Why do hospitals and health systems take a long time to make technology decisions?

Initial steps

Hospital administrators and health systems typically look for new products when they need an update to their current technology or when they are looking for a solution to user requests. With technology advancing so rapidly, this can be a frequent occurrence. When discussing user requests, this could be staff, patients, or anyone applicable to the healthcare system as a whole.

The World Health Organization outlines the first few steps of the procurement process as being evaluation, planning/needs assessment, and procurement. If the system or administration is already looking at purchasing, they are likely on the third step and want to look for an effective product for their needs based on the assessment and evaluation. This part of the process alone can take weeks. Oftentimes, the needs assessment includes things such as:

• The target population

• Resources needed

• The end result

• Assessing health conditions or determinants

• Determining possible interventions

• Risk-management strategies

Who’s involved?

Another reason a purchase can take a lengthy period of time is because of all the decision makers involved. This is particularly true if you are dealing with a large hospital system or organization. Typically, administrators serve as the operational managers and are a key player of the purchasing process. Other roles that are often included are:

• Chief Medical Officer

• Chief Clinical Officer

• Chief Experience Officer

• Executives

• Information Services, such as those in billing or medical records

• Social Services or Diagnostic Services staff

• Physicians

You can imagine that when dealing with even a few of these roles, it can become difficult to manage important decisions as a group. It takes time for administrators to have established roles to collaborate and come to an agreement. Keep in mind these roles will change depending on the product, department, or organization.

Researching vendors and products

A lot of the time that goes into purchasing requires extensive research on what products are on the market and what they have to offer. The research they compile will include things like price, effectiveness, compatibility, and length of training or implementation. Data will be collected by identifying vendors, comparing the products, looking at any demonstrations, and meeting with vendors. Some of the ways in which administrators or researchers will find products are:

• Direct contact with vendors

• Group Purchasing Organization (GPO)

• Peer recommendations

• Online research

• Internal resources

• Conferences or professional societies

The leading way in which administrators used resources was by directly contacting the vendor, with Group Purchasing Organizations following closely behind. A study by Google indicated that around 77% of administrators choose direct contact with the vendor, compared to 51% utilizing online resources. A Group Purchasing Organization is an entity that negotiates discounts with a variety of vendors for healthcare providers or practices. They do not purchase the product, but strictly negotiate contracts to help save money in the most effective manner.

Establishing the budget

When making a new purchase decision, healthcare leaders will discuss how much they are willing to spend in their budget for the purchase. They will also consider how much cost it will take up front, as well as for training or implementation. Long-term savings will also be discussed. If the product is effective at reducing costly procedures or visits, it may be able to offset any initial costs. There are three types of budgeting done by healthcare organizations:

1. Operational budgeting: focused on operational, training, and staffing costs. This may come into play with a new product when there needs to be training on how to use a new digital technology item such as an app or a healthcare portal.

2. Capital budgeting: directed at the purchase of goods like beds, equipment, facilities, or infrastructure.

3. Rolling forecasting: this process is focused on financial projections, which typically occur on a monthly or quarterly basis. This is based on historical data and allows the company to plan more thoroughly.

Regulations and privacy

With any new product in healthcare, there must be considerations of the legal implications and regulations. When dealing with medical information, there are security measures that need to be taken to avoid any potential threat of stealing protected health information (PHI). One of the most extensive sources for regulations is the U.S. Food and Drug Administration Digital Health Center of Excellence.

Each form of digital health technology has a description which may, in turn, have a set of rules and policies it must abide by. For instance, radio frequency wireless devices must be in compliance with the Federal Communications Commission (FCC). Similarly, there are rules and regulations for telecommunications. This can play into how much time a hospital or administration takes to purchase a product, since these standards must be followed and put into practice to protect patient information.

Summary

When you are selling a digital health product, we know you’re eager to get it out into the healthcare system and see how it succeeds. Be patient with healthcare administrators and remember that the above steps can take a long time to put into place, but it will be worth it!