Historically, IT has been treated like a commodity — a necessary but relatively simple function of the business that runs in the background and keeps the lights on. A handful of managed service providers handled IT services for a wide array of businesses across multiple industries. But with little data optimization, healthcare systems were leaving insights on the table. Other industries, such as finance or supply chain, consider IT as a strategic asset, tapping into end-to-end managed services to help optimize data, leading to innovation, cost savings, and client satisfaction. Healthcare has the opportunity to utilize IT in the same way today, and, with developments like machine learning and AI, can revolutionize the patient-clinician experience tomorrow.
On today’s podcast, Nordic’s Head of Thought Leadership Dr. Jerome Pagani chats with President of Managed Services Paul Slaughter and Digital Health Practice Leader Kevin Erdal. They discuss the history of managed services, what it looks like in healthcare today, and how it’s evolving. They also discuss tools providers are using to turn data into insights, how a strategic centers approach differs from other historic approaches, and typical advantages and goals providers should look for.
Listen here:
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Show Notes:
[00:00] Intros
[01:38] What managed services is from a healthcare perspective
[02:15] Why a healthcare provider would want to bring in outside expertise
[02:54] The history of managed services and where it’s headed
[06:33] How healthcare can learn from other industries’ use of managed services
[08:10] Advantages of managed services
[10:37] How the EHR differentiates managed services in healthcare
[12:00] Platforms to consider to help make managed services a success
[13:22] How managed services has used data in the past
[14:47] Tools available to turn data into insights
[16:30] What the future looks like with what an enterprise can do with data, automation, and AI
[22:55] A centers approach to managed services
Transcript:
Dr. Jerome Pagani: Kevin, Paul, thanks for being here with us today.
Kevin Erdal: Happy to be here.
Paul Slaughter: Thanks for having me.
Dr. Jerome Pagani: Paul, help us understand a little bit about what management services looks like from a healthcare perspective.
Paul Slaughter: So managed services is a method by which IT departments and IT services can be provided to healthcare clients and any client for that matter via a industry center best practice manner that allows for consistency of delivery, achievement of specific KPIs, SLAs, to ensure that the technology supports the business appropriately.
Dr. Jerome Pagani: Why would somebody want to bring in outside expertise?
Paul Slaughter: I think a lot of organizations, their primary business is not technology delivery. And so most of the time, because the goal of the organization is not necessarily technological. For example, within healthcare, it's care delivery. And so technology enables the care delivery. And so I think organizations have found out that if they stayed true to their core business and focus on that and eliminate the distraction of other industries and businesses, that they can provide a better a better experience for their patients and for their clinicians and physicians and nurses as they deliver care.
Dr. Jerome Pagani: Right. And as you said, mission of healthcare organizations is really around that delivery of care. So what's the history of managed services in healthcare? How did it start to become sort of a regular part of the business?
Paul Slaughter: Yeah, so actually, managed services, you know, started in other industries, I think, and bled into healthcare. So a good example is the financial industry, because they are so return on investment focused and delivery focused, really started to get into managed services well before the rest of the markets. And then I think, you know, manufacturing and other commercial industries followed pretty quickly. Healthcare has been consistently, I would say, about a decade behind, if not a little bit more, these other industries, because the investment required to move to a managed services environment is a little bit more. And healthcare a leaner, from an operating income perspective.
Dr. Jerome Pagani: So historically, what services haven't been put out to managed services model in healthcare?
Paul Slaughter: Yeah. So at the beginning of managed services, you know, a few decades ago, I think the market or the vendors, I should say, not the market, the vendors really focused on that commoditized IT and minimizing that distraction towards organizations, things like service desk, desktop, server storage, network, data center operations, those types of functions. Organizations traditionally back then were very reluctant and reticent to give these larger SI vendors access to their clinical decision support, their EMR, their Epic, their Meditech, their Cerner, because that's the heart of the beast. And that wasn't necessarily a core competency of the larger SI vendors. And so we always struggled as an SI vendor to get to the clients’ EMR. And so traditionally it's really been focused on more of the infrastructure type work, the commoditized type work.
