Healthcare Providers and IT Vendors Far Apart on Creative Solutions for a Tough Economy

June 03, 2009 -- Despite renewed discussion around healthcare IT (HIT) investments because of the federal stimulus package, most HIT budgets are still tight - and providers are looking to IT vendors for creative solutions to keep projects moving. According to a new report from KLAS, however, those creative solutions are virtually non-existent.

The new KLAS report, Executive Reaction to the Stimulus Package, reflects feedback from dozens of CIOs and other healthcare executives on a range of economic issues. Among a number of findings, the report explores the gap between what providers need and what vendors are offering to deal with a troubled economy.

"Simply put, the solutions providers are requesting the most are the options vendors are pursuing the least," said Jeremy Bikman, executive vice president of research and strategy for KLAS. "Certainly, reduced maintenance fees and other cost-cutting measures would be welcomed by providers, but not every creative solution has a dollar sign attached to it.

"More than a quarter of the providers we interviewed are looking to vendors to help them achieve a stronger ROI - and that means more training and better support," he said. "Providers are essentially saying, 'help us use your system more effectively,' and very few vendors have answered the call."

Beyond the vendor-provider relationship, Executive Reaction to the Stimulus Package also addresses the shift in IT project timelines since the ratification of the American Recovery and Reinvestment Act (ARRA) and its provisions for healthcare IT. While the dramatic 2008 economic downturn redirected most hospitals into survival mode, the future reimbursement changes outlined in the ARRA have caused a violent shock in the market. According to the report, twenty-eight percent of providers have speeded up or changed the direction of their IT plans since the announcement of the stimulus package, with 43 percent ready to move but watching cautiously.

Those providers who are accelerating their plans not only have an eye toward reimbursement dollars but are also eager to have first pick of the best resources. As one IDN's executive team summarized, "The ARRA will create a feeding frenzy for EMRs and will overburden vendors and consulting firms."

Though no healthcare technology vendors received overwhelming praise for their efforts to help provider customers deal with the challenging economy, a few companies were noted for their efforts. Microsoft, Epic and GE received the highest ratings from providers for trying to support their customers with creative solutions, while Agfa, Kronos and Meditech received the lowest scores. Other vendors referenced in the study include Cerner, CPSI, Eclipsys, Lawson, McKesson, QuadraMed and Siemens.

"Almost every organization, provider or vendor, is struggling right now in some way. What vendors must understand, however, is that the short-term sacrifices they make today will create relationships that can bear fruit for years to come," Bikman said.

To learn more about healthcare executive reaction to the current economy, the report Executive Reaction to the Stimulus Package is available to healthcare providers online for a significant discount off the standard retail price. To purchase the full report, healthcare providers and vendors can visit www.KLASresearch.com.