How Vendor Control and IT Philosophy Impacts Costs

“Best in class”, “Don’t put all your eggs in one basket”, and “control your own destiny”.  These were all common business adages that I referred to often as my professional career started and have been the cornerstone of many of my business decisions since.  However, over the past 10 years, it has become painfully obvious to me that for a variety of reasons our current leaders do not consider these adages relevant when making important  decisions.  This is certainly apparent with system requirements, vendor selection, and/or purchase of many major healthcare systems.

In the early 2000’s, our healthcare backbone was modified to primarily function on ANSI standard transactions. These transactions included claims, ERA’s, eligibility, claim status and authorizations.  A significant reason to embrace the  ANSI decision was an attempt to standardize and reduce some of the costs of providing care to patients. Has this happened? Infrastructure costs surely have not decreased over the years and patient care because of ANSI has not improved. One could assume the standardization of processes has not had a positive impact on either cost or service.

One premise of our economy is the belief that competition creates better value and more innovation than when competition fails to exist at all.  Our healthcare systems are developing into islands where the customer can never get “best in class” service over time because they put “all of their eggs in one basket” and have no plan on how they can “control their own destiny”.

IT for many years in the past was blamed for the lack of progress, and at times, a valid observation.  Our near future predicament will demonstrate how management decisions regarding system requirements and vendor selection have made it impossible to build a fiscally responsible operating infrastructure that is defined by "best in class", "don’t put all your eggs in one basket",  while "controlling your own destiny" philosophies and adages.

In the coming weeks ahead we will explore the following topics.

How lack of interoperability is an expensive mistake
How the C suite is ill prepared for the long term IT decisions

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