Davis Wright Tremaine is conducting a series of webinars under the heading “Reinventing the Hospital.” The purpose of the series is to address “disruptive changes in healthcare” that “are transforming the way hospitals do business” by discussing “the latest developments” to show “where innovation is thriving” and to “offer a blueprint for where hospitals can succeed in the future of healthcare.”
Jim Mormann, Senior Vice President and Chief Information Officer of OSF Healthcare System, Scot Eberle, Chief Executive Officer of Fiberutilities Group, and myself, as a Davis Wright Tremaine partner, gave a webinar presentation on how to change the healthcare model by leveraging next generation networks, or NGNs. For purposes of our discussion, we defined NGNs as broadband networks that transport all information and services (voice, data, and all media types, such as video) together over a wide area.
Jim and Scot discussed how legacy communications architectures have become increasingly inadequate and incapable of supporting current and future health care delivery models. They showed how NGNs can fundamentally change and improve that model by reducing costs, increasing flexibility, maximizing new technologies and expanding healthcare services. Specifically, NGNs enable new applications and create ubiquitous connectivity using one network; they improve economics by reducing costs through centralization, by removing costly legacy technology and by decreasing the number of connections. At the same time, NGNs permit stability, reliability and geographical freedom. Communications is no longer constrained by a third party, such as a telephone company, nor by any borders.
As a case study, Jim showed how OSF Healthcare System has leveraged an NGN network to capitalize on new opportunities and drive down the cost of health care delivery while improving operational efficiencies and patient outcomes. The driver for OSF was the cost of operating, maintaining and upgrading OSF’s legacy network, which was reaching crisis levels. Total operating costs, for instance, increased by a factor of three in five years. OSF’s goals were to increase capacity, resiliency and flexibility as well as enable support of healthcare services, mitigate risk to its network and enable future healthcare applications.
We also discussed the funding options for NGNs. The federal government’s Healthcare Connect Fund, for instance, is equal to $400 million annually. Internal funds, either alone or coupled with government funds, are another source as are funds generated by sale of network capacity to third parties.
As a first step, we all agreed that it is necessary to conduct an assessment of the healthcare provider’s network and then compare it to what is needed. Once that step is accomplished, it is then necessary to determine how best to get there by creating a plan by which to do so and executing that plan.
One thing is certain: NGNs are on the rise because they offer healthcare providers the ability to reverse the trend of decreasing revenues and increasing costs as well as to remain competitive with other healthcare providers.