By Jim Gerrity, director of global industry marketing, Ciena
What has become an essential element in enabling optimal patient care? You may be surprised to learn it is the need to be connected. Without it, and a reliable Healthcare Information Technology (HIT) system, physicians are challenged to transmit massive imaging files across physician offices, meet compliance regulations, and other business related tasks. When it comes to patient care, connectivity is critical to ensure medical personnel have access to important data for split-second decision making.
To enable the high-performance, on-demand connectivity required to facilitate modern healthcare services, providers are upgrading their networks with carrier-grade packet-optical technology in one of two ways – they are either building their own network using dark fiber, or leasing a managed private network service from a service provider.
For healthcare providers there are key criteria that should be considered when evaluating the two main business models – build or buy – to ensure they align with a hospital’s strategic goals, network requirements, and anticipated growth projections.
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By Jim Gerrity, director of global industry marketing, Ciena
What has become an essential element in enabling optimal patient care? You may be surprised to learn it is the need to be connected. Without it, and a reliable Healthcare Information Technology (HIT) system, physicians are challenged to transmit massive imaging files across physician offices, meet compliance regulations, and other business related tasks. When it comes to patient care, connectivity is critical to ensure medical personnel have access to important data for split-second decision making.
To enable the high-performance, on-demand connectivity required to facilitate modern healthcare services, providers are upgrading their networks with carrier-grade packet-optical technology in one of two ways – they are either building their own network using dark fiber, or leasing a managed private network service from a service provider.
For healthcare providers there are key criteria that should be considered when evaluating the two main business models – build or buy – to ensure they align with a hospital’s strategic goals, network requirements, and anticipated growth projections.
Packet-optical networks in healthcare
Packet-optical network solutions are becoming the go-to solution for healthcare providers as they seek to address the need for dramatic and continued increases in bandwidth demands, the requirement for greater network security, and the desire to be ready to adapt rapidly to advances in eHealth initiatives and services. For example, according to Technavio, the healthcare world's adoption of bandwidth-intensive video communication is expected to rise at a rate of 18 percent per year from 2012 through 2016, approaching $2 billion in revenue.
While many look to optical networks to connect campus or metro facilities, others are adopting this technology to interconnect regional health information exchanges, support local or regional telehealth initiatives, and/or other clinical decision support services.
Build or buy – what’s best for you?
As discussed, there are two main business models that healthcare organizations can choose from to take advantage of packet-optical networks—a build-your-own network model based on dark fiber and the use of carrier-grade packet-optical technology, or a managed private network service that is outsourced to a service provider.
To decide which option to pursue, healthcare providers must carefully analyze the two deployment models against a well-defined list of requirements that can best address their institution’s long-term goals and needs. They also need to establish clear objectives for how to allocate operational and capital expenses (OPEX and CAPEX) for these initiatives going forward. Following, is a list of things to keep in mind:
- Time is of the essence. Patient demands are changing, and infrastructure must be able to adapt quickly to meet changing conditions. For those seeking to build, there are considerations that must be taken into account: How quickly can your internal IT resources ramp-up the required skill sets to manage a private packet-optical network? Do you have available shelves, ports, wavelengths or fiber to quickly add new capacity? If the answer to these questions is no, leveraging a managed service provider might be the appropriate alternative— just find out how quickly your managed service provider can adjust the Service Level Agreement (SLA) to accommodate change.
- Network agility is key to meeting future demands. The growing complexities and file sizes of Electronic Health Records (EHRs), Picture Archiving and Communication Systems (PACS), and other bandwidth-intensive applications are growing rapidly, accelerating the need for flexible, agile networks regardless of buying or building. Years down the road, we may be discussing a new range of applications making their way into the healthcare marketplace, and the network would need to scale to meet demands. Healthcare providers must be able to grow their bandwidth quickly when the time is right, and then be responsive to ensure the network is running 24/7.
- Plan for the data center of tomorrow. Today, more healthcare providers are transitioning from the traditional, stationary data center to a dynamic, multi-data center infrastructure that supports cloud services. If you have confidence in the long-term location of your data centers, implementing a private network might be your best option. If you have heavier reliance on multi-tenant data centers and cloud infrastructure, you’ll want a more flexible managed service network that you can quickly change as the data center market changes. Data center hosting services should provide high-availability, secure services while monitoring the integrity of your systems to alert you to potential problems before they occur. As an added advantage to your hospital IT outsourcing effort, an off-site data center allows your healthcare organization more room in your physical plant for additional beds or infrastructure expansion.
