Hosting Healthcare Applications Creates Benefits

Jan. 27, 2010

OREM, Utah – Jan. 27, 2010 – When it comes to application hosting, healthcare providers are finding greater success and satisfaction working with software vendors but are able to host a wider selection of applications by partnering with services firms, according to a new KLAS report.

For the new report, Application Hosting: Offloading Risk and Cost?, KLAS interviewed 176 healthcare providers about 11 software vendors and services firms who offer hosting services. The report notes that services firms offer the breadth to host a variety of applications but often deliver lower customer satisfaction than software vendors, while the software vendors deliver better performance but typically host only their own solutions.

“When it comes to satisfying hosting clients, software vendors are doing a better job,” said Mike Smith, KLAS general manager of financial and services research and author of the application hosting study. The KLAS report ranks six companies that host clinical information system (CIS) and hospital information system (HIS) applications — four software vendors and two services firms — and providers scored all four software vendors higher than the two services firms.

“But regardless of performance, software vendors can’t meet all providers’ needs because they don’t host other vendors’ applications,” Smith said.

The KLAS report notes that if a provider wants all major solutions — including CIS, HIS and enterprise resource planning (ERP) systems — hosted by the same company, ACS, CSC, Perot and PHNS are the primary options. However, in most cases, the hosting clients of services firms experienced greater downtime issues than clients of software vendors, and some firms were criticized for a lack of healthcare experience.

In contrast, the software vendors’ focus and experience in healthcare has given them an obvious advantage: Ninety percent or more of respondents using Cerner, McKesson and Siemens hosting services would recommend their vendor to other providers, while fewer than half of ACS and Velocity respondents would do the same.

“Until services firms can consistently meet client expectations, or until vendors can demonstrate their ability to host other vendors’ applications, providers will be left with limited options for hosting all of their core applications,” Smith said.

KLAS also found that CIS customers are not necessarily happier with a hosted solution, despite being relieved of the work associated with product upgrades and hardware maintenance. In fact, only Cerner clients felt increased satisfaction with the software itself once it was hosted, while the majority of CIS clients were less satisfied.

The top-rated vendor in Application Hosting: Offloading Risk and Cost? was Cerner, with a score of 84.7 out of 100. It was followed by NaviSite (82.8) and McKesson (80.8). Other vendors highlighted in this report are ACS, CSC, Eclipsys, GE, Perot Systems, PHNS, Siemens and Velocity.

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