Using Market Data When Changing Vendors

Summary

In the healthcare industry, it's essential to use market data to make informed purchasing decisions. Using St. Joseph's Health in New Jersey as a case study, the article emphasizes the importance of conducting thorough research and evaluation of potential vendors and services. The article warns against making costly errors like the National Health Service's IT project failure in the UK. Healthcare organizations should spend at least 6-12 months on research, analysis, and stakeholder engagement to ensure they select a vendor or service that meets their unique requirements and goals. Ultimately, the goal is to enhance patient outcomes and satisfaction while also providing a good return on investment.

Analysis

Making a significant purchase decision without carefully analyzing the market can have expensive repercussions in the quickly changing healthcare sector. It's crucial for healthcare organizations to use market data to guide their decision-making when changing their current vendors or implementing new third-party services.

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Case Study: St. Joseph's Health
St. Joseph's Health in New Jersey exemplifies the significance of utilizing market data prior to making a significant purchase in the healthcare industry. The health system sought to replace its electronic health record (EHR) system, which had been in place for over a decade, in 2017.

Instead of selecting a new EHR system based solely on reputation or word-of-mouth recommendations, St. Joseph's conducted a comprehensive market and vendor evaluation. The health system employed external market research firms to provide information on EHR vendors and their performance, which assisted in narrowing down the options and identifying the most promising candidates.

St. Joseph's ultimately selected a new EHR vendor following a comprehensive evaluation procedure that included in-depth product demonstrations, site visits, and reference checks. The new system was implemented in stages, with the first phase becoming operational in May 2019.

By taking a data-driven approach to their vendor selection process, St. Joseph's was able to make an informed decision that would support their patient care goals and enable the health system to coordinate care more effectively. In addition, the new EHR system was designed to be more user-friendly and efficient, which has contributed to an increase in provider satisfaction and a reduction in burnout.‍

Healthcare depends heavily on the patient care sector, so any changes made to enhance patient care must be carefully considered. Changing suppliers or services may involve a multi-year commitment and hefty time and financial outlays.

As a result, before making any significant purchasing decisions, healthcare organizations must thoroughly research and comprehend the market.

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Case Study: Total Purchasing Spend
According to a study conducted by the healthcare consulting firm Navigant, healthcare organizations spend about $39 billion annually on purchased services. It is even more important for healthcare organizations to conduct exhaustive market research to ensure that they are making the right investment in light of this substantial sum.

The research process entails analyzing the vendor's reputation, reviewing their experience and expertise, and evaluating the quality and cost of their services. This research should include an analysis of the vendor's product offerings, a review of the competitive landscape, and an evaluation of the company's financial stability and reputation as a whole.

In addition, the research process should evaluate the vendor's ability to provide ongoing support and maintenance services, their response time to issues or problems, and their capacity to meet the organization's unique requirements.

In order to accomplish this, healthcare organizations should carefully review vendor proposals and contracts. This can aid in ensuring that the organization is receiving the best return on its investment and that the vendor can provide the required level of support.

Spending at least a few weeks to a few months on research should be a best practice for the research procedure. Healthcare organizations should identify their unique requirements and objectives, compile a list of potential vendors, and conduct a thorough market analysis to narrow their options.

By conducting in-depth research and analysis, healthcare organizations can avoid making costly errors and select vendors who will provide them with the best service and value possible. This will ultimately result in improved patient outcomes and increased overall satisfaction with the services offered by the healthcare organization.

Healthcare organizations can learn what other businesses in the sector are doing, what vendors are out there, and what reasonable price points are by utilizing market data. Additionally, it enables healthcare organizations to compare their current vendors to those of their rivals and pinpoint areas for development.

Asking the right questions when assessing potential vendors or services is crucial to ensuring that they can satisfy the unique requirements of the healthcare organization. You might inquire about their knowledge of the regulatory environment, their experience in the healthcare sector, and the degree of customization they are capable of offering. Healthcare organizations risk investing heavily in a vendor or service that doesn't meet their needs, wasting time and resources, if they don't research the market and ask the right questions.

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Case Study: NHS Challenges
One real-world example of this is the case of the National Health Service (NHS) in the UK. In 2013, the NHS launched a major IT project to replace its outdated paper-based patient record system with a new electronic system known as the Care Records Service (CRS).

The NHS initially signed a £6.2 billion contract with a consortium of IT companies to implement the new system, without thoroughly researching the market and evaluating alternative options. However, the project soon encountered significant problems, including delays, technical issues, and a lack of user engagement.

After several years of setbacks and increasing costs, the NHS eventually scrapped the project in 2011, having spent an estimated £10 billion on the failed initiative. This case highlights the importance of thoroughly researching the market, asking the right questions, and evaluating alternative options before making any significant purchasing decisions.

According to industry experts at Uppercentile, a best practice is to spend at least 6-12 months evaluating the market, analyzing vendor offerings, and engaging with stakeholders to ensure that the selected vendor or service aligns with the organization's needs and goals. This investment of time and effort upfront can save healthcare organizations significant costs and resources in the long run.

Finding the best value for your money is not the only goal of using market data to guide your purchasing decisions. The goal is to make sure that the needs of the patients come first at all times. The best investment a healthcare organization can make is in a vendor or service that can enhance patient outcomes and satisfaction.

It is crucial to consider market data before making a significant purchase or switching vendors. To make sure they are making decisions that will benefit both patients and their bottom line, healthcare organizations must take the time to research and evaluate the market. Healthcare organizations can confidently make an investment in a third-party service that will help them meet their goals for patient care while also enhancing their overall operations with the right research and strategy.

Final Thoughts

When it comes to acquiring new products and services for their organizations, executives in the healthcare industry must make prudent choices.

To make informed decisions and avoid costly errors, it is essential to conduct exhaustive research on the market and the competitive landscape. Executives can make the best decisions for their organizations and, ultimately, improve patient care by taking the time to evaluate their options, ask pertinent questions, and utilize market data. Change should be approached strategically and cautiously, with a focus on long-term objectives and sustainability. Investing the time and resources required in advance can save time, money, and headaches in the long run.