Newsday: Merger Madness and Why Hospitals are Moving Back to On-Prem Data with Dave Dyell

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Drex DeFord: Hey everyone. I'm Drex Deford, one of the principles of this Week Health and the 2 29 project here. Our mission is healthcare transformation powered by community. This is Newsday on the UN hacked channel, breaking down the cyber and risk stories that are [00:01:00] impacting healthcare. Here's some stuff you might want to know about.

Sarah Richardson: All right, well welcome to Newsday. It's Drex and I along with Dave Dyell from Innovative Consulting Group. And today's conversation I already love. As we were planning for some of the specifics we're gonna cover, we've got data archiving or application archiving and rationalization. Like what? An important topic right now.

Everywhere we go, people are talking about those things. Apra, which is such an unfortunate name to call it, we should think of something far fancier to say than that. But more than that, it's like how are you gonna rationalize your portfolio? And then how are you gonna archive it in a way that's meaningful while still meeting all the different requirements, regulatory, et cetera, and managing the cost in the expectation of some of that in a different environment.

So Dave, thank you so much for being here with us today.

Dave Dyell: Glad to be here. Look forward to the conversation.

Sarah Richardson: Drex your thoughts on some of this stuff?

Drex DeFord: Well, I'm just thinking, you, you all just wrote a blog on this and I mean, in the spirit of like, everything's connected to everything else. I think about the pressures that health systems are under right now financially from a cybersecurity [00:02:00] perspective.

Operations have to run perfectly. We can't have any downtime, whether it's cybersecurity related or if it's self-inflicted. We're always being asked to do more with less. Part of that ultimately has to come down to, how do I look at this huge number of applications that I have in my inventory?

We were on the road last week. We're on the road next week we're gonna be talking to dozens of health systems, and it's a story that comes up over and over with again with them. Like we've got 600 applications, we've had 900 applications. There's a lot of duplication. How do we get ourselves out of this mess?

How do you guys work with health systems to help them get out of that mess? I think, you know, especially when you look at the last few years when there's been so much m and a activity, right? With so many of the larger health systems, especially starting to consolidate more of the community hospitals around them, you know, a lot, oftentimes we talk to our CIO, you know, colleagues, they tell us over and over again, I don't even know what I have.

Dave Dyell: Right. I inherited, you know, these three things, four things you know, from these different health systems. I've [00:03:00] now, you know, implemented Epic across them, or I've implemented, you know, Oracle across them. Great. 'cause that was their primary EMR. But what about all those other systems? Right? What about the enterprise imaging system?

What about, you know, everything else that they have and what they find is they've just got all these different ancillaries out there and sometimes even just smaller departmental tools that nobody's taken a look at in years. And so, you know, going in and helping them really do a solid inventory about everything they have and now that they've acquired and then how we help them rationalize that.

Come up with a plan. Look at the actual contracts, right? Some of the contracts may still have three years left on them, so you can't get rid of them tomorrow, right? But others may actually be coming up for renewal. Next year, why would you let the auto renewal happen if you know you're going to need to, you know, sunset that application.

So, you know, again, if there is already a module running that's now in your new EMR platform, then we can obviously, you know, go ahead and turn that down, decommission it and then, you know, figure out what to do with it next, right? And that kind of automatically leads into the, well then how do I archive this, right?

What am I gonna do with these applications? You know, now that I have a rationalized [00:04:00] portfolio, and more importantly, what am I gonna do with that data? Yeah. And where am I gonna store it? How long am I gonna store it? Right? Hipaa, you know, as anywhere from five to 11 years, right? Depending on the state and you know, what the type of data is on how long that it needs to be stored.

Or

Drex DeFord: pediatric

data can

be even longer than that, right?

Sarah Richardson: 25 years in some cases. But Dave, one of the, you mentioned though, that whole, that ability to like catalog, 'cause you have things you don't know about. Beyond the application, there's gonna be the connectivity, whether that's gonna be the interface and sometimes it could be a dedicated pipeline going out there.

That whole continuum of understanding your complete. Portfolio is so key. How have you helped some of those customers when you think about that? Because when you have an abandoned interface and every once in a while I, it could still be transmitting things to other places or going into these like orphan environments.

