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Nathan Golia
Nathan Golia
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What Two Doctors' Offices Can Tell Us About The Motivation to Innovate

Identifying the time to make innovative, forward-looking changes to IT infrastructure before the opportunity passes will help leading insurers differentiate themselves.

Today, as I sat in an exam room waiting for my doctor to come in, something seemed out of place, but I couldn't put my finger on it. Then it occurred to me: The exam room had two huge filing cabinets, and on top of those cabinets were more files in boxes.

Why did this seem out of place? Because in my son's pediatrician's office, there are no filing cabinets (and with an 18-month-old, I've been to that office a lot more than my own recently.) In fact, at the pediatrician, each exam room has a PC that is hooked up to the practice's electronic health record system.

(A note to my life and P&C readers — don't stop here. This isn't about health insurance.)

My doctor does a fine job. I like him and his staff. But it is amazing to me that they are still such a paper-centric organization. After all, unlike many New York-area physicians, I rarely experience long wait times or see disgruntled crowds in the waiting room when I'm there. He should have the time to modernize their office and incorporate EHRs while reducing the massive paper load. But they haven't. On the other hand, my pediatrician's office is often full of ill children and their parents, and a routine visit can take three hours or more. I don't know when they had the time to implement their EHRs. But they did it.

I got to thinking about the time commitment for innovative products. At my doctor's office, even though they might have the time and bandwidth to implement EHRs, they might not see the need. After all, they've got a system, and it works. Meanwhile, at the pediatrician, I'm sure there was a painful transition period to the EHR system. But, it's paid off in reducing the clutter of an already very cluttered office.

My colleague Melanie Rodier at Wall Street & Technology cites research in an article that for some financial institutions, 90% of their IT budget is spent on maintaining legacy systems. Further, she notes:

Older systems are often business critical, dependent upon other elements of a bank's IT infrastructure and frequently kept running 24 hours a day. These legacy systems are costly too. Businesses have $500 billion tied up in maintaining a backlog of old applications, a 2010 Gartner report contends. Adding, removing or modifying these entrenched systems can cause one big migraine for firms. Changes can cost millions of dollars and impact many aspects of a bank's processes.

The irony that drives this situation is that given all that, a bank or financial institution running smoothly might not see the need to make a wholesale replacement to its core systems. After all, they have a system and it works. But if business picks up, or budgets get cut, it's safe to say that they'll wish they spent the easy times making critical upgrades. This is the strategy CIO Graeme Boddy took at Builders Mutual: , he talked about how important it was to invest in the company's IT systems while the economy was slow.

IT organizations that can identify the best times to make innovative changes are going to be leaders in a rapidly evolving technological landscape — after all, as Frank Petersmark of X By 2 has written for our site, it's easy to get caught up in attempting to tack on the latest and greatest technologies to your systems. Strong leadership, Petersmark says, is going to be important in identifying where — and when — to make moves.

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio

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KBurger
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KBurger,
User Rank: Author
1/10/2013 | 7:02:24 PM
re: What Two Doctors' Offices Can Tell Us About The Motivation to Innovate
Interesting insights here. I think you are right that so much depends on analyzing short-term/long-term costs/risks and benefits.
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