Dr. Jerome Pagani: So what does the managed services market look like today in healthcare, we’re sort of beyond the initial stages of digitization, we're talking about cloud journeys, integration with platform, the kinds of tools and technologies that better support the patient physician interaction. Where is managed services showing the most value today in healthcare?
Paul Slaughter: I think I think you need to think about where managed services has come from, that commoditized IT, large SI vendor single throat to choke. Then the market really evolved into more of a boutique world-class or best-in-class providers of specific tranches of managed services of the IT department. And so what happened was we went from a singular few vendors to a multitude of vendors that provided specific services to a very high degree of precision and client satisfaction. And that's happened over the past ten, 20 years. Where we see ourselves now, I think, is really vendor exhaustion with our clients, you know, the vendor ecosystem that CIOs and others have to manage is in the 20, 30 plus range of different groups. And so, they really become their own SIM in terms of having to manage governance and the overall services that are provided in a coordinated manner. And as I talked to CIOs nowadays, the message that I hear from them is I'm tired of managing a multitude of vendors. I don't want to go back to a single throat to choke, but I do want to create a much smaller three to five strategic partner vendor ecosystem.
Dr. Jerome Pagani: So, healthcare isn't the first industry to invest and implement managed services. What can we learn from models of other industry? You've already mentioned that that sort of commoditized IT isn't a great fit for healthcare. But are there other lessons we can kind of pull in?
Paul Slaughter: Yeah, I think we've been learning from other industries in the managed services realm for quite a while now. I'll give you a good example of that. You know, from financial industry perspective, you know, the trading floor and our sparing strategy actually in healthcare comes from finance and being able to swap out a laptop on the trading floor in a very rapid manner, having a closet on the floor, being able to do that to ensure that the traders kept doing what they were doing, which is providing the benefit to the financial organization. Those kinds of things actually came from lessons learned in the finance industry. I think the other lesson that I would say we've learned and continue to learn from other industries is data and analytics. Finance was the first industry as well to really invest heavy into analytics and understand how an ROI is generated to stand up proofs of concept, test those proofs of concept, spin it down if it didn't work, and invest additional capital into proofs of concept that did actually deliver the return and the benefits they were looking for. We've taken a lot of that initial data analytics in healthcare and really spun it across different platforms as well as different business units within healthcare to see how those analytics can benefit.
Dr. Jerome Pagani: Paul, you mentioned in the beginning that a managed services approach allows customers to really focus on mission critical stuff. But what are the other advantages of managed services? What are typical goals or KPIs? How do folks think about whether or not this is a success for their organization?
Paul Slaughter: I think organizations that have successfully implemented and used managed services to their benefit from a strategic perspective have really thought about managed services different. There's a lot of organizations that just use IT, think about IT as a commodity, not an asset. And so they use it for cost savings. That's an easy, typical engagement that we see. It's really, I think I see the market really kind of evolving into typical goals now being more than just KPIs and service levels to ensure that their constituents, their customers, the clinicians and nurses and physicians as well as even the patients, get a solid, dependable, consistent quality service. But I think more organizations now are starting to think about IT as an asset versus a commodity and are really starting to say, Hey, you know, we've spent the past ten years, it was easier to get capital than it was to get operating budgets. And so instead of tuning the systems that we had, we just implemented new systems. And so you end up with these environments where the ecosystem of your technology solutions is vast and shallow. And so I think a lot of organizations now, as they use it as a differentiator, managed services as a differentiator in their organization, are forcing the vendors to now evolve, mature, transform their organization, rationalize their applications, really start to, you know, work into, you know, a higher level of precision with leveraging and expanding the current environment that they have instead of adding new things to that environment. And so I think we're evolving well past just the typical KPIs and SLAs into a true transformative, you know, state where we look at maturity models, you know, day one and where do we want to be a year from now, two years from now, three years from now, as we leverage managed services to help us get there without necessarily spending a ton more money on individual contract changes and project work.