What are some of the things you're seeing there? Because everything is now connected to everything else. It's not like we just turn off the app and things stop moving around. There's still stuff moving around in the ether. How do you help people get [00:05:00] there?

Dave Dyell: Yeah, so that's actually interesting that the, you know, from my background, I started my career in healthcare as a cloverleaf interface engineer.

So I wrote a lot of those interface that you're talking about. Yes. Yeah. So, I've been, you know, near and dear to my heart is integration and interoperability. And, you know, to me this is, you know, a big part of the archiving conversation. And a lot of people miss this, right? They don't think about the fact that yes, these systems are all interconnected and that there is data that are in each of these individual siloed systems that are not in everything else.

Sure, some of the data is interfaced between them, but it's not like we're actually replicating all of the data that's in an ancillary system into the EMR or into the EHR. We're not. So there is a subset of data that's always left behind. And as those applications are decommissioned, you're right, you have to go to each of those endpoints.

Hopefully it's an interface engine in between, so it's a little bit easier and it's at least consolidated. But for those that are still doing point to point and are, you know, especially in the now than days of APIs, there may be more of them that are point to point. As the APIs are talking directly to each other, you've [00:06:00] gotta really think about how we're gonna turn those off.

But when I start thinking about, you know, archiving in general, it's like, okay what data in that system? Is not in my EHR that I do need to archive off, right? That I do need to save. And then how often am I gonna have to access that data, right? All the archive vendors. I'd love to tell you how they can take all that data and very inexpensively store it for you in the cloud for that length of time.

That's great. That's not what kills people, right? What kills people is the access. It's now, you know, a year later and a court case has come up or something else has come up where I need to access that data, or I'm trying to do some, you know, some good population health management and I need to access that clinical data, right?

The access of it is where the cost comes in and it's the sticker shock behind that access sometimes really shocks. Organizations that we work with. 'Cause they didn't think of that when they were laying out their strategy. then I'm going to, you know, pivot a little bit here to this idea of ai.

Right now you start thinking about ai, and I want that AI model to not be based on just, you [00:07:00] know, the current active data, but hey, I've got all this data, right? I've got 10 years worth of data that's in my archive vendor. If I wanna bring that into an AI model and actually use it to help make better decisions about patient care or about financial operational decisions.

How am I gonna do that? How am I gonna access that data in an economical way to even allow it to participate in my AI strategy? And did I normalize it? Did I make sure that it was archived in a way that, you know, it could be rationalized itself and pulled into those conversations and into those models?

Chances are you didn't, right? Because you weren't thinking about how am I going to use the data? Five years down the road, you were thinking about how am I gonna actually just. It off my current system, right? I want the cyber exposure gone. That vendor sunset that application, right? They don't patch it anymore.

The operating system that it runs on doesn't produce patches anymore. So I just need to get it off, you know, my system's and into the cloud. Great. But now what do I do? Right? I, the operation wants to access it and I can't get to it. Does that make sense?

Drex DeFord (2): Yeah, it's been, it's always [00:08:00] interesting to, you know, kind of think about the legacy systems that are out there.

I was reading something the other day an article

[Mic bleed]

written about the number of legacy systems continue to exist in healthcare systems. Because they need that data for something of compliance reasons, if nothing else, and they continue to pay some kind of extraordinary maintenance costs to just keep those things running so that they have access to that data.

And a lot of that data was just stored, as you said, sort of in production. It's just a place we gotta put it, it's just part of the system. So being able to pull that out, put it in an archive in a way where the data's usable and accessible. It really is an interesting use case, this AI use case that you bring up, because sometimes when you go back and look at the historical data and you have an artificial intelligence capability to go back and look at it, you find patterns that you would've never found on your own.

You see things that you would've never figured out on your own. That's why the right kind of archiving is kind of like

the best [00:09:00] decision, right? The most important version of that archiving decision.

Dave Dyell: It is. And we've literally just recently helped an organization go through the strategy of do I need to archive my archive vendor because I didn't think about all this stuff ahead of time and the current financial structure that I have with my archiving vendor isn't gonna work if I want to go this way.

