The industry revolution taking place in healthcare: from tech to business

“The reality can’t be overemphasized: digital transformation is affecting the healthcare industry at a rapid pace. From the internet connection in the hospital room to the sheer number of medical devices touching the network, CIOs and IT departments must act now to keep pace with the rate of change within healthcare institutes globally.”

A great sea change is taking place within healthcare. We believe, Gartner takes a deep dive into healthcare industry trends and factors for change in order to identify priorities for decision-makers, and how these priorities must influence IT planning for the year. In their report, “Business Drivers of Technology Decisions for Healthcare Providers, 2019,” Gartner boiled down the important findings of their research efforts.

• “Industry newcomers, well-funded startups, nonhealthcare companies and digital giants are disrupting the established order with promises to transform healthcare.
• The volatile political, legislative, regulatory and competitive landscape challenges require healthcare delivery organizations (HDOs) to develop agile and adaptable business and IT strategies.
• The adoption of value-based care (VBC) payment models continues to progress, albeit slowly, while reshaping healthcare delivery organization priorities and approaches to sustaining viability.
• Advanced analytics is finally being recognized as a game-changing technology for healthcare provider organizations.”             

Healthcare business drivers

A number of major forces are driving healthcare provider business leaders to change their business strategy and information technology decisions. According to extensive Gartner research, there are six primary business drivers affecting healthcare leaders’ decision making. Here are the three.

1. Power Shifting to the Consumer.

This is not necessarily a new paradigm, but it’s a pervasive one. Increasingly, customers wield the wherewithal to shape their healthcare experiences through technological and structural changes.

According to the report, “For example, we are seeing the rise of consumer-directed healthcare, including CDEx — consumer-directed exchange (and data aggregation). Healthcare providers must be experts in understanding patients’ preferences and perceptions of value. CIOs must identify the business and IT implications of these expressions of consumer/patient empowerment and lead digital efforts to improve engagement”.

2. Medical Innovations in Therapy, Diagnosis and Care Delivery.

The healthcare industry is starting to test compensating medical care based on other factors as a result of digitalization. The structure of the way patient care is given, measured and reimbursed is changing. With this comes considerable disruption for the majority of HDOs. For a value-based delivery system to be viable, systems and applications must be integrated, interoperable, and functional across the full healthcare value chain.

3. Regulatory experimentation

Healthcare is, and will always be, heavily regulated. New rules and regulations will continue to emerge yearly. However, the volatility of politics and government priorities across world markets is giving rise to citizen unhappiness, whether related to economic or social factors, which engenders unpredictability. Consequently, experimentation with regulatory solutions is cropping up throughout markets.

HDOs new focus on specific business initiatives

Current trending business drivers are pushing HDO decision-makers to draw new plans for addressing the challenges that come with a changing industry. While managing finances, delivering quality care, and insuring security remain HDO concerns, three priorities are at the forefront.

4. Deliver quality care and services

Quality of care remains a pressing initiative with the overarching goal of continually improving the health of patients and society at large. How value is perceived is changing, but all industry players are emphasizing care.

5. Manage the financial viability of the enterprise

Whether public, private, profit or nonprofit, every HDO must grapple with critical financial initiatives

• “Growing revenue and services
• Eliminating waste
• Reducing costs
• Achieving economies of scale
• Taking advantage of revenue opportunities
• Reducing leakage
• Improving billing
• Reducing claims denial

Identifying and taking advantage of economies of scale to reduce costs and consolidation through mergers and acquisitions” *

“Gartner’s CIO survey of healthcare providers confirms financial findings and shows that 51% of respondent organizations state this is a top priority, with growing the business/revenue (32%), cost optimizing/reductions (12%) and business/financial goals (7%).” *

6. Secure Data and Technology Assets

This initiative is elevated by the increasingly virulent threat landscape. Security is particularly critical in healthcare simply due to the highly sensitive nature of healthcare data. Naturally, patients have high expectations for protection from disclosure and unauthorized use, while regulators wield the power to impose fines. Meanwhile, IoT devices, mass collection of health data, and the goal of building a comprehensive view of individual health are increasing potential risks.

Go-forward plans for the healthcare provider CIO

With so much change taking place in healthcare, IT is a central force for facilitating the transitions. IT leaders and CIOs must stay abreast of industry trends and adjust IT strategies accordingly. Healthcare provider decision-makers should keep in mind the following recommendations:

• Increase your organization’s ability to identify and assimilate innovations for the purpose by addressing organization barriers limiting efficacy.
• Accelerate digital initiatives by demonstrating the business value of IT in enabling growth objectives such as new digital business models.
• Move experimental organizational approaches for innovating in artificial intelligence (AI) and discrete digital medical technologies to a formal and mature organizational strategy.
• Prepare for a “borderless” industry by adopting a digital platform architecture that engages the broader health ecosystem for value creation and delivery.
• Amplify your digital leverage by modernizing your data and analytics architecture.
• Support the macro trends of population health and VBC by prioritizing investments around data, analytics, and the patient experience.

The reality can’t be overemphasized: digital transformation is affecting the healthcare industry at a rapid pace. From the internet connection in the hospital room to the sheer number of medical devices touching the network, CIOs and IT departments must act now to keep pace with the rate of change within healthcare institutes globally.

Register for full access of this Gartner report to view all six business drivers, including:

• Key IT recommendations
• Translating marketing dynamics into healthcare business drivers
• IT recommendations for changes in funding for healthcare
• Gartner recommended readings

To learn more, download the full report Gartner: Business Drivers of Technology Decisions for Healthcare Providers

_{* Gartner, Business Drivers of Technology Decisions for Healthcare Providers, 2019, 3 January 2019, Steven Lefebure, Laura Craft}

This blog was originally authored by Lauren Farah, Vertical Solutions Marketing Specialist.