Get new exclusive access to healthcare business reports & breaking news
According to recent estimates by the Office of the Actuary at the Center for Medicare and Medicaid Services (CMS), US health spending is estimated to grow at an average rate of 5.5% annually from 2017-2026, accounting for nearly one-fifth of our GDP. An aging population, increased prevalence of chronic disease, and changes in healthcare legislation are among the factors contributing to the strong growth of the health sector.
Under the Affordable Care Act, 10 million newly insured Americans are now eligible to receive care. Moreover, the shift in healthcare from a fee-for-service model to a value-based one, coupled with digitally savvy consumers demanding a more Amazon-esque patient experience, is fueling the rise in healthcare spending.
Taken together, these changes, along with the rise of emerging technologies, present the perfect opportunity for the digital transformation of the healthcare industry.
A study of 400 C-level global healthcare executives conducted by the SAP Center for Business Insight and Oxford Economics indicated that the vast majority believe that digital transformation is key to survival. Indeed, given the year-over-year growth estimates of national health spending, digital innovation has become a necessity.
Make no mistake: failing to innovate in the booming healthcare economy will be the equivalent of leaving billions of dollars on the table. To prepare your healthcare enterprise for a successful digital transformation, consider these steps.
Set the tone for your successful digital transformation by emulating the characteristics shared by the most successful, digitally mature organizations.
A successful digital transformation involves more than simply deploying the latest and shiniest gadget. Instilling a digital culture should be first and foremost on your list, setting behavioral guidelines for individuals to advance a company’s overall goals and strategy.
According to a 2015 global survey of managers and executives by MIT Sloan Management Review and Deloitte, nearly 90% of respondents anticipate that their industries will be disrupted by digital innovation, but only 44% say their organizations are prepared for it.
What’s separating the digitally prepared organizations from the rest? The willingness to take risks, experiment, and invest heavily in upskilling talent are trademarks of digitally mature organizations across industries.
To bolster the case for fostering a digital culture, consider the findings of a study done by The Boston Consulting Group (BCG). They analyzed 40 digital transformations and found that of the winning organizations, 90% focused on culture.
Another powerful incentive for fostering a digital culture comes from the same BCG study, which found that nearly 8 out of 10 organizations that focused on culture sustained breakthrough performances over a 10 year period, but not a single organization that failed to embrace digital culture achieved such performance.
Bottomline: Simply put, your digital transformation is more likely to be successful if embracing digital culture becomes a cornerstone of your organization.
Emerging healthcare technologies will be powered by the seamless communication of data through multiple apps, networks, and computer systems.
About one-third of the world’s data is generated from the healthcare industry. Healthcare is subject to stringent regulations and as a result, health data is often siloed, rendering it nearly useless. According to McKinsey, if US healthcare can effectively use big data to drive efficiencies and quality, the sector would create more than $300 billion in value each year. However, access to data remains one of the biggest challenges to advancing data analysis.
The patient’s journey consists of many touch points including, but not limited to: primary care physicians, specialists, laboratories, clinics, and hospitals. In order to deliver a positive patient experience, real-time data must be transmitted through the networks of these vital sources.
This is why interoperability is crucial. It allows for patient data to be exchanged and communicated through multiple apps, networks, and computer systems.
The findings from IDG’s 2018 State of Digital Business Transformation White Paper indicate that artificial intelligence (AI), machine learning, and Internet of Things (IoT) are among the top 3 technologies being researched by enterprises today. In fact, 87% of healthcare organizations will adopt IoT technologies by 2019 and 90% of hospitals will be AI-driven by 2025.
Costs can be reduced by increasing value to the patient and using healthcare analytics to provide significant cost savings. Reduced costs and providing value-based care is a win-win for both patients and providers. Of course, all of this is powered by the seamless exchange of data.
Bottomline: The digitization of the healthcare industry is long overdue. Short of fostering a digital culture, laying down modern data infrastructure to allow interoperability is paramount—especially in healthcare. It is essential to drive operational efficiencies through the coordinated and timely delivery of information.
Consider infrastructure and interoperability the foundation on which your healthcare digital transformation will be built.
Securing valuable data should never be an afterthought.
A recent study by IBM and Ponemon found that the chances of experiencing a security breach in 2017 were as high as 1 in 4, making security breaches no longer a question of if but when.
The 2017 Cost of Data Breach Study shows that, for the seventh year in a row, healthcare data breaches are the most expensive by industry, with each breach costing healthcare organizations 2.5 times more than the global average across other industries.
Causes of security breaches can range from email leaks to cyber attacks, with the latter being a very lucrative business. A patient’s medical information is worth 10 times more than their credit card number on the black market.
Fortunately, there are strategies to stay in compliance with data regulation laws. Encrypting data, securing email servers, and leveraging digital learning tools to detect abnormal user behaviors are all ways to ensure data security. Another proactive approach is to consistently conduct testing to find security gaps before it’s too late.
Bottomline: With the rise of cloud computing, applications, and IoT innovation comes the frequent exchange of data between these devices—and an increased number of devices in the ecosystem means increased risk.
Reduce costs and increase your bottomline by delivering value to patients and staff.
Your digital strategy should be examined through the lens of the patient experience. Advances in mobile technologies have fueled patient demand for highly personalized experiences. The overall findings of a survey of 1,000 patients by NTT DATA indicate the need for technology to simplify the patient healthcare experience.
The rise of highly engaging, digital experiences from retail sites and the shift towards patients paying for their care out of pocket is fueling the digital transformation of healthcare. In fact, half of the patients surveyed by NTT DATA indicated that they would leave their current care provider for a better digital experience. Digital health tools that drive personalization and efficiency will become a major battleground for healthcare providers.
Which brings us to AI.
Presently, half of US hospital executives are investing in AI innovation to help them achieve significant cost savings. And while there are many heroic applications of AI, there is an immediate problem it can address: administrative overload. $91 billion goes to waste each year in healthcare as the result of inefficient administration.
Doctors are plagued with an outrageous number of faxes each day (think about that for a minute: healthcare, a trillion dollar industry, still relies on fax machines). The time it takes to transcribe fax data correctly is time that could be spent with patients.
And patients don’t have it any easier, trying to get their medical records from one provider to the next without jumping through hoops.
While AI has tremendous potential to disrupt healthcare, from diagnosing to treating disease, for most healthcare providers, leveraging AI in small ways, such as enabling staff to work smarter, is a more achievable first step to digital transformation that can yield significant ROI.
For example, AI is already paying dividends by optimizing the supply chain, expanding self-service, and automating financial processes. By supporting staff in their day to day work, healthcare providers can achieve measurable success.
Bottomline: Use technology to put patients and staff first. This will not only give your hospital the opportunity to increase efficiency and realize significant cost savings, it has the potential to transform the experience of everyone visiting your organization.
The continuous growth of the healthcare industry means that healthcare enterprises will need to disrupt themselves in order to compete. Let’s recap what we learned:
While the journey to digital transformation may be challenging, it isn’t impossible. Remember that digital transformation starts from within. Start your journey off right by lining up people, processes, and technologies.