Right. We've had, we've even, you know, talked through a strategy with an organization of how do I pull the archive back in house? How do I not put it in the cloud? Because I want to access it so much that it wouldn't be financially viable to keep it in the cloud. Right? It's just not gonna happen. With all the AI initiatives that I plan on doing with the analytics and stuff that I want to do on top of that data, they just, the cloud is just not economical.

The access fees, the network fees, right? The storage fees are cheap, right? Storage is one of the cheapest things we can do nowadays. But when you actually think about all those other components to it, because they charge every single time. You know, you a w, s, Azure, you know Google doesn't matter, right?

Anytime you log into any one of those clouds, that network traffic is where they're getting you, right? And [00:10:00] so if you're gonna try to do something that's gonna continuously access that data store, the fees are gonna be just exorbitant. So if I pull that back in and take it outta cloud. Now I can do what I want with it.

Drex DeFord: We were having that conversation the other day with somebody, Sarah, I can't remember who, but the conversation about what are the right things to bring back on-prem. A lot of folks have sort of gone through this process of push everything to the cloud, push everything to go get out of the data center business, don't want to be in that business.

And now we're seeing a lot of people rethinking that strategy around maybe I can have my own internal cloud for data that I'm gonna use. Like really heavy duty use. I need to have it OnPrem now because I can better manage the cost. I can better manage the turnover of the hardware. I can do all the, those things myself.

And as you said you see those bills just ring up in the cloud. You're seeing a ton of that, huh? Like a lot? Or is it just, this is one of the things people have to think

[about?]

Dave Dyell: It's, it comes up in every conversation when we're talking to a client about archiving, right? We start to because as, again, a lot of them [00:11:00] unfortunately, are sold the sales pitch.

Right. They're sold the sales pitch from the archive company and the fees from a storage perspective just really don't look bad. And when you see that access fee you just don't know what the volume of it's really going to Because again, a lot of times they haven't thought out the strategy.

Right. And so, you know, so many people think archiving is just, I've got these 10 applications, there's this many terabytes of data. You know, this is what I need from my archiving vendor. I'm done. But they don't think operationally, how often am I really gonna access it? So look at those access fees. Really think of that.

Drex DeFord: They think about these tiny use cases too. For that particular system. We need to archive it because we need to work down. AR in that system and probably for the next 90 days then we, you know, we're probably never really gonna need to touch that data again until they get into this AI conversation.

Sarah you, that's right. You've talked to a lot of folks about this too.

Sarah Richardson: I have because. I mean, the CTOs especially, I mean, they're so focused on the fact, the proliferation of [00:12:00] that storage need, of the ability to have all things from an imaging perspective. I have yet to have a conversation with somebody who's really solved the imaging storage equation.

And so Dave, I'm curious from your perspective and what you're seeing out in the marketplace as well is. There's gonna be different levels, deep archive, tertiary, et cetera. But when it comes to the like explosion of imaging especially, and the usage, to your point of those new algorithms that are helping people detect things better and faster, and looking for longer term trends, what is the right place to start with the imaging storage cost conundrum.

Dave Dyell: This is another one where we do focus folks back towards on-prem, right? Again, from an archiving perspective the size of that imaging data and the number of, you know, bytes that it's gonna consume from a network traffic perspective to move that back and forth through the cloud, that's where the fees just become too exorbitant.

You know, we're actually doing a very large you know, enterprise imaging, at a current client right now up in Boston. And, you know, that's a big part of our strategy for them is, you know, where are you gonna really put [00:13:00] this store? And again, don't think about today. Right now they're very focused on the fact that they have multiple imaging systems.

And so they have, you know, each of the ologies are all fighting for, right, what they want out of the new enterprise imaging system, which is fine, and we'll make sure all those requirements are met, but it goes beyond the system selection. It then goes to how is that archive going to be used in the future?

What do we plan to do with it? Are we gonna bring in, you know, AI technology that's gonna read those images for us? And if we are, what's that look like? Or does our enterprise imaging vendor provide some of that AI capability already? Or are we gonna do our own studies? This happens to be, you know, a teaching hospital.

