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Healthcare IT Outsourcing Market Forecast: Healthy Demand, Mixed Results

The healthcare industry remains increasingly dependent on IT outsourcing –particularly for cybersecurity — but perceived outcomes from those outsourcing engagements are mixed at best, according to recent survey results from Black Book, a market research firm.

A record 82 percent of hospitals signed IT departmental outsourcing contracts since Q3 2016 or are in the process of a vendor selection, the survey found. On the cyber front, nearly 44 percent of hospitals and 35 percent of physician groups currently outsource all of their security applications needs.

Hospitals that avoid outsourcing typically do so to keep their data in-house and retain control over their applications

The survey spanned 807 hospital CIOs and IT departmental leaders along with 89 CFOs and financial executives across 244 hospital and inpatient organizations and 798 physician practices.

Strong Demand, Weak Outcomes?

The majority of respondents have no desire to cut back or eliminate their IT outsourcing, but 39 percent of them said their current outsourcing firm was performing below expectations. Only 10 percent of the respondents said their outsourcing company exceeds their expectations on a regular basis.

What could be contributing to such low satisfaction numbers? Perhaps the issue involves the healthcare industry’s complexities and compliance requirements. MSPs new to healthcare face steep learning curves across EHR (electronic health records), HIPA compliance and more.

Perceived Healthcare IT Outsourcing Leaders

Still, there are some clear perceived leaders in the market. According to the survey results:

  • Cerner, MEDITECH and Allscripts scored among the top three IT managed services for healthcare provider organizations by EHR firms.
  • Phoenix Health Systems, ICE Technologies, CGS, Infinite Outsourcing Solutions, IBM, NTT Data and CareTech Solutions scored among the top non-EHR centric IT outsourcing vendors.

Key Drivers for IT Outsourcing

The healthcare industry leans on IT outsourcing for several reasons. Chief among them: The perceived return on investment (ROI).

Indeed, 81 percent believe ROI is the primary motivating factor for outsourcing their IT needs. The ROI appears to happen extremely quickly as well. Fully 91% of hospital organizations reported in Q2 2017 that they were at or near a (6 months or less) return on their investment for IT outsourcing.

The bottom line: Healthcare organizations may not always love their outsourcing partners, but the perceived ROI remains very healthy.

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1 Comment

Comment

    Marc Haskelson:

    This article reinforces the misunderstanding that cyber security is all about technology.

    All breaches were caused by either lack of policy and procedures or failing to enforce the ones in place. This is why in health care, true HIPAA compliance would have provided greater satisfaction for the client and more lucrative reoccurring revenue for the provider.

    The demand and satisfaction ratios are much stronger in the SMB part of Healthcare where the smart MSP’s engage.

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