Developing The Right Remedy For Healthcare

DX Systems Corp. has learned that in today's healthcare industry, the standard, "off-the-shelf" solution doesn't exist anymore. Characterized by an increasing number of mergers and consolidations, the healthcare industry is evolving - rapidly and dramatically. IDX Systems Corp., which has 2,000 employees and gross annual sales of $250 million, develops clinical and financial software and systems for healthcare. The VAR also integrates biometric verification technology with its hardware and software.

At the same time, however, the evolution of the healthcare industry is occurring at different rates across the United States. For example, the number of health maintenance organizations (HMOs; also known as "managed care") has grown dramatically along the West Coast. In the Midwestern United States, however, fee-for-service care (i.e., independent doctors' offices) has remained more prominent.

That type of diversity within healthcare means VARs and integrators have to be able to customize systems based on healthcare customers' unique needs. "An HMO in New England can operate very differently than one in California," says Susan Bresee, a market strategy consultant for IDX Systems (Burlington, VT). "That's why VARs really have to identify what their customers want to accomplish through technology."

In the following pages, Bresee shares IDX's approach to identifying customers' technology requirements.

Key Areas Of Evaluation
To understand a healthcare customer's technology requirements, IDX interviews the prospect's key employees. In addition, IDX observes those employees "in action" at the prospect's site. During the interviews and on-site evaluations, IDX analyzes six areas:

1. Why does the prospect want to replace, supplement or upgrade its existing hardware and software? (Prior to working with IDX, many customers have already internally evaluated their system requirements, often with the help of a consultant).
2. What are the prospect's goals and objectives from such an upgrade?
3. What are the prospect's business problems?
4. What types of efficiencies could the prospect gain through an integrated information management system? Specifically, IDX evaluates how the prospect's employees could more efficiently share and access medical and insurance information.
5. What future changes does the prospect anticipate in its business? For example, the prospect may be getting a new managed care contract. Or, it may be automating an area of its business, such as clinical systems, for the first time.
6. What type of training will the prospect require?

IDX offers more than 40 different clinical and financial software packages for healthcare. After IDX has analyzed those six areas, it then decides which specific products to recommend to the prospect. Bresee says a prospect may only need a specific subset of those 40 packages. The type of software prospects need varies depending upon their business goals.

For example, health maintenance organizations and independent doctors' offices wrestle with different types of problems. According to Bresee, HMOs are primarily concerned with making sure that the medical care their members receive is administered efficiently and cost effectively. As a result, most HMOs need to generate detailed reports comparing members' premiums to the costs of providing medical care to those members. "Consequently, a VAR's software has to meet the reporting requirements of the HMO," Bresee says. "Generating reports is critical to an HMO."

In addition to costs, healthcare organizations are interested in evaluating quality of care. Healthcare organizations also need software/systems that help them track how patients with similar illnesses had been treated. By analyzing the method of treatment for 500 people with the same type of cancer, for example, the HMO can better identify efficient, and effective, types of treatment. "By comparing different approaches to treatment, it's easier to identify one that delivers superior results at the lowest cost," she says. Doctor's offices and hospitals may have different requirements from technology, Bresee says. For example, some doctors and hospitals are contracted by HMOs to provide care to the HMO's members. As a result, doctors and hospitals need technology that enables them to quickly and easily track eligibility and benefits from HMOs and other insurers. Providers need to correctly and immediately identify the patient, the patient's insurance, current medical problem, and previous medical history.

The Cost Of Selling To Healthcare
IDX doesn't charge customers for the time it spends on pre-sale business evaluations. As a result, when the company loses sales to competitors, it has nothing to show for that time. According to Jim Bresee, manager, technical consulting for IDX, the company considers such pre-sale work as the "cost of doing business" in healthcare. "We know full well that our time could be for naught," he says. "Healthcare is not a market where VARs can understand customers' requirements by talking to them over the phone." Once a healthcare prospect has decided to buy from IDX, the VAR then reviews several additional areas with the customer:

• IDX's final software recommendations.
• Integration services the customer will require.
• The implementation team the customer needs to assemble.
• The client's reporting requirements, including clinical and financial data it wants from IDX's system. In addition, IDX and the customer decide whether the customer wants to develop reports on IDX's system that mirror reports from the customer's system.

VAR Action Points
According to Jim Bresee, IDX Systems has learned several lessons in selling to healthcare:

• Focus on business problems, not technology - Many healthcare VARs become enamored with certain types of technology. Consequently, these VARs forget the importance of developing systems around customers' unique needs.
  
  "Unless VARs have evaluated the customer's environment, they shouldn't worry about whether the customer needs a relational or an object-oriented database," Jim Bresee says. "Most users don't care what kind of databases they use. They are concerned with being able to easily access the data they need."
• Develop competent support systems - Healthcare VARs should offer 24-hour help desk support because the support requirements for healthcare are more intensive than in most other vertical markets, he says. "If a hospital's system fails in the middle of the night, the hospital has to get the system back up and running immediately," he adds.
• Research business problems -"Two years ago, we didn't spend much time at the customer site until we'd signed a contract," Jim Bresee says. IDX knew it had to do more on-site evaluation as healthcare became more complex. "We used to work primarily with doctor's offices and hospitals that operated independently," he concludes. "A few years ago, we didn't have to worry about interfacing systems to anything else. Today, that isn't the case because affiliations have become the norm in the industry."