In the healthcare technology sector, the traditional “build versus buy” debate is evolving into something more nuanced and sophisticated. According to recent Gartner research, modern application portfolios are increasingly becoming an intentional combination of different application development and delivery methods. This shift isn’t just theoretical—it’s reshaping how healthcare technology companies approach critical systems like Master Data Management (MDM).
The Evolution from Binary Choices to Blended Approaches
For decades, healthcare IT leaders have framed their application strategy decisions as a binary choice: either build custom solutions in-house or purchase commercial off-the-shelf (COTS) software. However, a Gartner report “Build vs. Buy Strategy: Top Principles for Enterprise Applications” introduces a more holistic framework that better reflects today’s complex technology landscape: the Buy, Build, and Blend model.
According to the analyst research, nearly 60% of application investments go to COTS solutions, but that doesn’t tell the complete story. Modern enterprise applications are rarely purely bought or built — they exist on a continuum where integration and customization play pivotal roles.
Understanding the Buy, Build, and Blend Framework
Gartner’s model recommends a sequential approach to application strategy:
- Buy what you can: Start with purchasing COTS applications for core business capabilities that don’t offer significant competitive differentiation or that need standardization across business units.
- Build what you must: Custom development becomes necessary for innovation, unique business capabilities, or rapidly filling capability gaps.
- Blend both: Integration is imperative for delivering seamless user experiences and connected processes.
As Todd Cozzens, former CEO of Accountable Care Solutions at Optum explains, “Healthcare organizations are realizing they can’t build everything, nor can they buy solutions that perfectly address their unique needs out of the box. The magic happens in thoughtful integration and targeted customization.”
The MDM and EMPI Challenge in Healthcare
For healthcare technology companies, Master Data Management (MDM) and Enterprise Master Person Index (EMPI) capabilities present particular challenges that illuminate the value of the blended approach. Accurately identifying patients, members, consumers, and even clinicians is a complex undertaking with serious implications for care quality, operational efficiency, and compliance.
Consider the case of implementing Verato, a leading healthcare identity resolution platform, within your technology stack. The Buy, Build, and Blend framework provides valuable guidance:
Buy: Core MDM and EMPI Identity Resolution Capabilities
Verato offers sophisticated identity matching algorithms that are pre-tuned and work out-of-the-box, powered by our patented approach to referential matching that achieves 24% matching uplift over even the most advanced probabilistic algorithms, and even greater uplift over rudimentary deterministic algorithms that organizations often find themselves building. Verato’s algorithms are specifically designed for healthcare data, have been tuned to a nationwide dataset, and are proven across the largest health systems, payers, and technology companies in the US. These core capabilities represent the “buy” component — specialized functionality that would require significant expertise and resources to build from scratch.
Verato also includes out-of-the-box data models, out-of-the-box “golden record” capabilities, out-of-the-box data enrichment, and out-of-the-box stewardship workflows and interfaces, making it easy to extend the core identity resolution functionality to include additional EMPI and MDM capabilities for your needs.
Build: Organization-Specific Integrations and Workflows
While the core identity resolution capabilities come from the purchased solution, every healthcare organization has unique workflows, data sources, and business rules. This is where the “build” component comes into play — developing integrations that incorporate the identity resolution and enrichment decisions from the MDM or EMPI in your specific workflows and analytical environments. For example:
- Extending the data model with zero-code extensibility to incorporate and building “golden views” of additional attributes, beyond those that are automatically modeled out-of-the-box
- Synchronizing each “golden view” into your analytics environments, either using modern publish/subscribe architectures, or leveraging pre-built apps and accelerators for platforms like Snowflake, Databricks, Salesforce, AWS, GCP, etc.
- Incorporating business rules to ensure the right data is delivered into the right operational workflows
Blend: Packaged Solutions and Insights
The real power emerges in the “blend” phase, where you can incorporate the core MDM and EMPI insights with the components of the stack you’ve built to create a “1+1=3″ solution that delivers value to the market. That might mean utilizing the Enterprise ID from your EMPI/MDM to unify patient data before building your own custom analytic models on top of that data. Or it might mean powering revenue cycle workflows utilizing the “golden view” of a patient’s data from the EMPI/MDM.
Practical Application for Healthcare Technology Companies
Focusing on your organization’s core competencies when rapidly trying to grow is critical for healthcare technology companies. When applying the Buy, Build, and Blend framework to your growth strategy implementation, consider the following steps:
- Identify your undifferentiated vs. differentiated processes: Core infrastructure may be undifferentiated, while accurate out-of-the-box identity resolution and enrichment can help significantly differentiate your platform from your peers and competitors, especially if that means more accurate analytics or better engagement.
- Create a clear policy statement: Develop and communicate a simple policy that guides your organization’s approach to EMPI and MDM implementation to ensure this critical foundation is solid.
- Align on integration architecture: Ensure your architecture supports seamless data flows between those technologies you buy and other critical systems.
Conclusion
The reality of modern enterprise applications, particularly in healthcare technology, transcends the simplistic build-or-buy dichotomy. Gartner’s Buy, Build, and Blend framework provides a more nuanced and effective approach to application strategy.
For healthcare technology companies managing multiple disparate data sources with patient, provider, or organization data, implementing MDM and EMPI solutions like Verato with a blended approach offers the best of both worlds: the specialized expertise and established reliability of commercial software, combined with the flexibility and competitive differentiation that comes from thoughtful customization and integration.
As Marco Argenti, CIO of Goldman Sachs, advises: “Don’t build anything unless you have to. Don’t think that just because you’re a smart person that you can build software better than anybody else.”
In the complex world of healthcare identity management, this balanced approach isn’t just a theoretical framework — it’s a practical necessity for organizations seeking to deliver high-quality care while managing costs and complexity.
