[00:00:02] Speaker A: Welcome to Health Data Talks where industry experts offer bite sized tips and trends for managing legacy data.
[00:00:12] Speaker B: Hey everyone. Welcome to Health Data Talks from Harmony Healthcare it, where healthcare leaders explore the real world decisions shaping how data is managed, accessed and leveraged across its life cycle. I'm your host, Eric Johnson and today I'm joined by Brian Liddell, CEO of Harmony Healthcare it's.
As healthcare organizations plan future budgets and modernization initiatives, every investment competes for the same limited resources. Cybersecurity, AI, analytics infrastructure, clinical systems. But one opportunity is often overlooked. The dollars, resources and efficiencies tied up in legacy systems that continue to be maintained solely for historical data access.
Today, Brian and I will discuss when healthcare organizations should be thinking about data archiving and legacy system retirement. How to identify opportunities to free up budget and resources, and why many organizations are beginning to view archiving as a modernization strategy rather than just simply a compliance exercise. Brian, thanks for joining us today. Welcome to the show.
[00:01:18] Speaker A: Thanks for having me, Eric. Appreciate it.
[00:01:21] Speaker B: Excellent. Well, this is always a timely conversation that we have and certainly it's no different right now. And as health systems continue to think about their budgets, continue to refine, and of course look for areas and opportunities to fund other types of initiatives, we always want to make sure that they have an understanding about how legacy data management and archiving can be made a part of that.
And so as part of that, our first question for today really is when should data archiving and legacy system retirement become a budget discussion?
[00:02:01] Speaker A: Yeah, that's a, that's a great question. And, and you know, it's something that we deal with daily with many health care organizations. There's, there's a lot of kind of points in time that I think are great to bring a partner like us into a discussion. I think the first is when you're looking at your app rationalization initiatives and you're looking at what is the security concerns with a certain application, what is the maintenance dollars that are going into us, what is the support or possible sunsetting for a legacy application with the current vendor? Those are all great points to bring us into it because there are hard costs going out, you know, to the organizations there. So app rationalization is certainly a great time to bring us in.
Mergers, acquisitions and consolidations. That's probably our biggest bread and butter.
We can give organizations a true kind of budgetary proposal for all of the systems that they may be acquiring through an acquisition. And I think that's really key because as we're putting owned by a private equity group, when we look at you know, mergers and acquisitions of our own. When we look at app rationalization of our own, we want to know and be certain of what the costs are and what we're getting into when we buy another organization or buy an application or something like that.
So I think it's really key to have those discussions earlier because let's say you do a merger or you do an acquisition of another health system or a hospital and they've got 20 applications out there, well, that could be millions of dollars in maintenance and hosting and everything like that that you may be acquiring as costs that I'm sure on the gl, but you know, may not be in the, the plans of how we sunset these, how we, we get off of these costs, et cetera. So I think anytime there's a merger or acquisition looking at the systems that are in place, the contracts around those systems are a great point to bring us in.
When you look at another one would be when you, when you look at renewals, right, everybody has that, that dreaded renewal, you know, time of year where you're getting the new contracts and, and the vendor may be Giving you a, a 2% increase or a 3% increase or nowadays it seems like a 10 or 15, 20% increase might be, might be putting, you know, put in place by the vendors. I think that's a great time because again, when you look at expanding costs, it's not just keeping status quo with your finances. There's inflation, there's. Again, if it's on your own hardware, there may be hardware upgrades, things like that.
And you really gotta look at the maintenance costs and those renewal costs that may be coming up. And probably the last one would be a migration or a go live for a new application. And that could be an erp, that could be a new ehr, that could be a new financial system system.
Data to us is data and you know, it could even be a new HR system which we just went live on.
But, but we understand those migratory patterns, we understand those costs that go into that. We understand even from our own side what a good partner looks like in making sure that those go lives go smoothly and hit their target dates.
And that's really again, a great place to bring us into the planning.
