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Health care data centers increase reliance on specialized outsourcing

Data center managers are turning to outsourcing firms that specialize in their markets. Jim Giordan, the CEO of a healthcare IT outsourcing company, explains why.

Troy Mich.-based CareTech Solutions Inc. has been in the business of outsourcing health care data centers for just over six years. The company manages IT for 28 hospitals, ranging from large Integrated Delivery Networks (IDNs) to small rural critical access hospitals. In this interview, CareTech CEO Jim Giordano explains why he believes specialized data center outsourcing is the wave of the future.

In what ways have new technologies affected health care?

Jim Giordano: From a patient perspective, technologies have brought in capabilities to make sure that health care is safer. Our customers have the advantage of [adverse] drug interactions and dosage measurement mistakes being caught.

In radiology, we support digital radiology called PACS [picture archiving and communication systems]. Around 80% of the hospitals in the U.S. are heading in that direction; these images ride over the network.

Are the building blocks of your infrastructure in place to handle that increased traffic from PACS? The analogy is having a freeway with two lanes when you need six lanes. One of the things we do is evaluate the infrastructure and ensure that the network is substantial enough to support emerging technologies, which are vastly different from even two years ago.

Why does it make sense to outsource in this market?

Giordano: Because we can make better health care systems and we can prove it. We study the technical landscape and bring customized solutions. We're able to leverage economies of scale for midsized hospitals that might not otherwise be able to do for themselves. We're able to bring in knowledge and expertise to leverage buying power to improve the price point.

We leverage our size to get very attractive discounts for even our smallest hospitals. We're able to use the size of CareTech to help them purchase assets at a reasonable price. Typically, the customer will title the asset in their name, most of them want to do that. In a few instances they've asked us to hold title and we're willing to do that as well.

But it's the knowledge of what system to buy that really helps the health care system.

Are there certain vendors you prefer across your systems?

Giordano: We say that we're vendor neutral. We have some 'very good' vendors, but we'll support whatever solves best our needs.

Have you noticed a trend in vertically focused IT outsourcing?

Giordano: I think the effective firms are doing that, mostly because the customer base is demanding it. Where we have the advantage over the larger firms is that we're not just a division of a firm doing health care. Health care is what we do. We're seeing a proliferation in our health care base looking for experts. With capital dollars and resources being scarce, expertise is more important than ever. We're seeing a more focused market.

We look people who want to serve this market, people with the vision that technology is going to help reform healthcare, a very troubled industry in this country.
Jim Giordano
CEOCareTech

Do your customers have IT competent people managing your relationship?

Giordano: Typically, we outsource the entire IT function and report to the chief medical officer or chief financial officer. That allows technology to drive the hospital's business objectives. It's not technology for technology's sake. We're applying technology to accomplish health care objectives.

How many people do you assign to manage an average data center?

Giordano: It's broader than the data center. It's support of the applications, telephony and more. It depends on the complexity and size of the health care system, we'll have anywhere from 200 to 12 people [to manage IT functions].

Do you build out your own data centers, or is that something you hire contractors and engineers to do?

Giordano: The typical brick-and-mortar expansion, of course, we hire contractors. Our people run the computers, so we manage the day-to-day operations. The construction contractor varies by hospital, for example, it's a different contractor for our hospital in Ohio than it would be in Colorado.

Who manages cooling in your server rooms?

Giordano: We don't install or sell air conditioning or cooling systems. We purchase those from various vendors.

The good news is that computers are running a bit cooler than from the old days. There aren't any water-cooled computers anymore, thank God.

Maintaining cooling in the computer room has become easier. We have monitoring tools that visually monitor the data center through the Web. It measures the temperature, so if there is a temperature spike, we're notified. It measures humidity.

And, of course, from a security perspective, all of our computer rooms are secured with electronic access so we know who's going in and out.

Is this monitoring system you set up on your own, or is it vendor supplied?

Giordano: We set it up ourselves and use a couple vendors. If it's just a room with a few servers or a full blown data center, all of the rooms are monitored from an environmental and intrusion perspective, with alerts going out whenever there is a breach. That technology has come a long way.

The other thing we're able to do from a perspective like that is monitor the infrastructure physically through remote agents on the computers. We know if a switch is down in a closet someplace. We've got a device to automatically send a ticket to a technician to service it.

We also monitor applications. Let's say a server has reached the 90th percentile of its memory. An alert goes out that one of the servers has hit against a parameter; the objective is to fix it before the application is impacted.

So we're seeing uptimes -- that have heretofore been unachievable -- through monitoring tools.

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Do you offer business continuity services?

Giordano: Yes, many of our clients are running out of our data center and have moved their hardware to our data center because it has redundant power, is monitored and has backup storage off site. We also work with our clients on business recovery plans.

What impact has the Health Insurance Portability and Accountability Act had on your business?

Giordano: The software has been HIPAA compliant for some time. The provision itself for securing data hasn't required a tremendous amount of change from our perspective. We've always separated and isolated the customer's data to make sure it's secure. That's been around for a while.

HIPAA has pervaded IT from a security perspective. And there has been compliance with the mandates to make sure the information is protected, but most of it has been taken care of by the software manufacturers themselves, not necessarily from what we do.

Your employees work alongside hospital employees. How do you select your IT employees, specifically to match a health care culture?

Giordano: One of the things we look for is people who want to serve this market, people with the vision that technology is going to help reform health care, a very troubled industry in this country. We look for people who understand that their serving not only a direct customer [the provider], but also the patient. We're trying to make a better experience for the health care consumer. We look for people who have a people orientation and like the fact that technology is going to be applied to help solve a national problem.

Let us know what you think about the story; e-mail: Matt Stansberry, News Editor

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