Explore our Topics:

Healthcare digital transformation faces economic squeeze

Should healthcare providers start tightening their belts or lean into digital transformation as a way to withstand economic stresses?
By admin
Sep 14, 2022, 10:44 AM

After nearly three years of pandemic-induced stress, the US economy is teetering on the edge of a long-term downturn. Inflation is causing serious financial pain for consumers and businesses alike, while an extraordinary realignment of the workforce is making it more difficult than ever to attract and retain top-notch talent. These challenges make it difficult for businesses to invest in forward-looking projects, such as healthcare digital transformation.

Experts are predicting that the turbulent economic climate isn’t likely to clear for some time, even for the generally recession-proof healthcare industry. Hospitals, health systems and physician offices are very much feeling the pinch from provider burnout and staffing shortages, patient volume reductions, rising prices, and liquidity woes, and many are seeing their already-razor-thin margins shrink further.

In such ominous circumstances, instinct says it’s time to hunker down to wait out the storm. Trimming unnecessary positions, consolidating assets and putting a freeze on new healthcare technology investments seem like the smartest ways to make it through a challenging time, but some leaders disagree.

“People say that now is the time to pull back, but I believe it’s quite the opposite,” said Patrick McGill, MD, chief transformation officer at Community Health Network (CHN) in Indiana.  “We need to cut waste and be more efficient, of course. But technology is crucial for helping us do that, and we need to put those tools in place right now.”

This doesn’t mean spending sprees are the answer either, as McGill advised, “Don’t be reckless, of course, but think carefully about the investments you need to drive improvements and efficiencies during difficult economic periods so you can withstand the pressures and come out the other side in a strong, stable position.”

Identifying areas of opportunity for digital investment

Every healthcare organization has a laundry list of digital transformation projects that range in priority from “nice to have” to “should have done this years ago.”

While the items at the bottom of the list may have to wait until finances loosen up again, organizations may wish to take a second look at initiatives that seem expensive but offer a high potential return on investment (ROI).

These include technologies that can actively address one of the most challenging issues of the modern environment: provider burnout and staff retention, noted Michael Suk, MD, JD, MPH, MBA, FACS, the chair of Geisinger’s Musculoskeletal Institute and Chief Physician Officer for Geisinger System Services.

“We can’t do much about inflation, but we can address some of the workforce issues that are driving up costs across the healthcare system,” he commented. “Burnout is an enormous issue in terms of organizational culture and patient safety, but it’s also a problem for the business side of the enterprise.”

Suk stated investments in healthcare technologies make it easier for staff to do their jobs better. “You’re likely going to see a positive return if you put your dollars into automation tools to reduce administrative burdens or communication and interoperability technologies to eliminate barriers to care coordination.”

Multiple gains with a single strategic approach

Automation technologies can improve provider satisfaction as well as patient experiences, Suk said, addressing both staff and consumer concerns at the same time.

“To improve outcomes and reduce burnout, we need to increase the amount of presence per patient,” he explained.  “Normally, we would think about just hiring more people to do that.  But that’s expensive, it’s hard to do in this current labor market, and it’s not always effective.”

“Instead, we can use technology to enhance our visibility and provide wrap-around care for our patients, effectively increasing the amount of attention we can devote to each individual and making our existing staff more efficient and informed—all without adding people to the payroll.”

CHN has taken a similar path, McGill noted.  “We’re making strategic investments around labor costs and patient retention, which are some of our biggest opportunities,” he said.

“By making patient engagement a priority and automating a lot of the simple, repetitive administrative tasks around making appointments and delivering care reminders, we’re giving patients the information they want while drastically reducing the people-hours it takes to complete these objectives.”

That said, he conceded the decisions are not easy. “I know a lot of health systems are still reeling from COVID, and it’s hard to let any money go out the door right now. But making these investments now will certainly pay dividends long-term as you make the healthcare experience easier for patients and provide relief for your staff.”

“Shop in your closet” to optimize existing technology

Investing in healthcare technology doesn’t always mean buying a brand-new license or software package. It can mean spending the time and effort required to optimize an existing system to make the most of its potential.

“Everyone has applications already in play that haven’t reached their full potential yet,” said David Seo, MD, CIO of Nicklaus Children’s Health System in South Florida. “If a big layout of capital isn’t in your budget right now, go shopping in your own closet and take a look at the current projects that just need a little extra TLC to return the results you’re looking for.”

Enlist a champion to reinvigorate those efforts and reach your buy-in goals,” he suggested. “It may be that you already have a transformative initiative on your hands, but you just need some additional time and effort to fully leverage what’s already in your portfolio.”

Engaging staff in taking ownership of optimization projects can reveal previously hidden inefficiencies and encourage new ways of thinking about existing processes, he suggested.

For example, Nicklaus Children’s efforts to implement patient wayfinding technology led to many conversations about how disparate departments can work together to streamline the patient journey and reduce complexity for anxious families and the staff members assisting them.

“A technology implementation always reveals interesting differences in the way we work across teams,” he said. “We love having those internal discussions and mapping them back to the technologies we’re using to further optimize what our patients are experiencing. These discussions maximize the impact of our technology tools, because we’re able to become more strategic about the functionalities that sit behind the digital front door.”

Organizations may not feel able to make splashy purchases of non-critical technology right now, but that doesn’t mean that healthcare digital transformation should grind to a halt.

“Investments might slow down, but we can’t afford to stop innovating,” stressed McGill. “Lean times challenge people to think about how to do things smarter and how to get creative. We have an opportunity to become even more efficient while delivering high-quality care, which is always good for our staff, our patients, and our financial sustainability in the long run.”

Jennifer Bresnick is a journalist and freelance content creator with a decade of experience in the health IT industry.  Her work has focused on leveraging innovative technology tools to create value, improve health equity, and achieve the promises of the learning health system.

Show Your Support


Newsletter Logo

Subscribe to our topic-centric newsletters to get the latest insights delivered to your inbox weekly.

Enter your information below

By submitting this form, you are agreeing to DHI’s Privacy Policy and Terms of Use.