Tuesday, Apr 11, 2023

Digital Transformation in Healthcare: Challenges and Opportunities

Hugh MaPartner, Healthcare & Life Sciences, West Monroe


If you’ve heard it once, you’ve heard it a thousand times: The COVID-19 pandemic has accelerated the adoption of digital technologies in many industries, including healthcare. With the shift towards remote care, telemedicine, and virtual consultations, healthcare providers are increasingly relying on digital tools to improve patient outcomes and optimize operations. However, as a recent survey by West Monroe and Healthcare Dive reveals, healthcare organizations face significant challenges when it comes to digital transformation—and we dug into the details of why and how.

The survey, which polled healthcare executives from provider organizations across the US, saw nearly all respondents reporting that their organizations had either implemented a digital transformation strategy or were planning to do so within the next year. However, the definitions of “digital strategy” varied widely, suggesting what many of us know to be true: “digital” and “digital transformation” mean very different things to different people.

This lack of alignment among healthcare stakeholders around what “digital” really means in healthcare and why it matters was one of our survey’s key findings, and it’s worth expanding upon. While most respondents agreed that “becoming digital” requires a combination of technical and cultural change, when participants were asked to elaborate on which specific changes were most in keeping with their definition of a digital operating model, they overwhelmingly chose technological ones. For example, 57% of respondents selected “leveraging data and analytics to drive better outcomes in clinical operations” and 50% selected “creating new digital products and services.”

This focus on technology presents challenges to the realization of the cultural changes that are necessary for digital initiatives to have real impact. Many healthcare organizations struggle with change management, and our survey found that 55% of respondents cited increased administrative burden as a reason why digital initiatives fail to meet expectations. Misaligned value propositions and a lack of organizational commitment were also cited as stumbling blocks—some of the most common pitfalls of change management.

Moreover, healthcare organizations struggle to measure progress and value within digital initiatives. While external care quality outcomes and outcome metrics were cited by most respondents, only 9% said they considered their organization’s revenues to be a meaningful indicator of their digital strategy’s effectiveness. This was one of several findings suggestive of the fact that healthcare providers need to find—and would very much welcome—better ways to measure the impact of digital initiatives on their bottom line.

The survey also revealed changing stakeholder perceptions, with growing numbers becoming aware that leveraging evidence-based design within healthcare facilities has the potential to improve comfort, staff productivity, and physical and emotional well-being. By adopting agile processes that leverage data and stakeholder feedback, including patients, clinicians, and employees, healthcare providers can create a culture of innovation and continuous improvement that is essential for success in the digital age.

In our view, moving to a digital operating model requires making digital a defining characteristic of the business. Becoming digital will affect everything from how a patient portal is set up to how recruitment and staffing are managed. To make this transition successful, organizations need to build foundational capabilities first. That means getting everyone on the same page around the baseline organizational, operational, and technological competencies that will support better experiences for patients and providers alike, increase revenues, lower costs and improve outcomes – all in measurable ways.

“Digital” as a fundamental mode of operating is becoming a table stakes principle of our industry today and will only become more essential in the future. While healthcare organizations face significant challenges in realizing the cultural change that is necessary for digital initiatives, there are also significant opportunities for those who can navigate these challenges successfully. By focusing on building foundational capabilities and creating a culture of innovation, healthcare providers can improve patient outcomes, optimize operations, and position themselves for long-term success in the digital age – and do so without breaking the bank.

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