To Buy or to Build?: The Healthcare Technology Conundrum

As many Accountable Care Organizations prepare for the Pathways to Success launch in July 2019, and perhaps your organization is discussing whether to take on risk, you may be asking yourself what direction you want to go in when it comes to data analytics: Build your own in-house system or partner with a technology vendor. Let’s examine the pros and cons of both options, so you can decide which is right for you!

It’s important to ensure that the system you pick is scalable and cost effective regardless of which option you select. A series of key questions to consider are:

  1. Does the system allow for customization? If so, how quickly can customization be completed? If it’s within a desired time frame, how expensive is it to customize?
  2. Does the system incorporate multi-payer data? This is an important question to answer—even if you don’t currently have multi-payer contracts, you want to make sure the system can scale as your organization grows without adding significant costs.
  3. Does the system allow for multi-source data? It’s important to be able to integrate multiple sources of data as you begin to manage your population: EHR data, HIE data, claims data—just to name a few.
  4. How will you do your GPRO reporting? Do you have in-house expertise and bandwidth to complete this requirement on your own?
  5. Do you currently have staff to run analyses for you? If not, should you hire someone or does a vendor offer analytics services so that you don’t have to?

Your first instinct might be to build your own system. As value-based care appears here to stay, and has been getting bipartisan support, it seems logical that you could build a system to fit your organization’s needs. Another benefit is that you would own your system, so while there’s a large upfront cost, both in time and resources, you’ll have it permanently for what may seem like minimal support. Your in-house coding experts and data analytics team will be able to answer a robust number of analytics questions without having to reach out to a vendor. Unfortunately, it’s not that simple. Building your own system involves a significant upfront financial cost, and typically system-builds take years to complete. This means that you’re running your ACO on Excel spreadsheets in the short-term. You’re also building a system that’s equipped to handle ACO challenges of today, and at the rate at which the MSSP program evolves, who knows what the program will look like in five years?

Another aspect that is difficult to do when you build it yourself is staffing. When you build it yourself, not only are you investing in the tech but you’re investing in a team of coders and builders and analysts, that could be an additional 5-10 employees instead of 1 analyst or 1 savvy business operations employee. How about training? How about tech support? How about consulting? How about insights into other organizations and subject matter expertise?

Ensuring proper security is a whole business in itself and ensuring that your own system is built with utmost security, is a large feat. The system has to have the right encryption when data is sitting and in transit; all pieces should be tracked, and leaks should be pinpointed. Secondly, let’s consider data governance. What I mean by governance is that users can be locked into certain views. For example, if you are showing data to a board or a group, then showing PHI is not necessary, therefore, by having the ability to disable the view of granular level detail is really important. Additionally, if a provider is looking at their own data, then they also don’t need certain data viewing capabilities. Lastly, if you’re a managing organization and you need to see across all of your organizations, then you’ll need a higher-level view. All of these types of users need to be accommodated in the technology platform, which is challenging.

Building a proprietary system is a time consuming and expensive process, partnering with an organization who is fully dedicated to maintaining your data can be an attractive option. You can focus on what your organization does, caring for patients, and you can allow a technology company to focus on what they do best, provide you a system. You can be up and running with an out-of-the-box solution within a matter of weeks, and it will have been developed by experts that understand the key performance metrics an ACO would want to track.

If you choose to go the third party route, make sure to do your homework and ensure that the out-of-the-box solution meets all of your current and future needs. Many technology solutions are not customizable: As you acquire more value-based contracts, you will want to have the option of integrating that data for a one-stop-shopping experience. If you don’t have the ability to add HIE, EMR, and claims data into a single system that allows you to manage your population effectively, then you will be in the unfortunate position of needing to hire multiple vendors just to help you complete GPRO, Care Management, and Post-Acute Management.

Imagine that your boss asks you to look into a specific question that the current version of your software doesn’t allow you to easily answer. You’re not a coder, so you ask your vendor to provide you with this query, and they tell you it takes six months to write, and it costs several thousand dollars.

Whether you choose to build your own system or decide to invest in an out-of-the-box solution, it’s important to ensure that the system tracks Key Performance Indicators, while promoting continuous process improvement. In my experience, it’s important to build a scalable solution that integrates data from multiple data sources to ensure providers have full visibility into patient status, such as claims data, HIE data, and EHR data. Additionally, it’s necessary to build a system that can encompass data across multiple payers as your organization takes on more value-based arrangements. You’ll need to keep in mind the time and cost factors as you consider whether to build or buy. No matter which option you choose, we hope to see more ACOs succeed and achieve shared savings.

Maria Nikol

About the Author


Maria Nikol

Maria Nikol is a senior business consultant with 10 years of experience in healthcare operations and healthcare strategy. Her specialization includes process improvement and the application of emerging models of healthcare delivery such as Patient-Centered Medical Homes and Accountable Care Organizations. She holds a Master of Jurisprudence in Health Law from Widener University and a Bachelor of Science in Pharmaceutical Marketing and Management from the University of the Sciences in Philadelphia.

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