Healthcare Providers Embrace Tech Strategies For Success

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The healthcare landscape in the United States is experiencing a significant transformation, with technology taking center stage as a strategic priority for healthcare providers. A recent survey conducted in June 2023 among 201 US healthcare provider executives revealed some fascinating insights into this digital evolution.

In 2023, an impressive 56% of respondents listed software and technology among their top three strategic priorities, a substantial increase from the 34% reported in the previous year. This shift underscores the growing recognition of technology’s pivotal role in healthcare. Furthermore, approximately 75% of respondents anticipate continued growth in software and technology spending over the next 12 months, indicating a sustained commitment to technological advancement within the industry.

Interestingly, the survey also highlighted disparities in spending intentions among different provider types. Academic medical centers (AMCs) and large hospitals and health systems exhibited a stronger inclination to increase their technology investments compared to smaller operators. This divergence can be attributed to their heightened focus on innovation and greater financial flexibility.

What’s driving this surge in technology investment? Respondents pointed to several key factors. First, technological advancements and the emergence of new solutions, particularly those related to patient engagement and cybersecurity, were identified as primary drivers for these investments. The healthcare industry recognizes that staying at the forefront of technology is essential to meet evolving patient needs and safeguard sensitive patient data.

Another significant factor motivating increased spending is the current labor shortage and financial pressures experienced by healthcare providers. These challenges have prompted organizations to seek technological solutions that can enhance operational efficiency and alleviate resource constraints.

Two critical areas of focus emerged from the survey results: revenue cycle management (RCM) and clinical workflow optimization. Providers are prioritizing investments in these areas due to their potential for delivering a near-term return on investment. RCM software is particularly important as it directly impacts revenue through improved collections and cost reduction by streamlining labor-intensive processes. Providers intend to invest in various RCM subsegments, including revenue integrity, charge capture, and complex claims processing.

Clinical workflow solutions, on the other hand, enhance health system efficiency and throughput. For instance, patient flow software identifies and addresses potential discharge barriers, ultimately improving patient satisfaction by streamlining the care experience.

Beyond RCM and workflow optimization, freestanding hospitals and physician groups are focusing on other core systems, notably electronic health records (EHR) and IT infrastructure.

In contrast, AMCs are directing their attention toward enhancing patient engagement capabilities to improve the overall patient experience. Additionally, they are investing in data platforms in preparation for longer-term opportunities, such as value-based care (VBC) and data monetization.

While not prominently mentioned by respondents, cybersecurity remains a critical concern due to the sensitivity of patient data and the prevalence of cyberattacks on healthcare providers. The rapid deployment of new generative AI technology has added complexity to cybersecurity considerations.

Providers are increasingly seeking simplified technology stacks and vendors offering comprehensive suites of solutions. Integration and interoperability challenges, as well as cost considerations, have been identified as significant pain points with existing IT solutions. Consequently, healthcare organizations are streamlining their technology stacks and turning to EHR vendors and suite providers. This trend, which has gained momentum since 2022, has notably benefited Epic, which now commands over 60% of total US hospital net patient revenue (NPR).

Despite growing interest in artificial intelligence (AI), attitudes toward it remain mixed. The emergence of generative AI has brought AI strategies to the forefront, with approximately 70% of health system respondents believing that AI will have a more significant impact in 2023 than in the previous year. While only a small percentage of respondents currently have generative AI strategies in place, this number is expected to grow substantially in the coming year. Academic medical centers are leading the way in AI adoption.

The mixed sentiment toward AI is driven by both enthusiasm and concerns. Providers with advanced AI strategies, particularly AMCs, express more positive sentiments, driven by the potential for efficiency improvements, better patient outcomes, and cost savings. However, concerns related to security, privacy, cost, ethics, accuracy, and reliability persist among providers with less positive attitudes.

Barriers to further AI adoption vary based on provider sophistication. AMCs are more concerned with clinical risk and regulatory considerations, while smaller providers cite unclear benefits, lack of expertise, and resource constraints as their primary challenges.

AI use cases that enhance the quality of care, such as clinical decision support and diagnostics, are considered top priorities and are expected to gain importance. Providers prioritize AI use cases with a strong bottom-line impact, such as predictive analytics and workflow optimization.

The rapid growth in awareness of generative AI has led healthcare organizations to experiment with this technology. Examples include Epic’s use of Microsoft Azure OpenAI Service to assist with patient message responses, Mayo Clinic’s testing of a Google-powered tool for data analysis, NYU Langone’s pilot of a tool for analyzing unstructured EHR notes, and Microsoft subsidiary Nuance’s development of a tool for transcribing physician-patient interactions and completing forms within Epic’s EHR.

The rise of AI presents an opportunity for large technology firms to establish a stronger presence in the provider IT segment, historically challenging for them to penetrate. Many tech firms are forming partnerships with healthcare-focused vendors and provider organizations, enabling them to leverage their large language models and transferable R&D. Over half of surveyed providers anticipate accelerating IT spending with these tech giants, representing a 12 percentage point increase from the previous year.

It’s clear that the future of healthcare in the United States is inextricably linked with the rapid advancement of technology. Healthcare providers are wholeheartedly dedicated to expediting their investments in Information Technology (IT), emphasizing solutions that not only yield tangible returns on investment but also streamline their intricate technology infrastructures. Amid this technological renaissance, Artificial Intelligence (AI), particularly the cutting-edge generative AI, shines as a beacon of promise. Nevertheless, this promise comes with the imperative task of addressing critical concerns regarding security, privacy, and cost-effectiveness while substantiating its potential through demonstrable real-world productivity enhancements. In essence, healthcare providers stand at the vanguard of a thrilling digital transformation, one that is poised to profoundly shape the industry’s trajectory and define its future landscape.