Managing Technical Debt in the Healthcare Industry
“Everything is running well when it’s running well.” It’s a maxim I’ve been thinking about lately, especially as I run across articles on the topic of “technical debt.” It’s especially critical in the healthcare industry – and more complicated.
All IT systems require maintenance, which includes not only software and hardware, but also full-time IT personnel and consultants. “Debt” occurs when that maintenance (and staffing issues) is “deferred.” Perhaps the biggest challenge is figuring out what can be delayed without costing you more in the not-too-distant future.
U.S. HealthTek Founder Bryan Firestone
The first requirement is that C-Suite executives need to know where the business is going to go. Are we going to sell soon or work toward that strategically planned volume growth? Factoring in depreciation/technical debt becomes especially critical when doing the math on this equation.
One of our jobs at U.S. HealthTek, after identifying tech debt issues, is prioritizing which warrants attention first. Assessing security issues is another extremely important as well. As you know, our organizations are a top target for hackers. According to IBM, the average cost of a healthcare data breach was $9.77 million in 2024 per instance. Cyber criminals committing big breaches usually trace to software that isn’t up to date.
Our Technical Debt
We all accumulate technical debt in many parts of our lives. Like financial debt, there is “interest” involved in the sense that any technology we use immediately starts on the road of being outdated. Those higher maintenance costs can creep up slowly, so the first priority is to be aware it’s happening and know the warning signs. Also tricky is knowing when the easy, quick fix is good enough or if in the long run, the better, sustainable solution is the smarter move.
The technology plan should be in sync with the business plan. A typical technology plan looks out three to five years in order to stay ahead of the business’s needs and to project the approximate spend requirements. A technology plan will be different for a business that is organically growing as opposed to growing through acquisition, and different still from a business that is planning on going through a process of preparing for sale. Matching the tech plan to the business plan is critical to keep the spending appropriate.
Build v. Buy
IT professionals like to build, because that’s what we are trained to do. But increasingly, there are more off-the-shelf options.
What we find is that there are young developers who know instinctively that they can build IT technology well. They have the vision of what it should be and how it should work and calculate the cost of the number of hours it’ll take. But what they don’t factor in is what it is going to take long-term to maintain the software. After a launch, bugs are discovered and improvements are requested. So, a $100,000 six-month build becomes a $250,000 year-round one.
But there is no guarantee with buying something either. First of all, we are not a one-size-fits-all industry. Research needs to be done on something that is reliable and flexible. Another factor is you never really own that technology; it’s more like you’re renting it. The best strategy is to spend on technology that differentiates you from your competitors. Building something in-house requires keeping it staffed in order to maintain it as well as keeping someone who’s knowledgeable on the custom technology. Unfortunately, IT is never just “one and done.”
The best answer is a qualified outside consultant to see which of these avenues is the right fit for your organization.
Feeling Lucky?
So it’s a bet – and you hedge your bet by figuring out how much you’re going to put in relation to the higher probability that the business will stay up and running.
When we partner with an organization, analyzing the technical debt that has accumulated is one of the first things we do. Technical debt comes in many forms: You start seeing glitches. There are some outages. There’s more staff required. The current staff require more training. The data is slowly but consistently becoming more flawed, and the quality of the technology is waning. There is more support needed, and that support is taking longer.
The danger of not monitoring accurately is real. We’ve seen large companies have major failures that lasted weeks because they either didn’t understand the liabilities or chose to wait until failure instead of being proactive.
Scalability & Differentiation
Other aspects we see include organizations don’t always match their growth factor with scalability limits. One example is implementing a LIMS system that does well for them in their midsize market, but when they expand into a larger organization, it doesn’t keep up with the demand. So yes, you may get away with something relatively less expensive for five years, but then you start to outgrow the system. From an architecture and hardware perspective, we try to forecast the need to scale. But software products don’t necessarily scale well. Sometimes the software product scales well but the way it is configured doesn’t.
Finally, there is that perspective of differentiation. What is your business able to do that your competitors are not? And what can you do that further sets you apart? When investing in a new system, I always encourage clients to see it from more than a commodity perspective. Can quality be drastically improved? Turnaround? And let’s improve the look of the results and create something of more value than the competition. That’s where you spend your money.
So that’s the good news: Staving off technical debt is also the way to stay ahead of the competition and better serve your patients, clients, and vendors. For those with a deep understanding of technical debt, “Everything that is running well when it’s running well” should be the wakeup call to be proactive, because those who are able to constantly stave off technical debt are going to be the ones who reap the competitive and financial advantages.