Tell me about yourself and the company.
I’ve been in the healthcare IT industry since 1998 as a hospital IT director, vice-president of large corporations, CIO of a large health system, and deputy CIO of a very large health system. Most of my career has been on the provider side. I’ve been CEO for about three and a half years at Parallon Technology Solutions.
Parallon Technology Solutions is a healthcare IT services delivery firm. We provide EMR implementation, optimization, and full and partial IT outsourcing or managed services. We have a pretty big staff augmentation business as well, providing contract labor to health systems. Those are the three main pillars — EMR implementations, IT support, and staffing.
Is the mix of your business services changing because of provider consolidation or other new trends?
You certainly hit on one of them right off the bat. The acquisition and divestiture process, both of them. Somebody is buying something and somebody else is selling. Both sides of that equation are creating a lot of work, primarily in infrastructure refresh and EMR implementation as the hospital system is brought on board. We’re seeing a lot of activity there.
Another big shift has happened over the last couple of years. In the wild and woolly days of Meaningful Use and EMR implementations, everybody had a lot of money and a lot of incentive to implement these systems, doing it fast and at any cost. It was a pretty easy time to be in our industry. As those systems sink in and become important to operationally support, we’ve seen the costs in healthcare systems and healthcare IT shops dramatically increase. Especially if somebody’s going from, say, legacy Meditech to Epic or Cerner. It’s a lot of operating cost increase.
Over the last couple of years, uncertainty – about reimbursement models, the exchanges, and non-clarity from the Trump administration about where hospital reimbursement is going — has created a drawback on non-essential investment in hospital IT systems. The focus is on looking at the sustainability and cost of keeping IT running.
We’ve seen a lot of opportunity present itself. We’re having a lot of discussions with a lot of health systems about how to reduce operating costs, whether by some type of outsourcing or by creating some type of shared enterprise-scaled environment. Especially when you look at small hospitals or small health systems. We view that as a big opportunity. They just don’t have the levers to pull to get the most cost-effective support mechanisms in place.
Has provider technology innovation suffered as high EHR maintenance costs eat up an even bigger percentage of IT budgets as they are cut back?
Yes. I’ve seen a shift into haves and have-nots in the health system. The medium-sized health systems, small health systems, smaller hospitals, community hospitals — most of them aren’t thinking at all about population health or business intelligence. To the extent they can get that from their package vendors, sure, but they’re concentrating on operations and looking at broader uses of data and broader uses of collaboration. Interoperability and integration have taken a back seat. That’s not a universal, but in a large number of hospitals, they just don’t have the dollars to invest in those types of tools and the resources to run them.
Are health systems using more remote contract IT workers?
Yes. It’s one of the things that we do. A mid-sized or small hospital system can take advantage of economies of scale. Our central remote team can support several hospitals at once in a shared environment. Hospitals get greater expertise as their share of a high-level person who they need only once in a while.
We put together groups of hospitals, understand their operations, and support them remotely. We’ve seen people increasingly be OK with that, especially if the company has good communication tools and the ability to talk with customers and report on actual experiences and actual outcomes. It’s more a case of having a good view of how your providers are doing as opposed to having to have them right in front of you.
Elbow support has to be there, especially for end-user support or to manage the unique things about a hospital or a health system, but I think remote support continues to be important. People are getting more comfortable with it.
How will consolidation of providers and insurers affect health IT?
You’re seeing a couple of trends there. Health systems, in particular, are trying to vertically expand their systems with LTACs and urgent care to provide more of the continuum of care for a patient across their life cycle. Providers, health insurance companies, and drug companies are starting to merge to try to gain competitive advantage in areas where they have the economies of scale to do that.
It’s really interesting to see discussions about corporations like Berkshire and Amazon. What are they going to do there? What’s in their mind as big companies and corporations try to define some part of that healthcare experience and manage more of the cost structure associated with their employee health? That’s going to be interesting. It’s really about just gaining economies of scale or getting cost advantage via strength in numbers or via some kind of shared services approach.
Do you have any final thoughts?
It’s a great time to be in the industry. A lot of things are changing. I think the most important thing is for companies to be flexible, dynamic, and be prepared to meet the needs of the hospitals and health systems as they evolve. We are well positioned to do that.
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