sufficient, so you don’t need to buy the latest and greatest thing.”

Mergers and acquisitions are a “built-in opportunity” for rationalization, Bearden says. “It’s not financially responsible for us to manage the overhead of multiple solutions that all do the same thing.”

When HOPCo acquires practices, he says, “We move them to our customized electronic health record, sunset old email solutions, and bring them into deals we’ve already negotiated volume discounts on.” 

Bearden adds that IT leaders must also be willing to let go of existing systems if there is a stronger alternative. He says HOPCo recently decided to replace a patient-reported outcomes solution they had built in-house because they acquired a startup company with a more robust patient engagement platform. 

“The old solution was fine, but this one will help us solve a richer set of needs,” says Bearden, explaining that in addition to gathering and analyzing PROs, the new system also enrolls patients onto clinical care pathways. “In situations where other tools meet some of those needs, we’ll replace them with this new platform.” 

DISCOVER: What is digital health and how is it evolving?

Ways to Approach Service and App Rationalization in Healthcare

DeVries recommends phasing out on-premises service and application tools in favor of cloud-based solutions because they are easier to update and replace. “You can change things in the cloud a lot easier than when it’s an installed product,” he says.

It’s also important to focus on simplifying IT management. “Automating system updates reduces device management costs, which optimizes IT administration,” says Jenn Roth, director of global product marketing healthcare at Microsoft.

Bryan Bearden
Rationalization is important because, without it, we’d find ourselves hamstrung by the cost and inefficiencies of our legacy solutions.”

Bryan Bearden CTO, Healthcare Outcomes Performance Company

Getting input from clinicians is another approach. Test a new service or application within a single care unit before deciding whether to replace an existing tool. “Capturing feedback through the process is important so that improvements can be made to help employees feel seen and heard,” Roth says.

Writing a case study about the unit’s experience can also help with a systemwide rollout, Bearden says. “If it seems like corporate is pushing it, we may have pushback. But doctors listen to other doctors.” 

In addition, Bearden recommends allowing the technology itself to inform future rationalization decisions. “If I’ve been limited to older software solutions that rely on more manual processes, then I may not even see what all could be improved or enhanced,” Bearden says. “I have to be open-minded to the fact that a software solution, and the technology partners who built it, can take me further down a path of process improvement.” 

EXPLORE: How to integrate smart hospital solutions into health IT ecosystems.

Overcome Service and App Rationalization Challenges in Healthcare

Research shows that nearly one-third of healthcare workers report feeling frustrated with technology several times per week, which can contribute to burnout. Sunsetting a service or application that clinicians are comfortable with can cause short-term problems. 

DeVries says it’s vital to provide quality training on the new systems to make the transition as seamless as possible. In addition, leadership should take the time to understand the challenges clinicians are facing and “talk about why you’re making changes. Explain how it’ll make their visits more efficient, their follow-ups easier and their prescriptions more concise,” he says.

Following through on eliminating services and applications is another challenge. Bearden says that it can be tempting to keep an old product to manage edge cases, but that it can be a slippery slope. Referencing HOPCo’s transition to a new patient engagement platform, he adds, “We have to be disciplined as a company to actually retire our existing PRO solution so that we don’t end up maintaining two solutions.”

LEARN MORE: How application modernization helps healthcare organizations protect patient data.

How Application Rationalization Connects to Digital Transformation

As technology needs change, rationalization is vital for healthcare organizations that strive to keep up. “It’s about evolution, not revolution or saving dollars,” DeVries says. 

The growth of telehealth is an example of an event that spurred rationalization. “Three years ago, none of us would’ve said, ‘I want to switch all my phone calls to video chats,’” DeVries says. “But we’ve changed how we work and interact, and that’s true for healthcare too.” 

Rationalization is also vital for digital transformation. Without it, Bearden says, healthcare organizations may not have room in their budgets to explore innovative solutions. “If we don’t rationalize, we end up spending our budgets on legacy or duplicative platforms. Rationalization clears the rubble so that you can have true digital tools in your belt to drive patient outcomes.”

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