Software as a Service Has Come of Age

Here's why......In the current economic downturn the interest in alternative methods of financing solutions has increased. I hear repeatedly that capital budgets are evaporating and facilities are looking for new an innovative ways to finance innovation.

Software as a Service delivers the technology and innovation but does so in a different way putting less strain on capital finance requirements and delivering more value for money in a shorter period of time. In fact Gartner wrote a paper some time back (TCO Comparison of PCs With Server-Based Computing - subscription required) that demonstrated that the savings when considering the Total Cost of Ownership (TCO) can amount to as much as 48% relative to comparable fat client software installations. So how do these advantages accrue

Upfront Costs are Lower
The upfront costs to get technology installed and implemented is always going to be lower. There is typically limited technical requirements since the majority of the heavy lifting is done in the service providers environment in their technology center. Providing a good broadband connection with as the require resilience is typically the main cost

The savings mount up since payment for expensive licensed software can all but disappear. Depending on the application imaging the often forgotten add on costs of Microsoft Office and other additional licenses required when you purchase and run a fully fledged system and this can be multiplied many times over for each of the access points required. The model essentially lease the software on a “pay-as-you-go” basis. Not only is this pricing model more economical, it’s easier to predict and manage, and affords simplified financial reporting: Rather than trying to predict the funds required to pay out large chunks of capital for upgrades or replacements the ongoing costs is very predictable and tied to usage. Some call this conversion of CapEx to OpEx and will become increasingly important int eh current credit restricted market and cash strapped facilities. It also makes for inexpensive start up to provide access to a large number of users does not require huge capital injection.

Reduced ongoing costs
Often forgotten in the overall assessment of typical local software purchase and installation is the ongoing maintenance – not restricted to a single “maintenance” fee which is in the order of 10 – 20% of the initial investment but also needs to include the other software upgrades to the systems, equipment replacement and the inevitable complexity of troubleshooting.

Faster time to Deliver Solutions
In the standard purchase and own methodology setting up a new system involves many steps and is time consuming and costly. With professionally delivered services setting up a new system for a site is a rapid process. The SaaS capitalizes on the specialized staff who focus their energies on optimizing and scaling a system to ensure availability and delivery that is integrated into customer environments. With the solution ready scaling and delivering a new site can be extremely rapid getting sites up and running quickly benefiting from the solution and technology. Local staff focus on delivering service to their customers while the technology and the heavy lifting associated with getting it up and running is done by the SaaS vendor who has skills, staff and resources necessary to do so quickly and effectively
In addition given the push to roll out healthcare technology encompassed in the stimulus package showing benefit quickly will be essential to maintaining the momentum and flow of funds. Investing in large scale projects that have yearlong implementations and extended time frames before they can be installed and show any results will be less desirable and anything able to deliver quickly will be very attractive, especially when linked to low up front investment costs

Faster access to new technologies
In the rapidly changing world the risk of obsolescence is still high and being locked into a large up front investment that is obsolete before it even has time to be fully rolled out is an ever increasing risk. Not only does SaaS mean customers get faster access to new software and features but also provides customers rapid access to new and “trial” applications as they become available.

Enabling the Virtual Access
SaaS solutions are ideal for facilitating geographically distributed application needs and in cases of home access or remote accessing multiple sites this can be delivered quickly and cost effectively. Even in the case of local installations and sites access is often provided on thin client environments and this requires significant processor and server infrastructure for heavy weight solutions. In the SaaS model the processor power is shifted to distributed locations specialized in delivering power necessary for each application relying on broad band communications to link these environments.

Scalability
SaaS providers are engineered from the ground up to scale cost rapidly and effectively. Careful monitoring and management optimizes the resources to ensure availability of the solution and has built in capacity to meet unexpected spikes in needs without disproportionate investment requirements in technology infrastructure locally. SaaS also delivers built in geographic redundancy for an overall more reliable service performance than a traditional customer managed premises solution.

Better analytics and reporting
With the focus on delivering the service comes the inevitable requirement by SaaS vendors to monitor and optimize the application and the customer interactions with it. All this monitoring delivers a level of reporting capabilities that can provide detailed insights into customer habits and even performance that can be packaged into useful reports.

Better Management of Access
Hosted solutions also offer the ability to apply business rules across the whole center limiting access to specific times, locations and even intelligently routing work and information to those who are active based only on their availability. This is flexibility in delivering the solution and then linking the resources necessary to work with the application in the case of solutions that can be staffed outside of a facility

Improved customer satisfaction
All of the above elements combine to create a radically improved customer experience. By virtualizing the solution access is improved, new features are added quickly, problems prevented though intensive monitoring and maintenance and customers free up their resources to focus on their jobs rather than worrying about the applications

Guaranteed 24x7, 365, uptime
Fro many facilities it can be hard to relinquish control of precious IT assets to a third party. But rest assured today’s service based solutions have facilities fully-backed up and redundant and use state-of-the-art security to protect sensitive information. These service providers know that just one failure or breach could spell real problems for their business, so it’s in their own interest to protect your data.

For the same reasons today’s service providers have a vested interest in ensuring that their applications meet their customers’ needs: If the application performs poorly or turns out to be a bad fit for the customer’s business, the service provider loses a revenue opportunity. And because SaaS can be turned on and off just like a utility, it’s relatively easy for organizations to switch to another provider in a short amount of time. That gives the service providers all-the-more incentive to roll out tested, reliable applications that help companies meets their business goals. In fact SaaS providers are fighting for your business every day because if they don’t continue to deliver excellent service and improve their offering customers will stop using the solution and the SaaS provider will lose revenue and customers.