Dr. Jerome Pagani: And Kevin, what's so special about the EHR that differentiates it from the other systems that other industries have been working in and how’s that impact a managed services approach in healthcare?
Kevin Erdal: Yeah, well, Paul just started to hit on it, right, with the multitude of business units that we need to support. So if you think of an EHR, we're not just supporting clinicians or operational folks or business office folks or supply chain folks, it's all of the above. So when we think of managed services and how to support what appears to be a singular application within healthcare, it really can be equated to a lot of different applications in places like finance and retail and what have you. So when these tickets are coming in and there might be a perceived problem for something such as access, for example, and if we get a quote-unquote access issue from four or five different departments or a latency issue, we might actually equate that after some troubleshooting to maybe a potential issue with a network or a potential issue with a firewall or whatever it may be. So unless you can have that kind of 30,000-foot, 360-degree kind of view, it's really hard to do some of that quick troubleshooting because we are supporting so many different kinds of people and different kinds of end users. So it's critically important to Paul's point to understand who we’re supporting and then how we correlate that back to the actual technology, whether it be an application or some of the infrastructure we might be running on.
Dr. Jerome Pagani: So from an infrastructure perspective, Kevin, are there certain platforms to consider that help make a managed services approach successful?
Kevin Erdal: Yeah. So from an infrastructure standpoint, we want to be able to make sure that we can grow and evolve with the business. So one of the core ways we're seeing organizations do that right now and what we're doing even internally, is to leverage some of the public cloud platforms to make sure that we're never the bottleneck, right, we don't want to be a reason why we can't grow or evolve or add another application or bring on additional people to support an organization more broadly than maybe we had it in the initial contract. So we're starting to see a lot of these scalable platforms become very popular and very efficient. And we're also starting to see the need to integrate additional systems that maybe haven't always been integrated in the past. Like Paul mentioned earlier, we to have that large perspective or that high-level perspective of all the data to be able to support the collective business, not just individual business units. The way in which we do that is to make sure that we're capturing information that we're helping these organizations with, and also bringing some ideas to the table. It can't just be passive anymore to say, yes, we might be doing our job answering the phone and solving tickets, but we're going to start to see trends over time with some of that data. And by capturing and integrating, we can see the patterns and we can start to see the behaviors of these different business units and bring solutions to the table and not just respond to problems.
Dr. Jerome Pagani: Yeah. So, Paul, tell us a little bit about how managed services has consumed data in the past and what that's done.
Paul Slaughter: I think, you know, we've evolved well past the old decision support department in the hospital systems. You know, there's, there's, you know, those guys that originally were using, you know, access databases doing some pretty cool stuff with census data, etc., etc., you know, that, we've evolved well past that. Now we're really into you know, most organizations have an EDW, most organizations have a data lake and a few data models, but now we're really starting to get not just reactive to data that we need to run the business, but we're starting to get really proactive with data and preventative with data. And what do I mean by that, proactive, you know, how can we get ahead of certain trends that we see coming in, not just from a technology perspective, but from a business perspective regarding patient engagement, etc.? And then really, once we start to look at that data, we can it'll allow us to get more preventative, and how do we make sure that certain aspects of the business don't get negatively impacted by events and by normal course of business in the environment? So I think we're starting to really push into that proactive and preventative measures leveraging data aspect of how, you know, managed services delivers to healthcare.
Dr. Jerome Pagani: That's great. And Kevin, can you tell us a little bit about the tools that folks are using right now to turn some of those data into insights and maybe some use cases for where we've seen it have a huge impact in the way that managed services are delivered?