All in all, the earlier the better because then we can truly be a partner that can set forth a time period that can set forth a, a math sow per se in hey, if we can get to this date, we can get to this date on the go live. We can get to this date on sunset in your old application, you can get to this date on retiring that, that maintenance or hosting contract that you had with the previous vendor. And again, the roi, I hate to use that word because I, or that, those, those acronyms because I think it's overused in, in this world. But the true ROI on a project could be slimmed down to two months, if not a year in most of the applications that we decommission or are involved in a migration with.
[00:06:26] Speaker B: Thanks, Brian.
Let's kind of staying on that ROI track a bit and maybe exploring that a little bit further.
How can organizations determine whether they're sitting on an opportunity to free up budget and resources?
And if we go into, in particularly you mentioned roi, can you talk about that a little bit more in detail on what you've seen?
You know, in the time that we've been doing archiving, obviously Harmony has been in the business for over 20 years. We've done a lot of projects.
Can you talk about that into a little bit more detail and what customers might see and experience, particularly as it relates to savings on an annual basis?
[00:07:19] Speaker A: Yeah, sure.
It's a great question. It actually makes our relevancy and importance in the relationship a little bit more.
You know, when you look at 20 years ago, when we started doing business, there wasn't a lot of SaaS applications out there. SAS is a somewhat recent phenomenon that many healthcare organizations, many tech organizations have kind of switched to.
So really when we first started, it was more how do you get off of your, your old hardware, right, because you're having to do hardware refreshes.
Not so much how do we get off of our contract? Because most of the contracts were perpetual license with a small maintenance tail. And then you were hosting it on your, on your own hardware there, which again is very expensive to replace. But it's completely different than getting out of, out of a SaaS contract that you may have signed for five, seven, 10 years.
So you really need to look at what those, those hard costs are.
It's shifted in the last, I would say decade to, you know, not when's your hardware refresh, but when does your SaaS contract with your current vendor expire? When are you going to lose access to that data if you let it lapse? When do you have to have the extract done from that current vendor, whichever type of system it is, and by what date. So look at the licensing costs, look at the infrastructure cost. If you are still hosting it on your own, your own hardware, which again, that hardware is becoming more and more expensive as data center build Outs, you know, push costs of memory and storage and processing power up. Look at how much the storage costs are costing you as internal to your organization.
Look at the vendor support. You know, there's been, I won't name names, but there's been many EHR vendors lately that have laid off, you know, support workers or sales workers, you know, in the, to the tunes of tens of thousand.
And most people, from what I've seen in surveys through CLAAS and other organizations, have seen a serious decrement in the quality of support that you're getting from the vendors and the timeliness of their responses when there are issues there.
Internal IT resources again, as healthcare organizations like the ones we're working with are more stretched for cash. How much of those internal IT folks costing the company and are they being utilized, are those funds being utilized in the best possible fossil capacity in that, in that way?
And then the opportunity cost would be the last one of, of maintaining that aging system. Right? You've got legal worries, you've got security worries, you've got support concerns, you've got again, if it's hosted internally, you've got hardware concerns. So there's just a lot of costs surrounding all those legacy applications and it really makes the ROI pretty simple, usually with hard costs but, but then the soft costs as well, those can be enumerated pretty easily when you, when you look at the time being spent on, on all these systems.
[00:10:32] Speaker B: Thanks Brian.
I'm interested in your perspective and the types of conversations that you have with other leaders particularly and, and let's face it, health Systems these days, CIOs, CEOs, CFOs are all challenged with making tough decisions, right? And, and the decisions that they're making of course have to be ones which they're rationalizing the choices that they make and the decisions of course are founded in help me understand what this is going to do for me. And I need a solid roi, so I have an understanding of exactly what it's going to save my organization or enable something else. So in particular I'm interested in your perspective too Brian, and of course the conversations that you have about when it comes down to making those choices. How can archiving be considered part of a funding strategy? Because at the end of the day it might not also be about what it is that they may save and hard savings, but the ability to free up other technology choices that of course might be part of an overall strategy. So therefore really looking at archiving and modernization as part of a broader strategy. Interested in your perspectives on how they might be able to support other decisions that they might make related to other projects.
