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Extensive IT Outsourcing

September 25, 2008
by root
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A recent KLAS report reveals that, as of late, more hospitals are deciding to keep matters in-house

KLAS SAYS: 12 percent of U.S. hospitals with at least 100 beds are now outsourcing a majority or all of their IT department. With improving customer satisfaction and a number of providers implementing increasingly complex technology with limited resources, extensive Information Technology Outsourcing (ITO) is a market that should be poised for growth. However, collectively, outsourcers have recently seen more clients discontinue extensive ITO than those that have signed new contracts.

In fact, the total number of outsourced hospitals actually decreased from 356 in 2007 to 303 presently, due to a few multi-hospital organizations that discontinued their agreements. A recent KLAS study attempts to give the reader a more complete view of what is happening in the extensive ITO space by measuring outsourcer performance, and providing insight into the experiences of the outsourced organizations.


ACS — ACS has the ability to provide a world-class data center, modern infrastructure, and organizational mentality that enable clients to complete projects otherwise out of their reach. Healthcare is one of its many verticals and one in which service delivery has not lived up to expectations. Costs are high yet performance is well below the market average. Solving staff shortages and reported staff turnover would go a long way to improving the ACS healthcare customer experience.

CareTech — This top performing IT outsourcer is gaining solid momentum in IT Outsourcing. Since the 2006 study, CareTech has added three new clients and recently signed up a fourth. CareTech has a nice mix of small, mid-size and large customers, performs well in computer and network operations, helps desk support and application support, and its leadership actively supports CIOs and client activities. CareTech is a market leading performer but middle of the road when it comes to cost per bed.

Eclipsys — Eclipsys continues to do a very good job with computer and network operations and help desk support. A number of clients report having a good relationship with Eclipsys and feel that they are committed to them and will do whatever it takes to bring in resources to meet their needs. This previous ITO market performance leader is, however, showing signs of decline. They have lost one client since the 2006 study and have no net new clients. They seem to get dinged the hardest when it comes to the lack of strategic help and leadership.

McKesson — This steadily improving IT outsourcer is one to keep an eye on. Their strong application knowledge and expertise, solid onsite leadership, and lower price per bed make them an attractive option if you are a McKesson shop.

Perot Systems — Perot is showing some improvement and still owns the largest piece of the market, especially when it comes to large complex organizations. They have the ability to handle very large organizations, and have world-class data centers and network monitoring expertise and tools. Application support, while improving, is not where clients would like it. They act more like a vendor than a vested partner.

Siemens — With performance scores consistently in the 70's and most of the market either moving up or down, Siemens trend line is essentially flat. They are one of the largest IT outsourcers based on number of unique organizations, and do a good job in regards to the quality and effectiveness of computer and network operations, and help desk support services. Despite scoring slightly below average, most that have an outsourced CIO are happy with their experience. They have a tendency to nickel and dime over items clients feel should be under the scope of the agreement.

Healthcare Informatics 2008 October;25(10):10