Spending Your IT Budget More Wisely

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Healthcare IT budget, healthcare finance, revenue cycle management

Stretching information technology (IT) budgets are an ongoing challenge for many medical offices today. In theory, your practice should first determine what IT you need to meet your business objectives, and then budget accordingly. However, because technology is constantly changing, many practices would like to stay ahead of the trends to improve their business operations. But there’s a way to stay current and relevant while stretching those precious IT dollars.

Understand your expenditures

Before you begin to slash away at your IT budget, Bob Merrill, IT strategy expert at PA Consulting Group, says to make sure that your practice understands what you are actually spending on IT. You can do that by simply listing each line item/category, and including IT-like expenditures, which may include items such as phone systems, mobile phones and associated services, voice and data networks, copiers, fax machines, printer/copier/fax supplies, maintenance agreements, as well as allocation of floor-space and associated rent for computer rooms. 

“Many of these expenditure categories are considered office expense, even though they duplicate capabilities available through IT technology,” he points out. “Sort the categories from highest annual expenditures to least, and focus on the costliest expenditures first when looking for opportunities for reduction.”

Donovan Niesen, co-founder of The Tech Outfit in Minneapolis, MN, says to begin with your biggest IT expenditures and work your way down.

“When evaluating ways to reduce your IT spending, it is absolutely critical to do a proper risk assessment to understand any pitfalls that can arise from changes made,” he cautions.

For example, if moving a service to a hosted or cloud environment, what impact would an Internet provider outage have on the business? Also, he says to ask yourself if any of the changes being made impact compliance with regulations such as HIPAA or others.

Review your Internet Service and Phone Contracts

If you haven’t yet renewed your Internet service or phone service, you often have significant room to renegotiate and cut excess services.

“Telecom brokers will also do the price comparison for you and are great at negotiating contracts,” says Niesen. “Review any maintenance contracts or recurring service contracts. Many vendors can be convinced to bring down the price of renewal to keep you as it’s far cheaper for them than to go after new business.”

Niesen also recommends evaluating any decommissioned hardware or services for potential reuse or resale. For instance, if the hardware is over the 4-year mark, it’s not recommended for production use but still great for development and testing.

“Used hardware—even four years or greater—often still has significant resale value,” he adds.

Consider consolidating your IT equipment

Instead of having five pieces of hardware all running individual functionality, look into equipment that can consolidate services without sacrificing quality.

“There are many companies out there offering a suite of services in one software package,” says Chris Beyne, product manager for DS Secure in Chicago, IL. “This type of software can greatly reduce the bottom line while still providing the same level of security and functionality.”

Your practice should also consider consolidating and virtualizing multiple servers into a single physical server for applications you do not wish to place in the cloud.  This will often result in hardware, software, electrical power and support savings.

“Consolidate local workstation-based printers, fax machines, copiers, scanners and printers, to fewer but larger multi-function printers, reducing the total number of devices, streamlining and reducing maintenance and supply costs and potentially increasing security of confidential information,” says Merrill.

Switch to VoIP

According to Beyne, switching from a traditional phone system to a VoIP system may seem like an expensive proposition, but due to a greatly reduced monthly bill, users typically see a full ROI within six months (See MOT’s article, “Your Phone System & the Image It Projects,” http://medicalofficetoday.com/article/your-phone-system-image-it-projects).

“After the initial six months, phone bills are usually reduced by 50 percent,” he says.

Merrill adds that a move to VoIP-based phone systems provides tremendous flexibility and the opportunity to share leverage data network connections between multiple offices and potentially reduce voice trunks. 

“It also allows for load balancing of patient call answering among locations for multi-site practices,” he says. “Consider eliminating voice trunks altogether by moving to cloud-based voice services.”

Move to the cloud

Speaking of the cloud, Merrill suggests that your practice consider migrating away from technologies physically based in the medical office to cloud-based technologies (See MOT’s article, “Taking Baby Steps to the Cloud,” http://medicalofficetoday.com/article/taking-baby-steps-cloud).  Rather than buying and supporting your own software, servers, storage, phone systems, and e-mail systems, evaluate the savings and other benefits that can result from using utility-based IT applications and infrastructure sourced through various cloud providers. 

“While security can be a concern for cloud-based technology, virtual private clouds and private clouds are available through the likes of Amazon, Rackspace, Google, and IBM,” he says.

In addition, evaluate moving to cloud-based virtual desktops rather than providing fully-powered PCs and associated software for each desk and exam room in the office.  Rationalize computing devices by eliminating duplication of PCs with tablets. 

“Cloud-based applications can be accessed by medical staff through wireless tablets with optional keyboards, providing greater flexibility, often at lower cost than fixed PC workstations,” notes Merrill. “Consider whether office WiFi can eliminate the need for physical LANs, cabling and switches.”

Avoid the fancy gadgets

Before you place that order for iPhone 5s for all your staff members, take a step back to see if your practice can live without the latest technology.

“You can live without IT that is used infrequently, or that is used only because ‘that’s the way we have always done it,’” says Merrill.  “You can also live without the gadgets that do not provide a clear business benefit or replace older, more costly technology.  Often new technology is implemented and the old is never decommissioned, resulting in a patchwork IT architecture that is cumbersome and expensive to maintain and support.”

Beyne agrees, and adds, that each individual practice will have to determine its end users specific needs. “For a medical office, services like content filters are not a necessity and can be eliminated without having much of an effect on productivity, while reducing overhead.”

And while new tablet devices like iPads and Android tablets have become extremely popular, Niesen says that many 3rd-party software vendors try to shoehorn products into them that don’t necessarily make sense for the device.

“Unless a software or service has a great, tangible benefit from using a tablet device, stick with regular PCs as the real-world usefulness of these devices is still very much in its infancy,” he says.