Understanding the Financial Implications of Legacy Data

July 20th, 2021 by Jim Yuhas, Chief Financial Officer at Legacy Data Access

The Real Cost of Ignoring Legacy Data Stuck on a Long-forgotten Server

Storing legacy health data, in theory, isn’t so different from renting a self-storage unit to stash collectibles or old family furniture. So long as one keeps up with monthly fees, there’s no need to worry about the stuff.

IT departments at hospitals and health systems, likewise, store droves of legacy data from long-retired EHR systems, billing systems and services that no one wants to think about on a day-to-day basis. They also pay monthly fees, though they’re a bit higher.

And like people who stash their valuables into self-storage units, IT departments are aware they’ll possibly need to access the old stuff one day. Only they don’t know when or why.

But unlike self-storage solutions, many of the hospitals’ stored data costs are hidden – and unaccounted for. By choosing to fork over monthly maintenance fees to keep data embedded in antiquated servers, EHRs, and computing systems afloat, healthcare organizations are missing huge opportunities to save a fortune, while minimizing risks.

With profit margins slimmer in 2021 for many healthcare systems in the wake of the coronavirus pandemic, the true cost of maintaining legacy data warrants immediate attention.

Breaking Down the Numbers

The problem isn’t that organizations and IT leaders don’t care about their data. It’s just that with competing priorities for their time, the cost of ongoing maintenance fees isn’t high enough to sound an alarm. It’s also easy to rationalize paying these costs every month when archiving and organizing data seems like a cumbersome undertaking.

There’s a saying that “you don’t know what you don’t know.” IT departments are paying attention to the obvious costs they see on invoices, but not considering other costs when it comes to managing, or maintaining, legacy data.

One hospital system, for example, saved more than $850,000 per year simply by decommissioning its mainframe server. A separate health system I know of saved $45,000 per month by working with a third-party legacy data partner to migrate data from five legacy EHR clinical applications to a streamlined, cloud-based storage solution.

Cost savings are derived from several areas, many of which IT departments may not consider. These can include. 

  • Contractor/internal salary fees: It can take a dedicated IT professional several hours to several days to retrieve protected health information (PHI) from a legacy server with updated software, and can take three times as long to retrieve data if the software is outdated. With IT professionals’ hourly rates hovering around $100, this can add up. The average IT staffer makes $70,000 to $80,000 per year (plus benefits), and a hospital will need to employ more of these professionals to deal with their data (or outsource more hours to contractors).
  • Software licensing fees: These range from several hundred dollars to several thousand dollars per year for one or more clinical applications on an EHR, for example.
  • Legal expenses: If a lawyer subpoenas data from a hospital’s legacy server, and the data can’t be retrieved in a readable format, the hospital will be responsible for paying any settlement fees that result from an inability to produce data.
  • Regulatory fees: These include nominal charges, as well HIPAA security breach fines, up to $250,000 per year for “willful neglect.” And that’s just the civil charges.
  • Utilities (Electrical/air conditioning): It takes a lot of energy to maintain on-premises equipment, even if it resides in a small, dedicated space.

None of these potential expenses includes the unquantifiable cost of data-storage anxieties.

A more cost-effective approach

Seeking a data access solution should be a top priority in 2021, as the number of data hospitals responsible for continues to mount: Researchers estimated in 2019 that as much as 30% of the entire world’s stored data is health-related. This number, by all accounts, is poised to grow.

Of course, every hospital’s needs are different, so IT leaders should approach the problem by considering their most pressing ones first (e.g., the management of clinical data on that resides multiple EHRs). In this scenario, an organization should prioritize a solution that can yank all data from disparate systems and put it into one place.

Healthcare organizations should also consider their future needs. How often do they need to access legacy data? Will that change over time? What is the budget for maintaining legacy technology systems? And finally, how much could an organization realistically save (when considering all costs, including hidden costs) by opting for a better legacy data storage solution?

Having the right legacy data vendor partner can simplify the process of data storage by handling all aspects of archival: extraction, backup, access, reporting, migration, streamlining, and active archiving. That partner is experienced in archiving and puts speed and user experience (or access first). In doing so the partner helps to lower the risks associated with legacy data and the costs of maintaining it, rather than encumber health IT teams with more to worry about.

Of course, healthcare systems that are reeling from 2020s lost revenues might understandably cringe at the idea of adopting any new approach or implementing a smarter, more manageable data storage solution. There’s always the fear of throwing money at a solution that won’t deliver on its promise of streamlining operations or saving money.

But like the self-storage space user who mainly wants peace of mind, healthcare leaders will be amazed at how much less stress they feel around their legacy data when it’s properly stored away until it’s needed.     

 

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