In the past 18 months, the digitization of patient journeys has accelerated significantly. Now, the scope of digital engagement touchpoints continues to expand, and the number of solution providers that claim unique capabilities to deal with opportunities has also increased significantly. Terms such as “digital front door” and “patient participation solutions” have become common phrases that define the products of any number of startups and early-stage companies. We now have a huge ecosystem of similar-sounding startups, often with overlapping capabilities.
Digital healthcare funding has increased substantially—about doubling every year in the past few years—by most estimates, it will exceed $20 billion by 2021. Although the funding figures are exciting, given that healthcare is a US$4 trillion economy, embracing digital transformation is relatively slow, we may be in the initial stage of the digital health financing cycle in the next decade.
The digital maturity of the healthcare industry varies greatly
Many of the country’s larger health systems have made significant progress in their digital transformation journey. A question that often arises is: how mature is the digitalization of medical institutions. The answer usually depends on the organizational model that drives digital transformation. We see that with the support of multi-year transformation budgets in more mature organizations, the board of directors and executive leadership are committed to digital transformation; usually there is a small group of senior managers (including a dedicated chief digital officer) to promote strategic intent and closely coordinate In order to ensure a close handover from one transformation stage to the next stage; they cooperate with first-class technology suppliers, often form strategic alliances with a few enterprise-level technology suppliers, and use innovative start-up companies. The nation’s leading health system is using a range of technical tools to develop new standards for digital patient participation, drawing on the practices of other more advanced sectors, and recognizing the unique needs of health care consumers.
However, many health systems across the country are also struggling to stay ahead of the multiple market forces that affect their growth, profitability, and long-term competitiveness. Health systems in regions where population growth is flat or declining may require investment to increase patient participation in a range of tools, including EHR, CRM, and telemedicine, to take advantage of new patient acquisition and referrals, care gap management, and even improve the recovery of overdue payments. Generally, health systems face challenges in gaining acceptance and adoption by their clinical and nursing staff communities to adopt digital solutions. Solutions to improve the participation of digital patients may depend on the commitment and funding challenges of senior leaders and the maturity of the organization that deploys digital medical technology. Digital-first healthcare providers have steadily entered the traditional market, usually based on using the same technology to design and provide superior experiences.
Analyze the rapidly growing digital health solution landscape
The Cambrian explosion refers to the rapid growth of life forms on Earth in a relatively short period of time Cambrian More than 500 million years ago. Today, we are witnessing a similar explosive growth of digital health solutions, which may be a decisive moment in the digital transformation of healthcare. There is no shortage of innovative ideas in developing solutions to help the digital transformation of healthcare, and healthcare organizations have no shortage of interest in this. However, the broad prospects of emerging digital health solutions have left healthcare executives confused and afraid of making the wrong technical solution choices.
The following are some methods and considerations for the health system to make effective technology and partner choices for implementing the multi-year digital transformation roadmap.
- Choose “EHR-first”, but don’t be restricted by “EHR-only”: Major players in the field of electronic health record (EHR) systems have established important digital capabilities, especially in the core aspects of healthcare operations related to access to care. The EHR platform also provides the convenience of seamless integration into care delivery and care management workflows. This is usually the most compelling argument that EHR providers make when they persuade healthcare executives to adopt an “EHR first” strategy for digital transformation. Not to mention that for health systems with low financial and technological risk appetites, an EHR-focused approach makes the most sense. However, in an environment where consumers expect rapid changes, the “EHR first” approach may be limited. The health system that has made the most progress in digital health plans has integrated many top-notch independent solutions to enhance or replace local EHR functions; examples include self-service functions for provider directory lookups, online payment gateways, and chatbots.
- Looking for mature technology companies with powerful enterprise-level platforms: Large technology companies are making big bets in the healthcare sector. The largest companies are looking for a multi-pronged approach to healthcare, including acquiring large, mature technology companies (for example, Microsoft’s acquisition of Nuance), and focusing on key differentiating capabilities (for example, CRM’s Salesforce). In some cases, technology companies seem to directly compete with the health system (for example, Amazon in the primary care sector). Although the market strategy is confusing, every large technology company provides core capabilities that can drive the health system forward in its transformation efforts. As the situation evolves, healthcare executives will also find themselves in conversations with technology companies that compete in unfamiliar fields. An example of this is the recent positioning of itself as one of the leading EHR providers for CRM platform providers. An important consideration is that most enterprise-level technology companies sell platforms rather than point solutions. Customization, integration, and ongoing support efforts require extra effort, resulting in a much higher total cost of ownership of the health system. As a general rule, enterprise-level platforms can deliver value at scale, which means enterprise-wide deployments are required, which may involve the integration of smaller, independent solutions into fewer platforms.
- Embrace digital health innovators and startups, but hedge against risks: Today, the excitement surrounding digital health innovation has eased due to the risks involved. Many innovative start-ups have created a niche market for themselves through carefully managed product development and market growth with the support of venture capital. However, the reality is that the scale of operations of these companies is often small and can only be maintained by a small number of customers. Many of these companies often merge with other start-ups or are acquired by large companies to achieve scale and remain relevant.Well-funded startups can also disappear There was no warning almost overnight. Healthcare executives may find themselves spending a lot of time and internal resources to help build a supplier’s product, only to find that the company was acquired by a larger company, key personnel were lost to other customers, and many other unexpected results. The hedging strategy adopted by some health systems is to selectively hold equity in start-up companies. In addition to providing a certain degree of control over the future development direction of startups, it can also provide advantages in the event of a profitable exit.
In the rapidly evolving field of digital health solutions, there are no simple answers to questions about technology strategy. Numerous technology companies provide solutions for every digital engagement touchpoint in the consumer journey. Healthcare executives often don’t know where to start evaluating their solution options. Healthcare executives must often learn to ignore exaggerated claims about products in relatively immature industries. For a health system that can make the right choices, the bet can bring huge returns. For those who do not, there may be a painful process of relaxation and conversion, which may have an impact on patient experience and outcomes, not to mention opportunity costs and growth disruptions, especially in a highly competitive market. It is helpful to remember that not all the multicellular organisms that emerged from the Cambrian explosion have survived. However, those who did rule the earth for hundreds of millions of years-until another major event wiped out most of them. Metaphorically speaking, we are still far from that moment.
Photo: Valery Brozhinsky, Getty Images