Kevin Erdal: Yeah, so this kind of goes back to the broader story we've been talking about a little bit, Jerome, on other recordings as well, which is really the BI modernization story. We talk about this a lot as it relates to, you know, the clinical and some of the revenue cycle components within healthcare, but it also certainly applies to managed services. You know, one use case could be around call centers and when patients are calling in and what kind of support they're needing, what level of support are they needing throughout the day. And it's not always an 8 to 5 kind of consideration. You know, personally, I was helping at one point, in a previous job several years ago at this point, with provider credentialing. So we had to know when the shift changes were happening even in the middle of the night, because we knew that phone might ring and somebody had to be able to pick up that phone and resolve access issues for a clinician that maybe hadn't logged into a legacy system for the last eight months or seven months or what have you. So you can start to use data and you can start to see the trends in the patterns based off of what information is coming in or what calls are coming in from patients, from other people providing services throughout the collective healthcare ecosystem. One of those things that really starts to bubble to the top after you start to look at those data points is really where that intelligence can be applied to some of the call centers and to some of the managed services departments as well. So you're not just kind of making estimates or guesses based off of resourcing on what you think might be correct, but you're using data to really drive how you staff and how you support those that are looking for that managed services support more broadly.
Dr. Jerome Pagani: So we've talked a little bit about past state and current state with the intersection between data and managed services. What does the future look like near term and three to five years out with what an enterprise can do with data and things like automation and AI? And how will that change the way managed services are delivered?
Kevin Erdal: Yeah, so I can certainly start here and we're starting to see some of this already with chatbots and we're seeing a lot of really good success specifically on the patient front in terms of interacting with their health system. So as you start to think through how you interact with your physician or within, you know, your hospital ecosystem that maybe you go to as a patient, oftentimes, at least for me, it starts with a chat. I want to ask a question of the local healthcare system, if you will, and say, hey, I'm feeling this way. I'm looking for this kind of service. Can you help me? Well, through chatbots in today's world, we can direct that question and that message to the right person within an organization to start to answer questions. Right. And in some cases it might need to be a clinician, a nurse might need to pick up the phone and say, Oh, wow, based off of what you're asking, you have some serious health concerns. We need to get you to the ED or whatever the scenario may be. But the point is we want to get people working on top of license. So if people are just calling or messaging in or calling in with some very basic questions around how I contact my physician or where do I go for my lab results, things like that, we can automate those processes and we're already starting to see that right now. Where I think we'll continue to see trends in this direction is starting to answer more precise questions via AI because we're going to start to see more value coming from the data that we're already collecting. And we're going to continue to see patterns in terms of which people are calling in or messaging in with a variety of different questions. And we're going to capture those answers associated to those questions for those patients. So as a patient, you know, I'm Kevin Erdal when I call in to a healthcare system or when I chat with a representative and we can start to use AI to say, okay, Kevin, is this persona with these demographics and has been to this health system for these reasons, we can start to foreshadow and start to predict what kind of care that Kevin Erdal might need as a patient. So I think we'll see a lot of trend in that direction. We want to be very cognizant of some of the potential bias that's associated with some of the AI in the market today. So we want to make sure that we're staying on top of what the prescribed answers might be as we continue to go forward. But we have to apply that to the patients and also the care providers that are seeking help from some of the shared services more broadly as well.
Paul Slaughter: Yeah, I think on top of that too, you can leverage that data abstraction, you know, automation and AI can help you do all kinds of things, everything from looking at specific business units and how they operate, how they can get more precise in their care delivery and quality. But it also will help do a lot of things like with exception-based medicine around virtual care and remote patient monitoring. It'll help us understand, you know, individual personalized care metrics that will allow us to get, like you said, a higher level of precision for the actual patient that we're looking at today, not just a cardiology patient in general. And I think something like that is very exciting as organizations really try to use that data abstraction for very specific use cases and purposes that I think can everywhere in the organization, not just clinical delivery of care, but also HR, finance. You can take that data abstraction and AI and really turn it to a multitude of use cases which I think is going to change how care is delivered and how healthcare operates in general.
Kevin Erdal: Yeah. And I would even say we can use some of the data just from, you know, the BI modernization standpoint to drive where we need to put more emphasis on AI. To your point, Paul, where do we need more help? Where do we see a large volume of support needed? And we can really start to hone in on what makes the most sense for an individual organization based off of the data that we already do have. So it's an exciting time to help, like I said, bring solutions to the table and make decisions based off of facts and data.
