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Consulting Revenue

May 29, 2008
by Vince Ciotti and Bob Alcaro
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Many installations only become reality when CIOs call on a little help from their friends

Some will decry this fact, others will laud it, but HIT consulting has grown to nearly $5 billion last year, 23 percent of the HIT market. In truth, it is becoming hard to separate HIT vendors from “consulting” firms these days, as:

HIT Vendors — almost all major players now have a “Consulting” division and offer their clients such services as:

  • Strategic planning (totally objective, we're sure)

  • System audits (who else knows their products as well?)

  • Implementation (which now often exceeds software license fees!)

  • Outsourcing from giants such as McKesson, Siemens and Cerner

  • “Remote hosting” — running servers at their corporate headquarters.

HIT “Consulting” Firms — the quotes from the fact that consulting firms used to offer expert advice on system selections or planning, and then leave. Today, they tend to get their foot in the door and stay through:

Traditional services — such as strategic planning, system selections, contract negotiations, etc., which most consultants have offered since the 70s … Implementation, called in “installation” back then, was even free from shared systems like SMS and McAuto. Credit Walt Huff of HBO fame for teaching vendors to charge for it with his MedPro.

Implementation Services — as if vendors don't charge enough … In truth, EMRs and CPOE have become so complex and critical that most hospitals consider consulting help in the “clinical transformation” from a hard to locate and often illegible paper chart to a modern, ubiquitous electronic version.

Outsourcing — a major source of the staggering revenues being reported by giants like CSC and Perot, each with over $1 billion in annual HIT revenue. Recent surveys report only a few hundred hospitals outsource their IT shops, so dividing them provides an idea of how profitable that niche must be.