The Buy vs Build Dilemma of Digital Health
After reading this article, you will be able to define the key decision elements to determine the buy vs build decision for digital health projects.
SUMMARY:
The optimal selection approach varies by the health care organization.
The 3 major options are: Purchase a complete product; Configure an existing tool; or Build a tool internally.
An objective decision-making process can help.
Advantages and Disadvantages
Advantages and disadvantages of each option vary based on:
The type of problem the tool will address (a specific unique problem to a system vs universal problem)
Characteristics of the health care system
OPTION 3: HYBRID MODEL:
Co-development with private vendor
Purchase a foundational infrastructure and build proprietary analytics and workflows on top of it.
Digital tool can be tailored to meet system-specific needs
Easier adoption within the system
Licensing ability
Build vs Buy Decision Framework
Strategic Importance
What type of problem will the tool address (1 specific problem vs universal problem)?
How quickly does the tool need to scale and spread across the system?
Will the tool provide a core strategic differentiator?
Will it foster a culture of innovation?
Organizational Internal Capabilities:
Informatics expertise
Engineering resources
Data science talent
Product management skills
Regulatory expertise
Long-term maintenance (upgrades & user support) for 5-10 years
Financial Analysis for Total Cost of Ownership
Development costs
Integration costs
Cybersecurity
Clinical Validation
Regulatory requirements
Maintenance staff
Opportunity cost
Upgrades
Liability
Workflow Integration and User Adoption
Amount of workflow alterations required
Clinical acceptance
Training
Change management needs
CONCLUSIONS:
Although several considerations need to be made before a final decision, one important question remains:
If the capability is strategically unique with proprietary AI algorithms, differentiated workflows within a unique patient population AND the solution will improve outcomes to a degree to justify the workflow and resource investment – CONSIDER BUILDING
If the capability is largely already commoditized and not worth the workflow disruption required for adoption – CONSIDER BUYING