[00:12:02] Speaker A: Sure, yeah, no, that's a great question. And again, I used to sit in the CFO role here at Ed Harmony, so very in tune to budgeting decisions and cash flows and things like that. That give you a few stats from, from our customer base. First off, nearly a third of our customers report over a million dollars in, in annual savings and that's on hosting maintenance infrastructure costs that we saved them once they, they have started archiving with us and, and retiring those legacy applications. So again, it's all relative a million dollars to a, to a top 20, you know, health system. Probably not a lot, but most of those in the top 20 are in the tens of of millions of dollars. You know, a million dollars to any organization is, is a significant amount of money.
Most of our customers report two to three times ROI over the lifespan of, of the relationship with us. So again that's, that's significant dollars, you know, no matter what size organization you are.
And then four out of five of our customers report strong or exceptional roi. So that's going back to the financial, you know, the financial backing of the health system and how they see the success of the relationship with Harmony in this case.
But all three of those things are great metrics to really show a great use case for the retirement of legacy or non current applications. You know the, to your second part of your, your question there.
What are, what are organizations doing with these extra funds? Right? It's not. Most of the, the companies that we work with are, are non profit. There are some for profits but, but most of them are non profits. And, and they're not just looking at how do we, how do we get rid of these costs? You know, they're looking at how do we get rid of these costs so that we can invest in other aspects of our business. Some of the biggest things that, that folks are are investing in, they're, they're funding their AI Initia.
Getting any cheaper as, as days go on, we'd all like it to be, but they're funding those, those large language models and, and those, those AI issues that they have analytics and, and reporting programs that they might have going on. Data is very important. And making the data, which is one of the things that we do by archiving and making this data available and putting it online, they can do better reporting. They can make more informed decisions because they have access to the historical data and decisions that were made in the past. They can improve interoperability with the funds and then they can accelerate their modernization efforts. So that could be, you know, physical infrastructure inside the health system, that could be softwares that are put into there. They can modernize their, their HR systems or, or give bonuses or make it more appealing for, for you know, folks to, to come work for their health system. You know, it's still a, it's a talent world right there, right? This is not all systems. This is not all, you know, technology. You still have to have the best and brightest and having extra funds to possibly put into those budgets. The human capital is absolutely where people are putting these savings that they, that they achieve with, with going with us and retiring their, their legacy systems.
[00:15:29] Speaker B: Yeah, thanks, Brian.
You know, one of the things too that, that comes down with something like, you know, thinking about how we get started and these typically are complex projects, right?
And you know, as part of going down the path of understanding exactly how we would approach this, making a choice on exactly what those steps might be, the next question then becomes is okay, that sounds all great, but how do I get started?
Right? And you know, ultimately it comes down to really thinking about some of those practical steps that organizations should consider and take as they begin planning future budgets and modernization initiatives.
So when you have conversations with other leaders and they say, Brian, what you're saying sounds great, right? We believe this, this is a part of our strategy. Okay. So therefore we're expecting this is going to be a pretty significant implementation. How do we get started?
And so in the conversations that you've had with other leaders, you know, what are some of the things that come to mind in terms of what we might say to them? In terms of. All right, yes, it really needs to start here.
And you mentioned a few of those things early on, but maybe just to simply reset. All right, you know, where should a leader focus?
And just simply saying, all right, yeah, this is the scope of this particular project or initiative.
[00:17:08] Speaker A: Sure, yeah.
Again, 20 plus years experience in this and most from the financial side of the business.
The first thing I would start with is take your, what is your, what is your legacy application inventory. So what are those non current systems that are basically being maintained for historical access? Right, that's going to be your, you'll say your low hanging fruit and usually those are a little bit older. You may or may not be paying maintenance on them.
