Understanding the cost of healthcare IT

There is sometimes a perception by healthcare technology users that virtual machines are free, and resources are unlimited. We, as healthcare IT professionals, have a responsibility to properly set expectations with our application and financial teams, and to show them the true costs of the projects they undertake to help healthcare providers.

Cost of the private cloud

A key component of understanding private cloud deployments is cost. Management consultant Peter Drucker stated, &#rsquo;What gets measured gets improved&#rdquo;. This is incredibly true when looking at the components of a private cloud infrastructure. Providing application and finance teams with raw output of utilization metrics gives a very limited value. Virtual CPU counts and memory utilization are meaningful only in the context of someone who works with the infrastructure.

Breaking down the costs by different applications or teams provides cost evaluation on the existing environment, but more importantly cost projections on future projects. Using the vRealize Business tool from VMware, the cost of a new or upgrade project can be calculated with a much greater degree of accuracy than previously. This becomes more important in healthcare IT environments with the number of vendor applications, many of which tie into the electronic medical records system. By providing the cost data in advance, project budgets can be determined at the beginning of the process, and vendor expectations can be projected.

Business management for the cloud

As healthcare applications evolve, where those workloads physically reside becomes less important. Application owners can request the required resources, and the infrastructure team can then use the vRealize Business Business Management report to determine the most cost effective placement for the workload.

Once workloads are placed, regardless of location, budgeting becomes important. Looking at costs over time, and comparing the cost of various internal or external infrastructure, allows teams to make better decisions on short and mid-term growth. Capital expenditures can be delayed based upon financial modeling.

Healthcare financial management for IT



Many healthcare financial teams dedicate a number of resources to tracking costs and budgets within IT. With the growing size of many health systems, managing these budgets centrally can become a monumental task. Rather than providing yet another application to the finance team, vRealize Business can provide the healthcare financial team a view into the same data, in a format they can readily consume. By using the same data, and feeding it into their existing systems, or better yet using the reports provided, finance and IT can work from the same numbers.

For long term budgeting, this is particularly important. By bringing in previous costs, and projecting new projects, IT and Finance can take a longer view of the actual costs of IT. Providing this cost back to individual application and patient care teams allows them to make more efficient choices with their allocated budgets, providing better outcomes to their constituents.

Cost modeling for the healthcare IT environment should not be an arduous task. It is often times the best way to help application teams set appropriate budget and expectations for their customers. By providing accurate and actionable financial data, healthcare IT can be an innovative partner in the patient care process.

The post Understanding the cost of healthcare IT appeared first on VMware for Healthcare IT.

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