Healthcare IT Organizations face Critical Challenges

Healthcare IT organizations face enormous challenges: Providers such as hospitals, HMOs, and PPOs must deal with spiraling costs, increasingly strict regulatory requirements, rising patient expectations, constrained reimbursements, and more. Payers such as healthcare insurers must deal with equally spiraling costs, constrained premiums, even more regulatory requirements, customer defection, and more.

Here are some possible solutions to four of the challenges faced by healthcare IT organizations:

1. Regulatory pressures

With the healthcare industry in America being one of the most heavily regulated in the world, insurers must comply with many layers of state and federal laws and controls. These include HIPAA (Health Insurance Portability and Accountability Act of 1996) privacy and security requirements, rigorous auditing and reporting mandates, and exceedingly complex and restrictive rules and payment mechanisms for Medicare, Medicaid, and other programs. Assuring compliance on so many fronts severely strains resources, while increased state and federal regulator scrutiny punctuates the urgency.

Similarly, healthcare providers are faced with a myriad of compliance requirements. These are related to patient information security, operational practices, and Electronic Health Records (EHR) management, and include HIPAA, HITECH (Health Information Technology for Economic and Clinical Health Act), SOX (Sarbanes-Oxley), JCAHO (Joint Commission on Accreditation of Healthcare Organizations), and other standards.

For insurers, increased regulation can force downward pressure on premium prices, making it increasingly difficult for a business to remain profitable. For healthcare providers, reduced funding and regulated government reimbursements combine to put the squeeze on margins.

2. The Patient Protection and Affordable Care Act

While many in the healthcare insurance business were concerned that the Patient Protection and Affordable Care Act (PPACA) would provide healthcare insurance to individuals at the expense of healthcare insurers, and that the insurers would suffer, the exact opposite turned out to be true.

What has happened, in part due to new business from new clients with government-subsidized premiums, insurers have in fact benefited tremendously from PPACA. That is the good news part for healthcare insurers; the bad news part is that they are now faced with a sharp increase in business and are searching for ways for their IT systems to cope with that growth.

Like any growing business, healthcare IT organizations must find ways to cope with growing business demands without incurring drastic capital costs for what could be completely unnecessary forklift replacement IT projects.

3. Increasing costs

Increased healthcare costs
It is common knowledge that healthcare costs are spiraling upwards at a yearly rate many percentage points higher than cost increases in any other sector of the economy. For insurers, it means constant increases in claims and related costs, and constant plan adjustments to stay ahead of the curve. For healthcare providers, it means having to charge more and more for services. Complying with increased regulation significantly increases costs for both insurers and providers.

Increased healthcare IT costs
Increased regulation makes a direct and measurable impact on IT costs as they require organizations to regularly update and modify many, if not all, their applications. Adding further to IT costs for those organizations running mainframe systems, hardware and licensing fees continue to rise, even for legacy systems. Organizations that have invested heavily in modernization and migration programs often find themselves with higher costs than before: for some, increased personnel costs were not carefully considered, and equipment and licensing costs were higher than expected. Others have learned that they must continue to support and pay for their mainframe systems longer than planned or, in some cases, indefinitely due to project delays and limits on the capabilities of the new systems.

4. The rock and the hard place

These considerable pressures on both ends of the healthcare landscape place payers and providers between the proverbial rock and hard place: How can they provide high-quality service and fulfill the growing regulatory requirements, while contending with rapidly growing demands on their systems, continuously rising costs, and limited resources?

Some of the most critical problems faced include, but are not limited to:

• Healthcare patient, insurance and payment data residing in different locations and on different platforms, challenges users who need this information and IT organizations tasked with delivering the information
• Constant concern with growing demands on systems and rising operational costs
• Web and mobile access being a critical need, while applications and data are on the mainframe
• Mainframe applications performing well enough, but presenting a challenge when market conditions change during mergers, etc.
• Some mainframe applications that do not perform well and that offer no obvious way to address this outside of yet another system upgrade, or a complete infrastructure forklift replacement
• Some packaged applications that also do not perform well
• Despite maintenance and tuning efforts, DB2 applications are high on mainframe system resource usage and corresponding operational costs

As healthcare IT organizations look at doing their part to reduce costs, they will also look long and hard at their IT systems for opportunities for both operational and capital cost savings, new technology investments, and costly system upgrades.

