Cloud-Based ERPs Support the Path to Value-Based Care

The cloud will speed the integration of ERP, supply chain and other ancillary systems, helping stakeholders maintain costs while optimizing outcomes

Heathcare Records

Healthcare IT leaders have spent the last decade primarily focused on critical investments related to clinical quality improvements—including implementing electronic health records (EHRs), adopting ICD-10 and instituting population health initiatives.

Fueling this focus is the deployment of EHRs, the Affordable Care Act and the need to demonstrate meaningful use of EHR systems to receive incentive payments from the Centers for Medicare & Medicaid Services (CMS) EHR Incentive Programs.

Today, nearly all U.S. hospitals have deployed a certified EHR solution and many have optimized use of their EHRs to drive further clinical productivity and efficiency improvements. The next step for healthcare leaders is to identify and implement potentially lucrative process improvements through the deployment of ERP systems.

Cloud-Based ERP Benefits

As the process of rolling out EHRs slows, the focus has changed to the next generation of ERP system, cloud-hosted solutions that link HR, finance and supply chain. In fact, a recent report from KLAS finds that more and more C-suite executives are warming to the benefits of the cloud: massive computing power, better security, improved efficiency and transparency, all at significantly lower operating costs.

Healthcare’s shift to value-based care is accelerating, putting pressure on industry leaders to seek ways to optimize their businesses further and drive cost efficiencies. Healthcare executives are now looking to ERP investments to drive process improvements while demonstrating cost efficiency.

The cloud’s lighter-weight nature and its ability to scale supports growth without breaking IT budgets. This is a critical factor for IT leaders, who spent a decade constrained by the financial pressures of EHR implementations. The cloud also promises hospitals the ability to future-proof their ERP investments. As technology advances through the advent of predictive analytics and artificial intelligence, the cloud makes it easier and more cost-effective to take advantage of new features and enhancements.

Moving to the cloud also makes it easier for relevant stakeholders to access the hospital’s ERP system and interact with other internal and external systems, such as supply chain management solutions. The cloud enables the industry to move away from siloed data and finally improve the availability and accessibility of information. The potential impact on the business cannot be understated. As an example, hospitals are dynamically linking core ERP information and external supply chain data to allow stakeholders to make decisions quicker. Analysts can identify opportunities to improve care, find areas for standardization and tie products to outcomes. 

Change Management Critical to Success

Transitioning to the cloud cannot be done in a vacuum, however. Operational change management was critical to success with EHRs and will be with ERPs as well. Training staff to learn new processes can be time-consuming and, as with all new technology, there can be a natural resistance to change. But the benefits are worth the investment. Strategic planning—including careful planning for how to drive adoption and ensure process improvements—will help define the total cost of ownership from the outset.

The cloud is a game-changer for ERP systems and the healthcare industry. The cloud will speed the integration of ERP, supply chain and other ancillary systems, helping stakeholders maintain costs while optimizing outcomes. The ability to collaborate in real time, results in cleaner, updated and more trusted data that will help accelerate the shift to the value-based model.

Jena Milan is executive director, product management with healthcare supply chain leader, GHX. 

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