And so they're gonna do some of their own, you know, studies, right? They're gonna have students who are gonna want to, you know, do research a cloud environment with imaging. It is just gonna be too exhaustively expensive. So that's where we feel they're gonna, they're gonna almost have to pull it back into an on-prem conversation.

Sarah Richardson: I think that's, we're also starting to see though, like the how roles have changed organizationally, how people think about things. It's not just, Hey, we're gonna put these boxes over [00:14:00] here, these boxes over here. We're gonna pull this information out of there. In the relationships that you have with your customers and some of the things that you're seeing trend out there, how have the roles of the leaders and the individuals changed in terms of their thinking on some of these?

It's one thing to say, we're gonna go swap EMRs. Oh, we're gonna go swap vendors for imaging as an example. That brass tax decision making capability really comes into play. And so what are you seeing in terms of how people are showing up to have these discussions?

Dave Dyell: Well, you know, drex kind as you mentioned early on in this conversation, right?

You know, the world is under a lot of margin pressure right now. I think that's why we've seen a lot of CIOs all of a sudden report to A CFO, right? Whereas before they were, you know, sitting at the table now all of a sudden they're reporting to the CFO and I think a lot of that has been driven by these different margin pressures that the whole market is dealing with right now.

Whether it's the big beautiful bill, whether it's some of the other, you know, changes to Medicare and Medicaid, you know, those pressures have made those roles kind of change. And you know, we're even seeing organizations that are kind of splitting responsibility where the CIO is [00:15:00] taking over kind of more maintenance.

The IT environment and the COO is taking over, you know, how they're actually going to then deploy, especially like in these m and a environments where, you know, they may be rolling out the new EMR across every one of the acquired entities. There's now a new, you know, deployment group that is now reporting into the COO side to handle that rollout of the operation versus, you know, the IT side is now taking over more the maintenance of the, I hate to call it the legacy environment, right, but the current system, the trains running.

Sarah Richardson: Yeah,

Dave Dyell: that's correct.

Sarah Richardson: Let's go to the m and a space, though. Let's kinda round out our conversation with that m and a. Because I'm a firm believer, now this is all gonna be cultural and organizational to a degree, but I've been in enough organizations where m and a's always been part of the equation, Dave, and so my vote is integrated as soon as possible because the longer you wait, the more just particular has come down the road.

Mostly the human aspect from all the work you have done, and Drexel will be important from your perspective as well. When you are doing m and a, when you're bringing things into your house, what's your philosophy on that?

Dave Dyell: Well, it depends on what level you're [00:16:00] talking about. You're talking about it, you're talking about people, you're talking about, you know, processes.

I think overall you know, our general philosophy, and we do this even within our own business is the principle of do no harm. You wanna do no harm, first of all especially when you're dealing with a clinical system, if you are gonna go to it right, into some of those processes and workflows.

But we do agree with you. There is also gotta be a certain amount of ripping the bandaid off. Right? You're not gonna make everybody happy. But as long as you're not doing any harm you know, making them happy is, is kind of a, a secondary consideration, right? Because you've got to make the changes that are necessary to bring the organization together and to get the value out of, you know, the reason why you bought the thing in the first place.

Right. So there's gotta be a balance there, I think, you know, between those two. But where was your question more specifically focused? Was it on the IT side or was it on the human capital side.

Sarah Richardson: I'm gonna say it's both. 'cause to my answer is always the technology's already there. When you consider, to your point you just bought a new practice, what was the point of buying them?

Like what was, what did it mean to achieve for us? Was it market share? Was it an advantage? Access, whatnot? But then how [00:17:00] long did their system stay alive? This goes back into. Are we integrating the data or not? Do we leave it in an archive capacity? Why are we bringing certain things forward? How much is that gonna cost?

How do we retire all of this? That's why for the years that the CIO pulled away from the CFO reporting structure, maybe it's leaning back in there, it's like, okay, but there's, the financial aspect is one piece, but the operational components and really some of those like. Brass tacks, reasons why we did something.

Those often get forgotten in that planning. 'cause it's always about this one thing. And so I would say it's more about the long-term value of why we even brought something into our house in the first place.

