In growing numbers, providers are embracing Healthcare SaaS business solutions to improve efficiencies, increase data access, reduce costs and gain new tools.
The healthcare cloud market is predicted to grow at a cumulative average rate of 20.5% from 2010-2017.[i] Accenture believes that the SaaS market will achieve mainstream status from 2014-2016, demanding that companies develop an understanding of and a strategy for using Healthcare SaaS. [ii]
So why the switch to the cloud?
The healthcare IT market has changed:
- Financial pressures demand cuts in operational costs
- Space constraints limit room for new servers
- Integrated delivery networks (IDNs) and partnerships require quick, consistent software implementation across multiple, dispersed locations
- The government requires better tracking and easier sharing of electronic health data
- Organizations need deep data and analytics – clinical, financial and supply chain data, and their value-based relationships
- People have embraced the cloud, using computers and mobile devices in their everyday lives
Healthcare SaaS solutions meet these demands by providing cost and efficiency benefits over on-premise offerings:
- Faster uptime and adoption due to browser access and solutions that mimic online sites and search engines
- Automatic updates and patches to keep software current
- Flexibility in scaling, licensing and on-demand capacity
- Burden lifted from internal IT staff as software vendor provides the servers, software and updates
- Quick access to vast amounts of data [iii]
- The bridging of the information gap executives complain about to their IT organizations [iv]
And this translates to a big financial upside for your organization:
- Lower upfront costs due to monthly fees versus expensive licensed-based, installed software systems
- Lower total cost of ownership due to monthly subscription pricing and less internal staff time
- Faster time to value as the installation phase is shortened from 3-6 months to as little as one month, and adoption is more intuitive
Other industries that have transitioned to cloud-based ERP solutions, for example, have demonstrated a 45%-55% cost reduction from traditional on-premise solutions for initial set up. Once the changeover is made, the reported total cost of ownership is less than what most of the companies have been paying for ongoing support of their previous ERP packages. [v]
So what might rain on the parade of SaaS success?
In some cases, such as with traditional ERP systems, on-premise solutions are more feature-rich, so providers must weigh the financial/time advantage of moving to a healthcare SaaS alternative.
That said, many new SaaS solutions have features and functionality on-premise products never provided. For example, McKesson Strategic Supply Sourcing presents buyers with the best product choice based on your organization’s contracts and pricing—before they buy. This promotes organization-wide best choice/best value product choices and alleviates the back-end work to justify invoices, POs and contracts. No on-premise procurement solution can offer that.
Another concern I hear about is privacy and security. But cloud vendors have been addressing these concerns from the very beginning when web-based applications were delivered by application service providers (ASPs). Security is built into the products as a core attribute. I would venture to say that Healthcare SaaSproviders are doing a much better job of protecting data than many other businesses and department stores. Just saying.
Finally, as for interoperability, many cloud-based solutions are agnostic. Our strategic sourcing solution, for example, works with any ERP software and materials management information system (MMIS).
The outlook for Healthcare SaaS solutions is sunny. Theyaddress real business issues, and tomorrow’s solutions will do even more to improve efficiencies and increase business knowledge. Cloud solutions might be the silver lining to your financial success.
To learn more about our SaaS procurement solution, download our McKesson Strategic Supply Sourcing whitepapers.
[i] Healthcare Cloud Computing Market – Global Trends, Challenges, Opportunities & Forecasts (2012-2017) Report July 2012 summary; marketsandmarkets.com
[ii] The Next Healthcare IT Trend: Making Software as a Service for ERP; Accenture, 2011.
[iii] Cloud Computing for Healthcare: Just what the Doctor Ordered; DeDe Stokely; SaaS Markets; October 2, 2014; http://saasmarkets.com/cloud-computing-for-healthcare-just-what-the-doctor-ordered/
[iv] 5 Reasons to Consider SaaS for Your Business Applications; Datamation Executive Brief; Oracle; accessed online 3-6-2014, publication date not known
[v] Accenture, The Next Healthcare IT Trend: Making Software as a Service for ERP; http:www.accenture.com/us-en/Pages/insifht-next-heatlhcare-it-trends.aspx; March 8, 2011.