In a recent online survey conducted by managed services firm Nordic, 61% of healthcare IT leaders said outsourced managed services are now a central part of IT strategy rather than a supplemental one. Healthcare Innovation spoke with Tabitha Lieberman, senior vice president of global application & data analytics delivery for Madison, Wis.-based Nordic, about the health system pressures behind this market shift. 

Healthcare Innovation: What are some of the considerations a CIO usually takes into account when determining whether to engage a managed service provider vs. doing that work in house? 

Lieberman: A proactive one might be looking out over the next two to three years, thinking about how they are going to save money, what the staffing landscape looks like, and what their core focus is. Do I want to spend my time thinking about production support and core foundation or do I need to spend more time with the organization launching best practices, whether it is AI today, or clinical endeavors?


When they are thinking proactively, they're starting to say: how do I organize my teams to ensure that stuff that has to happen all the time — that’s just happening, and can lower the costs a little bit and create some guaranteed level of predictability in that foundation, so that I can have my best and brightest focusing on that next level of IT? 

The reactive, unfortunately, is the CFO saying save money tomorrow. The CIO is saying I need a solution; what do I do? 

HCI: Could it be about staffing challenges, too? Just difficulty staffing up?

Lieberman: It could be. Some have not been able to fill positions consistently and systemically. They hire a consultant, but can't do that for very long. We had one client recently who had 20 open positions for quite some time. Certain states — Washington and California, for instance, — have minimum wages for tech workers, so you start to see more challenges from a price point perspective. 

Sometimes health IT leaders have such a huge roadmap, and there's so much coming at them. They have to find a way to take part of this and move it. But obviously the more proactive you are, the better the experience as a whole for the staff, for the transition, for the communication, for the organization.

HCI: Do you see organizations that are switching from one EHR vendor to another start making this decision to work with a managed service provider as they're in that process of making the transition?

Lieberman: When we work with those starting implementations, we absolutely want to put that bug in their ear. But I would say very few are. Some of them do tend to look for legacy support, and those are more likely to have thought maybe managed services is a long-term thing for me.

No health system is in a steady state. They are always growing. There are mergers and acquisitions and new initiatives. There are government mandates. So that realization sets in that I've got project work to do. If I take that managed service layer out, I get better stability at a better price point, and now I can focus my people on that never-ending value-add work.

HCI: According to Nordic’s survey, 61% of the health IT leaders surveyed said that outsourced managed services are now a central part of IT strategy rather than supplemental. Do you think that number is much higher today than it would have been six or seven years ago?

Lieberman: I do. I think if you were to ask five or six years ago, you would have seen a much lower number. I would guess more in the 30% to 40% range at the most.

I think that there's been a lot of fear around managed services. Coming from being on the healthcare provider side, I was one of those with that fear. So I understand that fear. There were a lot of misunderstandings and some early entrants into the market that tried to treat it like any other widget. But healthcare application managed services really are a core success tool for a healthcare organization.

HCI: Nordic’s description of the survey results says that health systems are contending with rising Epic complexity as well as other issues. Is the Epic environment getting more complex for them to manage? Is it reaching into a lot of different things that maybe it didn't 10 years ago?

Lieberman: Yes. It is easier to run one application today than it was 10 years ago. The complexity is now is that we have everything from labs to radiology to endocrinology, and we’re even now starting to get into things like ERP. So you have to think about the interdependencies, the integration, the number of different places in a healthcare organization you touch, the shared decision-making. 

HCI: How does this intersect with security concerns that health systems have? Are services such as security patching part of what you offer? And is there a need to interact with the chief information security officer?

Lieberman: Most of the organizations we work with have their own CISOs, even if we provide patching and monitoring in some scenarios, which we do. It is important those policies and the strategy are local, and that we make sure that we're meeting all those criteria. I would say a lot of those delivery aspects of security are perfect fits for managed services because within an individual health system, you're never going to have enough people, especially for the 24/7 nature of it.

Patching in healthcare systems is getting more complicated. AI is finding more vulnerabilities, which is creating an even faster cycle. Epic's doing this on their end, too. Our security updates from them are coming out faster. We're seeing that in Microsoft. We're seeing that in all of our apps. So in order to keep up and not be adding more and more people, you have to find some services to help you — whether it's a full-blown managed service or just helping with one thing. 

HCI: When working with managed service groups, it seems like the the CIOs would want to make sure that they're staying in charge of strategy going forward, and they're not handing that off as well as handing off the service management?

Lieberman: We have different flavors of managed services. We have some flavors where we truly are that core foundation of production support, maintenance, keep the lights on. But we pride ourselves on doing more than just taking orders and putting fingers on keyboards. We want to bring value and insights and ways to improve. 

We have some organizations where we are really more involved in that end-to-end lifecycle in applications. In those cases, we're saying, OK, your PACS is coming near end of life. We want to bring to you what we're seeing in the market around PACS solutions today. We're going to evaluate some of them. We're going to put some roadmaps and budgets together. But you are going to drive this and we're going to be doing that based on the strategies you've outlined. We don't recommend anyone get rid of their strategy work. I think it's different levels of partnering.

HCI: The survey also highlighted an urban-rural split. with 70% of urban systems saying that managed services were central, and only about 43% in rural settings. What what does that signal?

Lieberman: I've worked with a lot of critical access hospitals over the years through my prior roles. I think there are two things. In the urban setting, you're just more exposed to managed services in general. If you're in Texas and Baylor Scott White already did this, and you're going to be at a CIO dinner, or you're going to go to a lot of the HIMSS things, you're going to talk to five people about what they did. You're just going to be more exposed to other people who have done it.

In the rural areas, remember that a lot of the hospitals are the No. 1 or No. 2 employer in that area. The more rural we get, the more important it is to think about the whole community, and they might be very nervous if we can't do a rebadge. We do offer rebadge. It's one of the things that makes us unique, but there'll be a lot of anxiety. They haven't seen it as much. If they saw it, they may have seen a big conglomerate come in in another type of business, and they're just anxious about losing their people.

If there are groupings of rural hospitals, that's one of the things we found where they would work together — like five critical access hospitals in Montana. You could provide a better level of service across them. There is  opportunity there, but it takes a lot of trust building.

HCI: Is there anything else from this survey that you'd want to stress? Anything else that jumped out at you or surprised you?

Lieberman: One thing is that there's a lot of contemplative time that goes into these decisions. It's similar to choosing your EHR. It takes a long time to make this decision, and I think people are just getting to that state where they're saying, "OK, this is important.”  But we have a long way to go before we see the true maturity across a number of our mid-tier health systems in particular.