CIOs See Benefits in Partner Deals with Vendors

Some CIOs are getting custom software at rock-bottom prices by going into business with their vendors. (

"We serve the sickest of the sick," says Doug Bach, CIO of Colorado access, a Medicaid and Medicare HMO based in Denver. And of its 120,000 members, a mere 3 percent account for nearly half of Colorado Accesss costs. This means that the sooner the HMO identifies its neediest patients, and steers them into its intensive care management programs, the more it cuts treatment costs down the road.

Thus the partnership Colorado Access forged last year with Thomson Medstat, which provides custom medical-decision-support applications to help integrate pharmacy and lab data—results from patient cholesterol screenings, blood tests, etc.—into the Medstat data warehouse of claims and treatment information.

Now Colorado Access is successfully using that clinical data to find early indicators of diabetes among its members, and its getting those patients into early-treatment programs.

Theres plenty of evidence that its intensive-care management programs are working: Tracking a specific group of high-risk members receiving the services last year, Colorado Access found they are saving more than $400 per member per month.

The best part is that Colorado Access paid nothing for the custom-developed software.

Aside from participating in weekly meetings with Medstat developers, the HMOs primary contribution was working with its third-party labs to get the data into consistent and usable formats, something it would have had to do anyway.

This was the second project the nonprofit has worked on with Ann Arbor, Mich.-based Medstat to help develop a custom application, making Bach a two-time member of a quietly growing club: CIOs forging partnerships with their software vendors to help cut the cost of, or speed access to, custom software.

Though such partnerships may not show up in IT industry research, analysts and anecdotal observations suggest they are on the rise.

They are particularly prevalent in certain vertical markets—financial services, healthcare and law—where CIOs can parlay their companys industry expertise and reputation into big savings, more influence and support and, in some cases, royalty revenue when the vendor resells the application.

The vendor, in turn, gets to go to school on the customer, developing experience and a marketing portfolio for use in future sales efforts.

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