It took a while for SaaS to live up to its promise in no small part due to the challenges in the past with services and connectivity. But reliability of today’s platforms and the speed of today’s networks in particular have answered the remaining resistance points and it appears that SaaS is finally gaining serious traction.

So who's out there really (not standard software that has just been installed and hosted in a data center and called SaaS) offering SaaS in healthcare? How have your experiences been with SaaS? Let me know and post your thoughts

Healthstory - Providing Data to Healthcare Business Analytics

A recent posting by Laura Madsen on the b-eye-network site titled "The Impact of the Obama Healthcare Agenda on Business Intelligence" reviews the stimulus package and its potential effect on Healthcare Business intelligence and Analytics. As she points out the package has said they intend to invest in

“invest in proven strategies to reduce preventable medical errors.” First and foremost is wider adoption of electronic medical records (EMR)

There is little doubt that EMR's can contribute to improving medical errors but as Laura rightly points out this impact is limited as

the disadvantage is that much of the data is textual and therefore more difficult to analyze

And promoting the advantages of the data base centric solution that demands specific answers and fills in fields does produce "quantifiable data for analysis" but is very limiting to the physician, but more importantly is turning our most highly paid. knowledgeable expert, the clinician into a data entry clerk - as I have said before and was quoted here you don't find the CEO of Merrill Lynch entering stock data....!

So how do we satisfy this need while not limiting clinicians to the small boxes and multiple choice hunt and peck nightmare yet still satisfy the need for structured data to provide some of the value for applying business analytics to this burgeoning pile of data.

The answer is already here with the Healthstory Project that provides the perfect container to capture and hold the full story of the clinicians patient interaction. Satisfying the needs of the clinicians to capture the fine detail of the interaction but also fulfilling the data requirements for EMR's and Business Analytic systems. Healthstory has already created and published four technical guidelines for the

• Consultation Note
• History and Physical
• Operative Note
• Diagnostic Imaging Reports

and unlocks the valuable data from narrative documents enrich the flow of data into the electronic health record and creating interoperable clinical document repositories. The coalition is growing and you should expect to see these specifications becoming part of any requirements for clinical systems and documentation providers to be able to comply and both receive and send Clinical Document Architecture for Common Document Types (CDA4CDT) documents. Time to get on board.

Jonathan Bush from Athena Health on Government Reforms

Great interview on CNN Fast Money program with Jonathan Bush commenting on the investment and reforms and how this might impact his company.

He makes some salient points and in particular the focus on delivering data and focusing on data rather than paying to implement a bunch of "legacy systems" is the way to effect real change. Not using the money to "buy toys with it".

Athena Health helps clinicians get paid more money faster. They deal with the payment back end of health care. As opposed to building your own claim activity or use someone else who specializes like Visa does for retailers. So I guess Athena is the Visa of Health care. They offer Software Enabled Services rather than "shrink wrapped toys". In his word the key process starts with:

Step 1: Crap Removal

They claim to have one of the most sophisticated back ends in the business and they deal with 23,000lbs of paper for their customers each week! How they extract data from this is beyond me if this is coming in in paper form....

Follow this with a program not so much focused on the amount of investment but rather the execution that:

Pay for data and pay for results

Then stop using these legacy devices and start working towards capturing this as data as part of the process. Here he is singing my song and the need to capture the information in computer interpretable form (I have to believe that some portion of the 23,000 lbs of paper is being processed by an army of folks to digitize and extract data from it) and make this a requirement.

Once again Healthstory help satisfy this need allowing for the generation of the fine clinical narrative detail but complementing this with structured tagged data that can be used to process and show the health improvements and facilitate the flow of reimbursement for better results at higher rates.

Debt is Bad for Healthcare

Props to HISTalk in his latest column featuring the review by Greg Halls blog note on Healthcare Profit and Debt and how this has essentially mortgaged off assets that were owned but that asset was sold off to show a profit.....

The concept is best summarized by comparing this to the fire service:

Examine the notion of ‘capacity utilization.’ Without debt, excess capacity is not viewed as a problem. Consider the local fire department. Paid staff resides at stations 100% of the time, regardless of emergency conditions. 100% state of readiness. Imagine if the fire station had to pay a mortgage: it would then be forced to convert its unused (excess) capacity to a cost, and in turn focus on raising revenues to support its excess capacity. This is exactly the case with hospitals (and many other large U.S. businesses).

So for the fire department they would need to service that debt and might be encouraged to start a few fires, find a side line business of fire extinguishers and perhaps even spin off various pieces to show profit - perhaps privatizing the ladder (front and back to different organizations that specialize in being the best at ladder work at the front). If we do that we could even turn our fire fighters into independent contractors paying those that have Self Contained Breathing Apparatus (SCBA) training higher salaries.....who would then tend to group in higher density areas where they would have more work and higher pay as a result.....

You get the picture. So as Greg suggests any restructuring or stimulus package must attend to the debt load accrued as a result of the "pirated equity" squandered by a procession of "B-school grads, many of them who found their way into health care as their widget of choice". Wouldn't it be nice if we could try and reclaim some of that wealth that got paid out as big fat bonuses similar to the one paid to Peter Kraus of Merrill Lynch to buy his $37 Million dollar apartment.