Furthermore, many IT vendors exist who will encourage healthcare organizations to modernize their systems by replacing their mainframe-based systems with distributed systems, playing the “mainframes are old and expensive” card. In actuality, solutions like this can be very costly, and may be unnecessary since many mainframe-based HIT systems already provide capable business intelligence, simplified billing, real-time claims adjudication, and efficient solutions for online transactions. As well, migrations like this often result in systems that turn out to be less capable and costlier in the long run due to dependency-creep, scope-creep, and significantly increased IT personnel costs.

To many, it appears that any “solution” is going to cost a lot. But that is not necessarily the case.

Mainframe systems can be optimized and operating costs can be dramatically reduced for a fraction of the cost of grand migration schemes. This applies both to those organizations running modern mainframe applications that are under constant development and maintenance, and those organizations running legacy mainframe applications.

Healthcare IT solutions for mainframe optimization

IT optimization solutions can impact a healthcare organization’s IT costs by improving mainframe system performance and cost-effectiveness, providing a tremendous competitive advantage for both healthcare insurers and healthcare providers. Healthcare IT organizations can:

• Get healthcare patient, insurance and payment data where it needs to be, in real time
• Increase system capacity to handle workload growth and to control operating costs with one single solution
• Get healthcare professionals, practitioners and patients access to data and services using new web and mobile applications—while leveraging legacy IT mainframe systems
• Transform existing mainframe applications into low-maintenance, market-agile, high-performance, merger-friendly applications
• Accelerate mainframe applications using high-performance mainframe in-memory technology
• Accelerate packaged legacy applications without touching the code
• Reduce DB2 application resource usage and operational costs by improving SQL quality

The Healthcare IT optimization solutions that can deliver these competitive advantages are:

• Automate mainframe soft capping – Fortunately, there are solutions that will help healthcare IT organizations to effectively handle current online and batch workloads by more efficiently employing current system workload capacity. Better than that, they can handle current workloads and newer workloads using the CPU that they are now consuming.These solutions can automate mainframe soft capping, making the process much more flexible and predictable—without actually capping any business-critical application processing. Healthcare IT organizations can avoid capping altogether by dynamically controlling LPAR defined capacity limits, leveraging available capacity from other LPARs, essentially providing capacity on demand.
• Performance-optimized replication – The best solution for healthcare IT organizations with this particular challenge is a replication solution that is well integrated and that has performance-optimized Changed Data Capture (CDC). It promotes workflow continuity by allowing for near real-time data replication that eliminates the problems found in many other data replication and ETL systems.
• New web and mobile applications leverage legacy services – You can leverage existing assets and IT organizations can build new applications on distributed systems (or on a mainframe zLinux OS LPAR) using developers writing applications in server side JS, Java, .NET, etc., and run tight but powerful APIs that will allow those applications to communicate with the existing assets.
• Transformative mainframe applications – IT organizations can have the best of both worlds: the power, throughput, security and reliability of the mainframe and the agility of modern distributed systems—but better, faster and more responsive than any other solution. Business applications, particularly business rules, do not need to be handled by mainframe IT personnel. The mainframe can be used to host an organization’s most important market-agile business applications.
• High-performance in-memory technology – High-performance mainframe in-memory technology is the perfect solution for healthcare IT organizations with this type of problem. Using current applications and the same mainframe hardware as before, IT organizations can dramatically improve application performance.
• Accelerate packaged mainframe applications – A relatively painless solution for this problem is a technique that uses high-performance in-memory technology and SQL interception. IT organizations can turn their DB2 proprietary legacy applications into in-memory applications without changing any application code at all.
• Automate DB2 SQL quality assurance – An ideal solution to DB2 SQL quality challenges would be an automated Quality Assurance approach. Automated DB2 SQL quality assurance will improve DB2 SQL quality and performance in both development and production environments. Organizations can analyze their current SQL to help identify areas where SQL inefficiencies exist, and to know precisely where to make improvements. When applied, improvements will sharply reduce the organization’s mainframe resource usage metrics: less resource usage for each access request from the applications accessing mainframe DB2 data.

By leveraging existing IT investments, healthcare organizations can achieve improved throughput capacity and overall system performance, a sharp decrease in cost per transaction and application maintenance costs, and greatly enhanced market responsiveness—for much less that the cost of competing solutions.

Want more information? Download the White Paper Optimization Solutions for Health Insurance IT Organizations here.