In a recent CHIME focus group facilitated by Healthlink Advisors, we gained valuable insight into how healthcare CIOs perceive managed services (as a concept), as well as vendors of these services. The intent of the focus group (hosted by Leidos) was to gain a better understanding of how healthcare organizations evaluate different types of managed services and managed services vendors to help improve performance, gain efficiencies, drive out cost, mitigate the challenges of a fluid workforce, and stabilize the delivery of services to the end-user community. Focus group participants included a cross-section of CIOs from various health systems and hospitals in different geographies and sizes across the U.S.

Q. What areas do you feel managed services can provide the most opportunity for “value” to your organization?

Pros cited:

  • Improvement in “value” (which was cited as not always associated with cost)
  • Availability of top-tier talent (quality and coverage which may not be available locally)
  • 24×7 monitoring
  • Fast onboarding

Cons cited:

  • Cost
  • Lack of flexibility/agility
  • Remote service delivery 

Q. What are your biggest concerns when exploring a managed service approach for your organization?  Are those concerns topic specific, general or both (people, service levels, etc.)?

Top concerns:

  • End-user satisfaction
  • Quality of services 
  • Quality of talent and talent retention
  • Reduced control
  • Hidden costs
  • Limited flexibility to “change direction” or “expand”
  • An organization must be culturally ready for such an arrangement. C-suite biases from previous experiences may come into play

Q. What best practices (not just SLAs) are you aware of that help ensure a smooth transition of services as well as the ongoing delivery of those services at or above expectation?  

  • Having a robust vendor management program with vendor scorecards and periodic review to assess the value of the relationship
  • Having a single point of contact with the vendor and someone who understands your perspectives, organization, and its mission, and not someone waiting to sell you the next service
  • Clear delineation of responsibilities, especially in scenarios where multiple vendors have formed a consortium to provide a managed service where one vendor is serving as the prime
  • Conducting and attesting to security risk assessment/assurances
  • Striking a balance in the contract that defines specific services to be provided, and provides flexibility to add supplementary services as they are needed

Q. How are “shared risk” models viewed by the client when exploring a managed services relationship? 

  • There are many variables and dimensions of success. To work, it requires a definition of who controls what, and under what percent of responsibility
  • This is hard to put into practice. Correlation is not causation; getting to the root of an outcome can often lead to a dispute which can set the wrong tone at the beginning of the relationship.

Final thoughts/important factors for consideration:

  • Flexibility – will the vendor help me with needs I didn’t contract for? 
  • Security – with 24×7 support
  • Expense – compare it to what you’re spending on internal staff
  • Use managed services where it makes sense. Certain functions in IT may lend themselves to in-house support, but managed services may provide more continuity and stability
  • Seek partners focused on a long-term relationship
  • Managed services relationships require care and feeding – you can’t “set it and forget it”
  • Managed services can be a valuable asset to provide top-tier talent quickly and reliably; a valuable benefit in the context of the current labor market

Healthlink Advisors recommendation: When making a go/no go decision for managed services, leverage an advisory services firm or trusted advisor to help determine your key strategic decision factors. Select an advisor that will help you navigate through the complexities of such a decision, and one that will help you find the appropriate managed services partner for your organization’s unique circumstances and needs.