The Main Event: Best-of-Breed vs. Single-Source.(health care industry software purchasing)

Question: Which is the better software purchasing strategy, single-source or best-of-breed? Answer: Yes.

That answer becomes more clear when provider and payer organization decision makers list the mitigating factors that come into play when they buy software. And though few CIOs have a formal policy in place, most have an informal plan.

Some large provider organizations have the financial and information technology staff resources to pursue the best-of-breed strategy. Using this approach, they choose what they conclude is the best software available for every department or task and buy from various vendors with little regard to integration issues (see September 2002 issue, page 34).

Larger payer organizations historically have customized much of their core information system software, thus pursuing a separate, homegrown strategy. This approach might be changing, however, as software choices improve.

Smaller provider and payer organizations often rely on a single vendor as the source of most of their software.

This is due largely to limited dollars for purchasing applications and maintaining sizable I.T. departments (see August 2002 issue, page 32).

Health care organizations' approaches to software purchasing can range from pure single-source or best-of-breed to variations of each. Rather than one or the other, an organization might choose hybrid strategies that draw from both options. Or they might develop another strategy, such as a "best of suite" variation in which an organization buys a range of applications from a vendor specializing in administrative or clinical applications (see story, page 44).

Examples of software purchasing strategies include:

* Single-source. For small to mid-size community hospitals, managing a best-of-breed environment is cost prohibitive, says Philip Ortolani, vice president of operations at Mid Coast Hospital in Brunswick, Maine. When the 102-bed facility formed a strategic plan more than 10 years ago, its goal was to partner with a vendor who would give a "small but busy hospital" a single-source option.

Much of the best-of-breed software a decade ago was designed and priced for the largest institutions, Ortolani says. Not only was the software often beyond its price range, Mid Coast Hospital couldn't afford to build an I.T. staff with the experience and expertise required to maintain multiple applications and create interfaces so disparate systems could talk to each other.

"We looked for a vendor that would provide us with an integrated system," Ortolani explains, "so we wouldn't have to worry about maintaining system uptime. …