Dr. Jerome Pagani: Is part of the managed services model then to become an innovation partner with clients?
Paul Slaughter: I think the market demands it. I think right now, again, you know, the days of a commoditized, large SI vendor keeping the lights on and keeping the, you know, the end of the contract the same way they walked into the beginning of the contract. I think those days are over. I think the market is requiring their strategic partner to help mature them, evolve them, and transform them from a technology perspective. Again, it goes back to, you know, I feel like we've crossed the Rubicon from, you know, technology providers just keeping the lights on to really being that now strategic partner instead of transactional vendor. And that's something that I think the market is demanding from technologists these days.
Kevin Erdal: Yeah, absolutely. And that's our duty, right? I mean you see some of the success within the cybersecurity realm where, you know, a bank has successfully defended themselves from a bad actor. Well as a shared services provider, we need to be able to say one of our hundred clients had success while implementing this system this way. And if client number 50 wants to implement that same system and we can do that in a more innovative or automated fashion, we have to bring those solutions forward to help make things more efficient and more effective. That's our responsibility as an organization that's working with a multitude of different clients.
Paul Slaughter: And I think we can do that in a, not in a competitive manner, but in a collaborative manner.
Kevin Erdal: Absolutely.
Paul Slaughter: And across clients and across regions within the U.S. or any other global organization. I think that that shared services model, that that kind of center of performance is key in creating the right best practice across not just day-to-day delivery, but how we leverage automation, how we leverage AI. You know, those kinds of things will permeate delivery across the globe and raise all boats. I think in terms of our ability to deliver that high-precision quality care.
Kevin Erdal: No question.
Dr. Jerome Pagani: Say a little more about the center idea, because I think that's a departure from the way that folks have thought about delivering managed services in the past and maybe is one of the differentiators for making a successful managed services relationship work in healthcare.
Paul Slaughter: Yeah, I think we've had to really evolve our thinking in how we approach a shared services model within a managed services structure. And so where, again, I think a lot of organizations have leveraged the your mess for less deals with larger SI vendors where 95% of the jobs as well as the services moved to an offshore location. In chasing that high percentage of cost savings, I think more organizations now are thinking about it differently because again, they're looking for that maturation and that evolution of their technology as an asset versus cost savings as a commoditized IT or cost center. And so what we employed specifically for Nordic is a shared services model that looks at a 70/30 model. And we do that via centers of delivery. And so what do we mean when we say that delivery center concept? Well from a shared services perspective, we really talk about centers of scale, centers of performance, and centers of excellence, and the associated global work distribution in each of those centers. Centers of scale is exactly what you would think. It's more commoditized IT, it's service desk, it's desktop type things where, outside of the field services piece for desktop, those services can really be delivered from anywhere in the globe to a high level of satisfaction and precision without losing any value to the organization. Then you've got centers of performance where we look at enterprise systems like ServiceNow, like a workday, like an ERP type system where we can consolidate the delivery of that in a regional model or a truly globalized model. And we're not really hurting any one health system by doing HR onboarding the same way via Workday all the time. And so we want to put those professionals that support those enterprise applications together to really work on evolving best practice and maturing organizational delivery for those enterprise systems. And then the last piece is represented by the 30%, which is centers of excellence, and that's highly tethered to client, client specific, generally focused on the EMR, but customizable by clients, focused on that clinical decision support and how do we evolve and tune those systems to meet the needs of providers and patients in terms of, you know, how do I make this a more efficient process, less clicks for the physician, how do I incorporate these other solutions? How do we maximize the use of solutions in lieu of implementing new solutions within that center of excellence? And we really intend to leave those resources close to the client so that we can leverage best practice across the industry, but create bespoke solutions and tuned solutions for the clients that are leveraging our services.
Dr. Jerome Pagani: I like the idea of that co-creation of both efficiency for current state and that sort of innovative look into what physicians and their patients will need next. Kevin, Paul, thanks very much for joining me today. It was a pleasure having you.
Kevin Erdal: Always fun to be here.
Paul Slaughter: Absolutely. Thank you.