Healthcare makes tepid progress with ROI from tech, AI investments

For more than a decade, healthcare organizations have been pouring billions into building out their digital infrastructure, chasing promises of a faster, more efficient, more patient-friendly approach to delivering care. 

And while a lot of little wins have slowly started to pile up into a clear shift in the way providers, payers, and patients interact during the care journey, individual organizations are still struggling to make sense of how to invest in technologies and strategies that will maximize the impact of every dollar spent.  

New data from consulting firm KPMG indicates that success with this task remains elusive for the majority of healthcare organizations. Despite sustained eagerness to adopt new technologies, including the latest generation of AI-enabled tools, healthcare leaders aren’t feeling particularly confident that they’re getting the most bang for their buck. 

Findings from the survey of 122 global healthcare leaders, extracted from a cross-industry poll of 2,450 CIOs, CTOs, and other technology executives, include the following: 

• Only 25% of respondents believe they’re actively progressing against their AI and automation strategies. The majority of respondents are either waiting for funding to get their ideas off the ground (29%) or are fighting internal delays even after securing the money (31%).  

• 73% admitted that capacity constraints are making their organizations feel less confident about investing in new technology. 

• More than half (57%) of leaders say they’re facing weekly disruptions in operations due to foundational flaws in their health IT infrastructure.  

• Over a third (35%) are concerned that “transformation fatigue” is likely to slow down their efforts further, even as competition heats up to infuse AI-enabled technologies into more and more areas of the healthcare experience. 

Healthcare may be experiencing such significant uncertainty because of the way leaders engage in decision-making, KPMG posits. For example, while it’s generally considered a good thing for CIOs to have a strong clinical background, their “scientist at heart” approach to adopting technologies may lead to an overabundance of small, controlled test pilots in areas that are academically or clinically interesting, but not necessarily driven by demonstrated business needs. 

This often leads to “pilot fatigue” that makes it much more difficult to identify and apply meaningful learnings to high-value use cases. In fact, among the eight major sectors surveyed, healthcare was the least likely to be successfully using technology to address specific known pain points flagged by employees and consumers, despite being among the most likely to solicit input from these stakeholders.  

As a result, the healthcare sector is falling behind on its key investment goals, especially in the AI arena. Only 32% of healthcare organizations reported they have invested strategically in core business capabilities and have AI use cases running actively across the organization that are returning business value, compared to an average of 43% of organizations across other sectors. 

Healthcare orgs were also more likely to report being in the beginning phases of implementation by saying they have a large number of AI proof of concept tests running, but haven’t achieved ROI yet from those initiatives (25% vs. 19% in other sectors), or that they have only a limited number of ad hoc use cases in production. 

The industry also ranked last in having established short-term goals to use AI for improving operational efficiency, despite 61% saying they are making an effort to prioritize AI and automation. 

There is one bright spot, however: healthcare leaders are making a concerted effort to bring privacy and security experts into the tech adoption process in a deliberate and coordinated way. Healthcare organizations are much more likely than other types of businesses to incorporate development, security, and operations (DevSecOps) frameworks into every phase of the tech adoption lifecycle, likely due to the known risks of cybercrime across the industry. 

Overall, healthcare organizations could be doing more to take a focused and ROI-minded approach to their technology plans, especially around AI-enabled automation strategies. 

While some degree of controlled experimentation is important in an industry where lives could be at stake if something goes wrong, organizations will also need to consider how to accelerate their technology projects in targeted, high-value areas to overcome funding roadblocks, prevent innovation burnout, and start to achieve measurable ROI that can further catalyze progress. 

Doing so will require organizations to take a closer look at their recent purchases and current pilots, determine which can be directly applied to the most pressing pain points for patients and staff, and lean into the programs that check the most boxes. 

By staying aligned with overarching organizational priorities, leaders can make the most of their investments and make faster, more efficient progress toward their most important goals. 

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.  She can be reached at [email protected].