How Healthcare Data Archiving Solutions Can Reduce Technical Debt During M&A Activities

Driving M&A Success with Healthcare Data Archiving Solutions

Hospitals use hundreds, if not thousands, of IT applications to care for patients, track finances, manage infrastructure, and plan for future growth, which makes reducing technical debt through retiring outmoded applications an ongoing activity. But when a hospital acquires a physician practice, an ambulatory care facility, or another hospital, that technical debt compounds considerably.

Having been involved in M&A activities for years, I’ve seen firsthand the critical role that a robust archiving strategy plays in helping healthcare organizations manage technical debt, retire legacy applications, and ensure the data is optimally retained for continued and future use.

Based on my experience, here are several best to help healthcare organizations address these challenges and maximize potential value in M&A, while protecting patient records from data loss or breaches by maintaining data integrity.

1. Understand Your Software Landscape

Every organization has software applications that have seen better days. Often, a newer application has been implemented, but the old one remains necessary for historical reasons or due to incompatibility with the new EHR/EMR. The first step in any application archival strategy is to fully understand the software application landscape—both current and historic.

This can be particularly challenging in a hospital environment due to the sheer number of applications and their disparate uses. For instance, diagnostic imaging software is only used by radiologists, and historic PACS may get overlooked during the software survey.

This is where application rationalization becomes crucial. It involves conducting a thorough inventory of all applications to identify overlaps, redundancies, and outdated ones for potential archival. Millions of dollars are often wasted on IT applications that are little used, if at all. When left under the radar, these applications not only bloat your tech stack, but they also increase the cyber-attack surface.

When deciding what should be archived, your organization should consider the volume of legacy data, number of legacy applications, compliance, data governance policies, data security, and costs. Many organizations mistakenly focus on archiving high-value IT applications containing clinical and patient data, choosing to delay archival of older, smaller applications.

While high value applications are important, prudent organizations recognize the value of all software applications. As Dr. Kel Pults, Chief Clinical Officer and Vice President, Government Strategy at MediQuant says, “Healthcare leaders should avoid stepping over a dollar to save a dime. Properly managing and archiving your IT applications now can prevent much larger expenses down the road.”

Dr. Pults recommends starting application rationalization early in the M&A process. She says, “The insights from your inventory are helpful to create a realistic EMR/EHR archiving budget. It can also inform your transition services agreement, ensuring you’ve set data transfer deadlines that match the scope and complexity of your IT environment.”

2. Define Your Data Retention Requirements

3. Set Realistic Data Transfer Deadlines During M&A Transactions

4. Build a Healthcare Data Archiving Core Competency

Having the right skills, people, partners, and processes in place is essential to manage legacy data effectively. Cross-disciplinary teams that include clinicians, financial staff, IT, HIM, and legal staff can offer valuable perspectives on various aspects of your archival strategy.

Sometimes, hiring external workers may be necessary, which should be considered in your planning and budgeting. A healthcare data archive partner can help set priorities and oversee the effort.

In a recent panel discussion with several CIOs from leading healthcare systems and hospitals, MediQuant President and CEO, Jim Jacobs, offered advice to healthcare leaders undergoing archival during mergers or acquisitions.

He said, “By involving diverse stakeholders and filling gaps in skills through training and partnerships, organizations can build a strong archiving competency that meets immediate needs and sets the foundation for the future. The best practices are where CIOs have tremendous support from their executive colleagues. It’s [archival] viewed as a system. Leveraging organizations like CHIME (The College of Health Information Executives) and others to help more CIOs build competencies around these areas is tied to hard ROI.”

Be Aggressive in Tackling Technical Debt with Healthcare Data Archiving Solutions

More than half (56%) of respondents to a global tech survey said outdated technology and technical debt contribute significantly to wasted IT budgets, with another 43% pointing to redundant applications. The majority note that up to 20% of their current IT budget is wasted, and 25% say the waste tops 20%.

Hospitals face unique challenges with technical debt — even without mergers and acquisitions. Information must be available 24/7/365 to effectively care for patients. By understanding the software application landscape thoroughly, adhering to data retention standards, building a core competency on archiving, and setting realistic migration timelines, hospitals and health systems can tackle technical debt successfully. This creates a more secure computing environment, frees up data for new uses, and saves the organization valuable money by retiring legacy maintenance contracts.

Take this client example: When Greenville Hospital System and Palmetto Health merged to create Prisma Health—the largest nonprofit healthcare system in South Carolina—they needed to standardize on the Epic EHR, which required moving from Cerner Millennium. This kicked off an aggressive project to archive clinical and financial applications to meet regulatory requirements while providing clinicians Epic access.

Like many organizations undergoing a major M&A, Prisma faced challenges along the way. Early in the project, they discovered that archiving medical records from one system might require separate migrations for financial, acute care, and ambulatory data. But, with MediQuant’s expert archival guidance, Prisma Health overcame this hurdle and managed to save $14 million in annual maintenance and labor costs. After completing over 60 migrations (so far), Prisma has saved more than $1,000,000 in historic accounts receivables that would otherwise have been lost.