Healthcare IT Consulting: Bigger is Not Always Better

    OREM, UT, March 09, 2009 /24-7PressRelease/ -- The healthcare IT (HIT) consulting market, once dominated by large full-service firms, is today expanding to include the talents of many smaller but high-performing boutique practices that offer very specialized services, according to a new report from healthcare research firm KLAS.

Over the past five years, the HIT consulting market has experienced significant consolidation, but that consolidation has ultimately led to more choices for healthcare providers, not fewer. Following several notable acquisitions, such as Healthlink Consulting's sale to IBM, many talented senior executives have left acquired firms to join or form new practices, giving providers a larger talent pool from which to choose.

In turn, these smaller firms are consistently outperforming industry heavyweights in a number of practice areas. Consider these results from the KLAS study, titled Maximizing Your Consulting Investment: A Report on Healthcare IT Consulting Services:

• The highest-ranked company in the Clinical Implementation Supportive, Planning and Assessment, Technical Services and Staff Augmentation categories were all smaller firms, most of which specialized in a specific product or type of work.
• In the Planning and Assessment category, the top seven performing firms were smaller consulting firms, most of which focused exclusively on advisory services.
• Four firms formed since 2002 scored an 88 or above on KLAS' overall performance rating, which is exceptional.

"The market for HIT consulting has changed dramatically in the past several years," said Mike Smith, general manager for financial and services research at KLAS and author of the IT consulting report. "Providers have indicated that bigger is not always better, and paying more is not the insurance it once was.

"Large, full-service firms have deep benches, can weather the attrition of long projects well, and can offer consultants from the most senior level on down," Smith said. "On the flip side, however, some of these firms are more bureaucratic in nature, not as competitive in cost, and not necessarily the best in one area, though capable in multiple areas."

Cost, in particular, was cited by providers as an increasingly important criterion in the selection of IT consultants. Many CIOs suggest that cost is more seriously evaluated now than ever before, and the current economy has led to fewer projects and more of those projects going internal. However, that trend may be about to change, especially for the community hospital and ambulatory markets. Very few hospitals over 200 beds have yet to implement a core clinical information system, whereas growth continues in the community and ambulatory spaces. How the recently signed economic stimulus package will affect these trends is yet to be seen.

The KLAS report also goes beyond traditional practice areas to evaluate consulting firm competencies with specific technologies. For instance, while most large firms and many small ones offer clinical implementation services, certain firms implement specific products better. Providers have indicated that Deloitte Consulting does best with Epic; CSC, CTGHS and Perot Systems do best with Cerner; Coastal Healthcare does best with GE; and ACS, IBM and Perot Systems do best with Meditech. These areas of expertise can play an important role in the selection of the right IT consultant.

The Maximizing Your Consulting Investment: A Report on Healthcare IT Consulting Services report ranks the top-performing vendors in seven key service areas: Clinical Implementation Principal, Clinical Implementation Supportive, Financial ERP Implementation, Planning and Assessment, Staff Augmentation, Technical Services and Vendor Selection. The best-performing vendor overall in the study was Innovative Health Strategies (DBGC), which scored 97.0 out of 100 in the Vendor Selection category.

To learn more about the market for HIT consulting, as well as the strengths and weaknesses of participating firms, the Maximizing Your Consulting Investment: A Report on Healthcare IT Consulting Services report is available to healthcare providers online for a significant discount off the standard retail price. To purchase the full report, healthcare providers and vendors can visit www.KLASresearch.com.

About KLAS
KLAS is a research firm specializing in monitoring and reporting the performance of healthcare vendors. KLAS' mission is to improve delivery, by independently measuring vendor performance for the benefit of our healthcare provider partners, consultants, investors, and vendors. Working together with executives from over 4500 hospitals and over 2500 clinics, KLAS delivers timely reports, trends, and statistics, which provide a solid overview of vendor performance in the industry. KLAS measures performance of software, professional services, and medical equipment vendors. For more information, go to www.KLASresearch.com, email [email protected], or call 1-800-920-4109 to speak with a KLAS representative.

Media Contact:
Shawn Dickerson
KLAS
801-734-6504
[email protected]

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