Industry executives and experts share their predictions for 2025.  Read them in this 17th annual VMblog.com series exclusive.

By Brian Liddell, CFO at Harmony Healthcare IT

The healthcare industry is evolving rapidly, with the integration of advanced technologies and the data. This digital shift has brought modern electronic health records (EHRs) and interoperability to the forefront, but with that comes a need for efficient legacy data management. 

Because healthcare organizations generate an overwhelming amount of structured and unstructured data, from patient records to billing information and clinical notes, including data archiving in your 2025 budget should be a strong consideration that can reduce IT costs, improve security and compliance, and increase operational efficiency.  

Accumulation of healthcare data, and the applications that generate and store it, for many organizations is becoming unmanageable. EHR changes, mergers, acquisitions, and departmental needs can contribute to the complexity, leading to multiple legacy applications operating along with the chosen go-forward software.

Neglecting the decommissioning of these old applications results in inflated IT costs, as legacy systems require ongoing maintenance and resources that divert funds from innovation. Up to 64 percent of healthcare IT budgets can be allocated to managing and maintaining legacy systems. Most of the cost is allocated to trying to keep the systems operational. Efficient data archiving can decommission these systems and transition critical historical data to secure, accessible active archives.

The Growing Need for Decommissioning Legacy Applications

Healthcare organizations are increasingly replacing applications like EHRs as they adopt newer platforms or undergo mergers and acquisitions. Legacy systems, which often still contain vital patient information, become costly to maintain. Archiving data from these systems ensures healthcare providers retain access to essential historical records without the financial and operational burden of running redundant systems.

Decommissioning old applications is an essential part of a sound data management strategies. For CIOs, this approach not only reduces costs but also boosts security and accessibility of that critical data.

One hospital in New Mexico serves as a compelling example of the impact of effective data archiving. As a 49-bed hospital serving rural communities, the organization aimed to consolidate its EHR platforms to enhance patient care and streamline operations. During the process, they discovered significant amounts of data residing in overlooked legacy systems.

By conducting a data audit and collaborating with system users, the hospital identified and archived this data, reducing annual maintenance costs from six figures to just $30,000. With multiple systems decommissioned, the hospital's IT team was able to focus on managing one consolidated go-forward EHR, which increased efficiency and improved staff productivity.

This case highlights the real-world benefits of investing in data archiving. For many healthcare organizations, return on investment (ROI) from such initiatives is often realized within 12 to 24 months.

Cost Savings and ROI of Data Archiving

The savings from data archiving generally fall into two categories: hard cost savings and soft cost savings. 

Hard cost savings include reducing or eliminating maintenance fees for outdated applications, support costs for obsolete software, and infrastructure expenses. For example, decommissioning old servers not only cuts down on hardware costs but also reduces energy consumption.

Soft cost savings focus on the efficiency gains across the organization. The IT department no longer needs to juggle reductant legacy systems, allowing them to work on strategic initiatives. Clinical and administrative staff also benefit from faster data access through easy to access central archives, enhancing patient care and reducing workflow disruptions.

According to a survey of healthcare CIOs, 55% of respondents identified cost as a primary driver for their data management strategies, while 58% reported significant cost savings after decommissioning legacy systems. This reinforces the importance of factoring data archiving into your 2025 budget.

Security is a Top Priority

Security is another critical reason to prioritize data archiving in healthcare. Legacy applications are a prime target for cyberattacks, and every live application provides another opening for attackers. By securely archiving both structured and unstructured data, healthcare organizations can better defend against breaches, ensuring that data is consolidated and stored in a central, protected environment. A proper active archive with a user interface that enables quick and compliant retrieval of information when needed, without exposing the data to unnecessary risks, helps maintain the integrity and confidentiality of patient records.

Building a Strong Data Governance Framework

Before embarking on a data archiving initiative, healthcare organizations must establish a strong data governance framework. This can be done by conducting a thorough application inventory and understanding what data exists, where it's located, and how much of it needs to be retained. You should also recognize issues by understanding legacy systems are draining resources and identifying the potential gains from decommissioning them. All of this information will also be helpful in informing a budget for archiving.

A Strategic Investment for 2025 and Beyond

As healthcare organizations continue to evolve, data archiving will become an increasingly critical part of streamlining their operations. By including data archiving in your 2025 budget, you can significantly reduce IT costs and increase security. Healthcare providers who invest early in data archiving will be better positioned for the future to manage the increased volume of health data that is only going to get more complicated. 

##

ABOUT THE AUTHOR

Brian Liddell is a Senior Partner with Harmony Healthcare IT, serving as Chief Financial Officer. He has over 23 years of information technology work experience since graduating from the Indiana University Kelley School of Business in 2001. Assisting with the formation of Harmony Healthcare IT, Brian has gained healthcare domain expertise in revenue cycle management, practice management systems, electronic health records, analytics tools, and data extraction/migration/retention. Brian is an integral part of the management team with core competencies in finance, budgeting, forecasting, expense control, risk mitigation, human resources, commercial property management and real estate. He manages partner relationships, review of legal agreements, contract negotiations, and financial modeling. Brian also contributes to business planning and strategy development.