Drex DeFord: It may be things like, yeah, you're right, more market share or being able to get into a particular community.

But the thing that everybody just assumes is gonna happen, which is really difficult to assume in a lot of these m and a business plans because. It's not often, you know, we don't get real deep into it during the due diligence, and that is the back office consolidation [00:18:00] stuff. Not just the business operations, but clinical operations, app rationalization and data archiving and all those things.

We think we're gonna get big savings there, but we don't often plan it until after the deal is signed.

[Mic bleed]

I'm sure, Dave, you get pulled into those kinds of deals all the time.

Dave Dyell: What's interesting is even the one being acquired oftentimes doesn't know their own inventory. Right? Right. So they don't know it to begin with.

So they really can't even include it in a diligence process. And when we get involved in helping, you know, facilities plan strategically of how they're gonna handle an acquisition, you know, that's one of the first things we recommend is that you've gotta go in and do you know. Day after close, right?

Start a rationalization process to really understand what you just bought and what's really there. 'cause chances are, as much as they do have an inventory and all sites maintain an inventory to some level, right? It's not accurate. And so you've really gotta go in and do that as a first step so you can see what you have.

And then to your points there, you've gotta go ahead and kind of round out, you know, what that turnoff [00:19:00] plan is gonna be to start getting the synergy that you expected to get out of that opportunity. Right? If you don't have that plan and you haven't thought through, you know, what that's gonna look like, then, you know, again you're kind of betting on some things with a lot of unknowns.

Sarah Richardson: So, Dave, when you forecast out, say 2026, curious what you. Believe will be the biggest lean in some of these spaces. And how do people prepare for that? What are the things they need to be thinking about going into 26 when mergers, acquisitions, rationalization, storage costs, archiving? Like what's gonna be like, what do you want people to know?

Dave Dyell: So I think the real thing is to, you know, do the planning. Do the strategy, right? Everybody thinks sometimes that, you know, strategic consulting is a waste of money, right? That they've got the team, they can think through it, they can do the plans themselves. You know, use an expert doesn't have to be us, right?

You know, there's plenty of folks out there who can talk about these topics, but do the planning, bring somebody in who's really, you know, versed in this, who can sit down with you, who can talk about that five year strategic [00:20:00] plan. And what the organization is planning on doing, whether it be m and a, whether it be around specific, you know, up upgrades, whether it's consolidation, like I said, on the enterprise imaging side, who really can help you sit down from a business perspective and think through those things, and then think through the data usage.

And what you're really going to be doing with that data because that's gonna then drive the archiving strategy, right? What you're doing with that data is so important and your point around integration is so critical. You know, understanding how in the new world, all of these systems need to be integrated.

Is that integration going to enable your AI initiatives? Right? Is it gonna create a data set that is normalized and rationalized and is gonna have the right, you know, structure that's gonna enable those initiatives that you want to try to do each of those things in a little vacuum is what we see a lot of organizations doing, right?

Even taking them sometimes as point projects without somebody being able to holistically look at the entire strategy and really put that together So. Take the time, hire someone, have them come [00:21:00] in and really help you actually do that. Again, not trying to make a sales pitch for innovative, although we're happy to help you, but at the end of the day, if, you know, take the time to do the strategy.

Think out three years, five years. Don't just think about, oh, right now I'm under financial pressure. I've gotta go, you know, turn off these four applications and get 'em archived. That's a short term view. You've got to take the long view.

Sarah Richardson: And it'll probably cost you more in the long run. If you don't do that the way you're supposed to, it will.

So great perspective. Dave, thank you so much for taking time with us today, talking about current events, what's happening in the marketplace, more importantly, all the amazing things you're bringing to the table in terms of what you can rationalize and what you can archive. So thanks for the conversation today.

Dave Dyell: Happy to be here. Thanks again.

Sarah Richardson: All right. Thanks for listening. That's all for now.

Drex DeFord: That's Newsday on UNH. Hack with Drex De Ford. Get daily security insights delivered to your inbox because every healthcare leader needs a community to lean on and learn from. Sign up at this week, health.com/subscribe and stay safe out there. I'll see you around [00:22:00] campus.