Technology Helps Slow Growth of Healthcare IT Costs

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Optimizing capability of existing resources can speed compliance efforts and reduce budgetary pressure. Jim D’Arezzo, CEO of Condusiv Technologies, explains the solution behind minimizing IT costs.

According to a recent study conducted by the American Hospital Association (AHA) and Manatt Health, healthcare providers in the United States are spending approximately $39 billion per year simply to manage the administrative aspects of compliance with federal regulations.1 “This constitutes a significant financial burden for health systems, hospitals, and post-acute care providers,” says James D’Arezzo, CEO, Condusiv Technologies. “To minimize the diversion of funds from essential areas like patient care, administrators in the healthcare industry, particularly IT administrators, need to ensure that new technology investments are both necessary and effective.”

A review of federal laws and regulation revealed that providers were required to comply with 629 discrete regulatory mandates in nine domains as of March 2017. The regulations primarily stemmed from four federal agencies: Centers for Medicare and Medicaid Services, the Office of the Inspector General, the Office for Civil Rights, and the Office of the National Coordinator for Health Information Technology. To ensure regulatory compliance, the average-sized community hospital (161 beds) spends almost $7.6 million each year on administrative tasks. That amount increases to $9 million for hospitals with post-acute care beds.2

D’Arezzo, whose company is the world leader in I/O reduction software for virtual and physical server environments, notes that while meaningful use regulations governing the efficiency of electronic health record technology have spurred provider investment in IT systems, exorbitant costs and ongoing interoperability issues remain. According to the AHA/Manatt study, the average-sized hospital spent nearly $760,000 to meet meaningful-use requirements over the preceding year. In addition, they invested $411,000 in related system upgrades over the year—nearly three times larger than IT investments made for any of the other eight domains in which healthcare providers are subject to federal regulation.

And, he observes, the cost of regulatory compliance itself may be merely the tip of the iceberg. According to a study conducted by CNN.com, as much as $1.2 trillion per year may be spent in the American healthcare system on wasteful and unnecessary processes. Of that, the CNN study estimates that as much as $88 billion may be wasted simply due to the ineffective use of available technology. This can include medical technologies as well as office and document management technologies that would minimize manual processes, prevent human error, and save time.3

In addition to these operational requirements, IT managers for healthcare providers, like their counterparts in most complex enterprises today, are grappling with the escalating computational demands of big data, which allows for the analysis of once unmanageable quantities and types of information, and the Internet of Things—which includes a large and growing number of new medical technologies. The 2018 Condusiv Technologies I/O Performance Survey revealed that organizations of all kinds are struggling to get the full lifecycle from their storage and server systems as the growth of data analysis, which is dependent of the speed of input/output (I/O) operations, continues to outpace expectations. More than a quarter of surveyed organizations—28%—reported user complaints related to sluggish performance from I/O-centric applications.4

Healthcare systems managers, notes D’Arezzo, have access to affordable ways to alleviate some of this pressure without making further capital expenditures. “We are the world leaders in this area,” he says, “and we have seen users of our software solutions more than double the I/O capability of storage and servers in their current configurations. Before diverting further funds from core activities like patient care, we recommend that healthcare systems managers look to increase the efficiencies of the resources they already possess.”

About Condusiv Technologies

Condusiv Technologies is the world leader in software-only storage performance solutions for virtual and physical server environments, enabling systems to process more data in less time for faster application performance. Condusiv guarantees to solve the toughest application performance challenges with faster-than-new performance via V-locity® for virtual servers or Diskeeper® for physical servers and PCs. With over 100 million licenses sold, Condusiv solutions are used by 90% of the Fortune 1000 and almost three-quarters of the Forbes Global 100 to increase business productivity and reduce data center costs while extending the life of existing hardware. Condusiv Chief Executive Officer Jim D’Arezzo has had a long and distinguished career in high technology.

Condusiv was founded in 1981 by Craig Jensen as Executive Software. Jensen authored Diskeeper, which became the best-selling defragmentation software of all time. Over 37 years, he has taken the thought leadership in file system management and caching and transformed it into enterprise software. For more information, visit http://www.condusiv.com.

1.    “Regulatory Overload: Assessing the Regulatory Burden on Health Systems, Hospitals and Post-acute Care Providers,” American Hospital Association, October 2017.

2.    Belliveau, Jacqueline, “Hospitals, Systems Spend $39B Annually on Regulatory Compliance,” RevCycle Intelligence, October 31, 2017.

3.    Pay, Britney, “The Top 8 Money Wasters in American Healthcare,” eFileCabinet, January 28, 2018.

4.    “Condusiv Releases Its 2017 I/O Performance Survey Results from over 1400 IT Professionals,” broadwayworld.com, August 16, 2017.

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Karla Jo Helms
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