But if they're not hosted by the, by the vendor, they're probably hosted internally on not so recent hardware, we'll say where you could really be at risk. And if they're hosted with the vendor. Again you're not going to get, if you're not a current customer and you're in read only mode or something like that, you're probably not going to have the best customer experience from that. So the second thing would be understand the actual costs. A lot of people just, they poo, poo this like it's not a big deal. But you know, one of the things that we do when we go into organizations is we say let's be a partner here and let's take a look at, we don't necessarily need to know the dollars that are going out the door at the, at the health system because a lot of that is, you know, it's proprietary and private and, and whatnot. But what systems are you still paying maintenance on and when do those contracts renew? Because that makes it a much more simple conversation on where you should as an organization prioritize things.
You know, in that also what may be getting sunset or not be under support anymore from the legacy vendor. So if it's a legacy system, most likely they've done upgrades, they may have replaced it in their portfolio line. You know, what, what is still being supported, you know, Microsoft and Oracle and all these large tech companies, they, they sunset platforms and they sunset support on some platforms. So making sure that the security standards are still up to date and you're still getting updates.
If you're not, obviously that should be a priority system to get off of the current hardware or current SAS contract, understand the usage problems or patterns, excuse me, not problems, the patterns between these systems. So is the system being accessed once a year for a random legal request or insurance request? Or are we in this 20 times a day, still looking up patient records, still doing record releases, still, you know, seeing what the, the, the diagnoses and the, and the treatment plans were. So what are the usage platforms on this? Engage all the departments. You know, it is obviously big with, with all these systems, but him, especially when you're talking about record release and, and Phi, that's also a big one, Finance, not enough people look at finances as somebody that should be brought into these conversations. Finance can shed a lot of light on possibly what systems should be prioritized. If you have a batch of 100 systems, if you're a large healthcare organization, how should you prioritize those? Well, the amount that you're currently paying for these systems should not be again, not looked at. It should be part of that, that decision making process. And then obviously the clinical stakeholders, you know, need to be involved early. What are they still accessing. Why do they find this information, you know, relevant? How many customers or excuse me, patients in, in this case are still coming in, you know, from that old system and they're still having to go back and reference that old system or two, you know, that are sitting around. So involve all those stakeholders in the process as early as possible. And then obviously the biggest thing is have a plan, build a long term roadmap, find a long term partner that can have a repeatable process, that can have a scalable process that isn't going to ding you for this system that, hey, we haven't seen this before so this is going to be really expensive for you. I can tell you from our experience, We've done over 750 unique systems and there's very few times that a health system is bringing us new net, new systems that we haven't seen or looked at before. So we can give a very prescribed, almost set in stone quote or sow for all the work that we do with very few change orders because we know these systems so well, we know the level of effort it's going to take us to get them completed and we know the level of effort frankly from our customers side that, that they're going to need to put into this. Whether it's the IT resources that they need to get involved or the, or the finance races or the, the validation resources, whatever those might be, we know kind of best practice around these. So again, find a partner like Harmony that, that can give you that long term roadmap where, you know, maybe you don't have the budget in the first year, but you can do some in the first year and you can do some in the second year and some in the third year and then, you know, it could take five, seven years to get them all decommissioned, but at least build that plan out and we can give, you know, budgetary, you know, quotes to help with that planning process as well.
[00:22:39] Speaker B: Brian, thank you very much for joining us today. Really appreciate the conversation. That's it for today's episode of Health Data Talks. Brian, thanks again for sharing your perspective and thanks to everybody for listening. If you enjoyed today's conversation, be sure to tune in for future episodes as we explore how healthcare organizations can reduce complexity, modernize with confidence and unlock greater value from their data. Until next time, thanks for listening.
[00:23:04] Speaker A: That's it for this session of Health Data Talks. Check out helpful
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