August 15, 2024
The CrowdStrike global IT outage on July 19 impacted numerous industries, but perhaps none more alarmingly than healthcare. Unable to access crucial medical records for patients, an article on Healthcareitnews.com reported, some providers went old-school, using pen and paper to record important information until their flagging Microsoft systems were back up and running. Other hospitals cancelled non-urgent surgeries, procedures and doctor visits until the situation was remedied.
Fortunately, though not without considerable toil on the part of IT professionals, that happened quickly—hours for some, days for others—and avoided catastrophe. Next time—and there will be a next time, experts warn, because there’s always a next time—things may well be a lot hairier. For healthcare providers, that takes on a whole different meaning.
When IT snafus (whether serious but easily fixable IT outages or far more dire cybersecurity breaches) impact life and death, as they do in medicine, and not merely air travel or manufacturing processes, having effective preventative measures in place isn’t merely good business—it’s a Hippocratic imperative. The tech version of “Do no harm.”
One proven solution, and it’s not a new one: Outsourcing IT operations. As Becker’s Hospital Review reported this past February, in 2023 healthcare provider Care New England (based in Providence, RI) shifted 160 of its IT staffers to an IBM spinoff (Kyndryl) in order to, as CIO Tom Gregorio put it, “reach the next level as a health system.”
“I have 30 years experience,” Gregorio said. “I’ve been on the other side of trying to build that yourself. And I can do it. But it’s a different situation when you have a partner where that’s all they do versus the fire that’s brewing for the day in a hospital environment. So for us, it was about upscaling to meet the future of our digitization as a health system, and also to find a partner that can work with us to get us there as safely as possible.”
Gregorio called the move a “great decision from an infrastructure perspective” because Kyndryl’s 90,000 IT experts blanket the earth. As a result, help is always available no matter the situation or hour.
Obviously, not all healthcare organizations—particularly smaller mid-market ones— can afford the highest levels of IT outsourcing. But most of them can afford some level of IT outsourcing. In fact, most of them can’t afford not to outsource, as one of its primary advantages is cost reduction. Other factors include technological advancements, improved patient care, better data security and quicker adoption of new technology. Are there potential disadvantages, such as the possibility for diminished customer service? Yes. But overall, insiders say, the positives tend to outweigh the negatives—as long as the approach to outsourcing is measured and strategic.
As Tina Wheeler, healthcare sector leader for Deloitte, told Chief Healthcare Executive, “Hospitals need to figure out, health systems in particular, and maybe even payers, … what are they good at? And what areas would they want to consider outsourcing?”
She added, “You’ve got rising labor costs, higher interest rates, and all these financial pressures and determining what back-office functions could be outsourced and other ways to do things … That’s a huge trend that we see as far as where you can save money…Everything from rev cycle, billing, claims, finance, HR, clinical administration, supply chain—all of those things can be entirely or partially outsourced.”
According to Statista:
- Revenue in the IT Outsourcing market is projected to reach US$541.10bn in 2024.
- Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 8.48%, resulting in a market volume of US$812.70bn by 2029.
- The average Spend per Employee in the IT Outsourcing market is projected to reach US$152.00 in 2024.
This write-up from Magellan Solutions nicely encapsulates the benefits of outsourcing, noting that because the healthcare industry relies so heavily on tech (including for electronic medical records, data analytics and cybersecurity), “outsourcing allows organizations to access modern IT solutions and expertise with minimal in-house resources. Healthcare IT outsourcing providers can implement and maintain EMR systems, analyze large data sets to drive informed decision-making and implement robust cybersecurity protocols to protect sensitive patient information.”
Whether healthcare organizations opt for an MSP like Mindsight or a massive organization like Kyndryl depends, of course, on specific needs and budget. As a June 2023 survey by Bain & Company and KLAS Research revealed, “nearly 80 percent of hospitals and health systems materially increased IT and software spending from 2022 to 2023, and about 75 percent expect to make ‘more’ or ‘far more’ investment in 2024.” Outsourcing is part of that.
Over at Care New England, CIO Gregorio told Becker’s, outsourcing to Kyndryl has “cut… system backup time in half.” He also predicted that more small healthcare systems would outsource IT.
“I think it works for organizations my size, maybe up to five hospitals,” he said. “The trend is there.”
About Mindsight
Mindsight, a Chicagoland IT services provider, is an extension of your team. Located in Downers Grove, IL we proudly serve customers across the area including Naperville, Oak Brook, Northbrook, and surrounding counties (Cook, Lake, Dupage, Will, Kane, and Grundy). Our culture is built on transparency and trust, and our team is made up of extraordinary people – the kinds of people you would hire. We have one of the largest expert-level engineering teams delivering the full spectrum of IT services and solutions, from cloud to infrastructure, collaboration to contact center. Our highly certified engineers and process-oriented excellence have certainly been key to our success. But what really sets us apart is our straightforward and honest approach to every conversation, whether it is for an emerging business or global enterprise. Our customers rely on our thought leadership, responsiveness, and dedication to solving their toughest technology challenges.