Digital innovation and investment during tough economic times
There is no shortage of financial challenges in providing health care today. With intense pressure on resources and staff — as well as rising costs for labor, supplies, equipment, and technology, care — providers may find it difficult to take on new digital health innovations and projects. However, digital health innovations deployed in the right spots can improve operational efficiencies, customer experience, and even create new revenue opportunities.
Grim financial reality
The American Hospital Association (AHA) released a report in late 2022 that detailed how the tough financial climate across many U.S. hospitals is a threat to care access and quality. COVID-19 surges and other impacts have been an obvious primary driver of these woes, and ongoing workforce challenges and input costs have contributed to what the report called the most financially difficult year for healthcare providers since the beginning of the pandemic.
According to the report, even the most optimistic projections for the entirety of 2022 indicate margins will be down 37% compared to pre-pandemic levels, with more than half of hospitals operating in the red. A possible worse scenario would see margins down 133%.
“Managing the aftermath of the pandemic has placed the vast majority of America’s hospitals in serious financial jeopardy as they experience severe workforce shortages, broken supply chains, the Medicare 2% sequester kicking back in and rapid inflation that has increased the cost of caring,” said AHA President and CEO Rick Pollack. “These realities translate into access to services being put in jeopardy.”
As for digital health in such a climate, providers have been racing to reduce costs across the board, which often leaves IT spending focused on “keeping the lights on.” This means most are just looking to keep current technology running. During tight financial times, the appetite for innovation goes down because leaders can feel like it otherwise uses resources on experiments, and not all experiments work out. However, this is short-game strategy that can leave providers behind the pack digitally. Continuing to invest in innovation and digital transformation, on the other hand, can compound achievements by not only decreasing costs but increasing revenue.
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Focused AIM, targeted success
Digital health proved its value during the pandemic, as providers quickly implemented solutions to care for many of its patients remotely and coordinate vaccinations outside the traditional hospital and clinical office settings. They also turned to technology to help with sudden supply chain issues.
In fact, many providers’ digital transformation goals were not hindered by the pandemic challenges. About 68% of healthcare organizations responding to the 2022 Digital Health Most Wired (DHMW) survey claimed they were on or ahead of schedule with digital health projects. Those who were behind on digital transformation most often cited budget limitations, cultural resistance, and short-term thinking as deciding factors.
Well-defined metrics and a consistent practice of analyzing performance against those metrics are key first steps in identifying specific areas where improvement would represent great value. Many providers have upped their AIM (Achieving Improved Metrics) to quadruple targets: reduced costs, improved clinical experience, improved patient experience, and better population health outcomes. Advancing health equity is a more recent proposition for a quintuple AIM.
Focusing on “easy wins” is one approach to strict governance of ROI and value for digital investment and innovation during economic uncertainty. This could include implementing innovative technology to enable patients to self-schedule, or to help improve operational scheduling to optimize staff and care capacity. Such efficiencies can lead to noticeable ROI.
Improving patient experience — DHMW providers reported wayfinding, orientation, education, bill payment, appointment scheduling and reminders, test results and patient portals are digital health priorities — can help providers win new patients (and keep existing ones) while driving revenue.
Human-centered design is another approach that places the consumer — this could be a patient, clinician, member, payer or any user of the technology — and their needs and wants as the primary focus around which digital health projects are designed. With “care anywhere” an increasingly popular goal, developing constituent persona profiles can provide organizations information to drive design that meets patients where they are.
Adoption of innovative artificial intelligence, machine learning, and automation technologies can improve operational efficiencies. They can also improve analytics to uncover additional areas of opportunity for cost savings and revenue growth.
Organizations looking to know where they are and where they can go in their digital transformation can use maturity models to develop an understanding of digital capacity, opportunity areas, and potential ROI to help drive decision-making and investment. Agile approaches to digital transformation can help organizations incrementally implement innovative technology by testing value propositions along the way rather than making massive investment commitments for possible ‘far in the future’ results.
Expert consultants can help healthcare organizations profile their constituent personas and use the information to drive design that addresses areas of friction to create more seamless experiences. These principles can be used across the digital portfolio, including contact center redesign, omnichannel outreach strategies, digital care navigators, and patient financial experience.
Staying the course
Tight financial times don’t have to put the brakes on digital health progress and innovation. Targeting key care and operational areas for investment, and monitoring performance for ROI as well as potential additional opportunity areas, may be the pathway to digital transformation in a tough economy. Focusing on patients, staff and desired outcomes will keep digital health progress on pace and improve access and quality of care.
Divurgent is a solutions provider committed to healthcare IT evolution, and the strategies and processes that make it possible. It helps hospitals, health systems, and affiliated providers with payment and delivery reform, operational efficiency, patient engagement, and raising the quality and lowering the cost of care to improve outcomes towards healthier communities.