- Don’t get caught flat-footed. With all the meticulous compliance regulations that need to be met, does your IT department have the time and resources to deploy the latest feature functionality from vendors in their networks? Do they have the time and ability to use these internal resources for testing and deployment, first? If you run your own network, you may have spare ports or boards available that can be used for this purpose, while a managed service provider might require you to sign a whole new contract when it comes time to upgrade.
- Identify your risk tolerance. If you are on the verge of merging or adding additional services and/or offices, building your own network should appeal to you. First, identify your mission-critical applications, their required connectivity and their corresponding protocols, bandwidth, and latency requirements. Then, consider their redundancy and disaster recovery conditions. If your growth is uncertain, a managed service might be more appealing because it provides you with the flexibility to prevent lock-in with a specific vendor or solution, and its packet-optical infrastructure can evolve with your needs, avoiding technology obsolescence. Also, managed service contracts typically last one to five years, allowing a healthcare provider to change solutions based on new requirements.
- Understand the capabilities of your IT staff. As networks become increasingly complex, would you rather focus IT resources on meeting patient needs and compliance requirements, or developing IT skills sets to handle internal projects such as a private network? You must determine how much you want to invest in your IT staff. For a healthcare provider with sufficient resources, a build model will require IT skills that specifically target the needs of building and maintaining a core network Wide Area Network (WAN) infrastructure, while the buy model frees up resources since most infrastructure management is handled by the service provider.
- Future proof your network as much as possible. The infrastructure you chose today should meet your needs tomorrow. Packet-optical technology capabilities are accelerating at a rapid rate. While 10 Gigabit Ethernet (GbE) in the Local Area Network (LAN) is migrating into the WAN, core networking is moving to 100GbE. In five years, 400GbE may be the new WAN network currency as HD video, PACS, telesurgery and other “digital” forms of treatment catch on. A private network enables you to quickly implement the latest technology, while you might have to wait longer until a service provider adopts new technology for new services. Also, if doing it alone, you must take into account managing the evolution of Software-Defined Networking (SDN), a key element offering investment and flexibility protection.
- Be vigilant of security and compliance protocols. Security is paramount for any healthcare IT network, and a private network over a dedicated infrastructure may be the only solution to ensure the highest level of network security. For those that do not have the staff and resources available to focus on security, a managed service provider should be considered, preferably one that maintains an optical virtual private network (O-VPN model) to provide necessary customer segregation and security while delivering the attractive economics of a shared infrastructure. A third “hybrid” option exists in which the healthcare provider owns the equipment, while the fiber and the management are owned by the service provider.
- Conduct a full-scope financial analysis. Before making a build or buy decision, hospitals need to have a full understanding of their financial status. Are you projecting significant growth for the long term and have the cash for CAPEX? Do you have some uncertainty regarding your growth over time? Those in the first situation may lean towards a private network build, which could provide financial benefits over the long haul, but does necessitate having the expertise to manage the network. Those with CAPEX limitations might instead lease a network through a managed service provider and pay a regular monthly expense. Though this may cost more in the long run, there are significant savings in OPEX by outsourcing the management and skills to a service provider vs. taking it on in-house.
- Consider how much control you’ll need? Will your next-generation packet-optical WAN infrastructure give your IT managers essential management and control features that allow them to provision their own services and view statistics about network performance? If not, who will have access to these features? If you build your own network, you can purchase and develop features and capabilities as new technologies arise (which provides you with total control), but also requires a dedicated staff to handle the increased complexity of communications architectures. Managed service providers, on the other hand, rely on customer portals with graphical management interfaces that allow IT/data center managers to view SLA performance in real time and provision new services on their network quickly and conveniently – the downside is that you may not have the ability to influence how those decisions are carried out.
Implementation and beyond
As technology advances, it is crucial that HIT systems are nimble and flexible enough to properly adapt as new healthcare initiatives take hold. It is important to methodically consider the factors described above before deciding whether to build or buy. In some instances, this may not be an either/or decision as many healthcare institutions can have a combination of both models running concurrently. This analysis process is more to identify which approach best meets the business requirements for the current environment or project. As remote diagnostics, telesurgery and more advanced EHRs are more widely adopted, packet-optical network solutions will become a major asset to those healthcare providers that have realized the importance of having a scalable, high-performance network that provides low-latency, secure services.
About the author
Jim Gerrity is currently director, global industry marketing at Ciena Corporation. In this role, he is primarily focused on go-to-market strategy and field sales support for enterprise customers. Mr. Gerrity has over 25 years' experience in international and U.S. sales, business development, and marketing of storage and data communications networks to Global 1000 clients. Mr. Gerrity holds a B.A. in business management and marketing from Central Connecticut State University and has been published in multiple leading publications covering the enterprise storage networking industry.
