Healthcare providers and hospitals across the U.S. have taken drastic steps to reduce costs — most notably by laying off employees.
Tenet Healthcare announced in January plans to lay off almost 1,000 employees over the next year. Seattle-based Swedish Health Services announced in September 2018 it was laying off 550 workers as part of a restructuring. In April 2017, Brigham and Women’s Hospital in Boston announced it was offering buyouts to 1,600 workers.
Labor isn’t the only expense, of course. For example, the American Hospital Association and Mannat Health recently discovered through a survey that healthcare providers are spending $39 billion a year on managing just the administrative tasks required to comply with federal regulations.
Healthcare institutions must comply with over 629 different regulatory mandates in nine domains, costing the average community hospital s between $7.6 and $9 million. Much of that spending is associated with meaningful use requirements — government standards for how patient records and data are stored and transmitted. The average hospital spent $760,000 on meaningful-use requirements and invested an average of $411,000 in hardware and software upgrades for their records systems in 2016 alone
Due to the demands of healthcare record-keeping and continued advancements in medical technology, IT spending is skyrocketing.
Along with that, medical research and development is booming — so much so that institutions can’t keep up with the amount of data that needs to be stored and analyzed. DNA sequencing, for instance, typically requires hundreds of gigabytes of storage for a single whole genome set — and sequencing is currently doubling every seven to nine months. Connectomics (the mapping of neural pathways) data sets are even larger, already occupying 100 terabytes of storage apiece, and are expected to soon need petabytes each (that’s 1000 terabytes). The latest microscopes can take high-resolution images at up to 400 frames per second.
At the same time, life sciences increasingly require more than just data storage. Universities and research hospitals are now emphasizing data analytics in their research and instruction.
New discoveries and advancements are tremendously welcome, of course, but they continue to deluge already-taxed IT departments that are constantly trying to balance storage and analysis demands with tight budgets.
So how can hospitals cut costs without trimming IT budgets or laying off workers?
As it turns out, the American healthcare industry is already wasting up to $1.2 trillion a year on completely unnecessary processes - $88 billion due to the ineffective use of existing technology alone.
With simple software fixes, many healthcare IT departments could easily free up half their bandwidth — essentially doubling IT budgets — by more efficiently using the infrastructure already in place.
The first place to examine is input/output (I/O) performance. A system can only complete tasks as quickly as it can process the data that runs in and out of the system. If I/O drags, performance across the entire system slows. This mostly impacts computers running on Microsoft SQL server (which is the most popular database in the world). The underlying Microsoft operating system is also notoriously inefficient with I/O.
In fact, I/O degradation is much more common than most organizations realize. More than a quarter of organizations surveyed last year reported that poor performance from I/O-heavy applications was slowing systems down.
So, the first place many healthcare administrators can look to manage unnecessary spending is their current IT performance: I/O fixes can easily double system performance and speeds, creating more breathing room while accommodating increasing data storage needs. Maximizing the capabilities of existing systems will also save significant money on hardware upgrades.
Jim D’Arezzo has a distinguished career in technology that started at IBM and has included senior executive positions at Compaq, Autodesk and as President and COO of Radiant Logic. He is currently CEO of Condusiv Technologies, the world leader in software-only storage performance solutions for virtual and physical server environments.
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