CFOs Weigh In On The ROI Of New Tech Investments

The cost of investing in tech solutions isn't cheap, but the returns can be significant.

Many organizations in nearly all industries are now involved with digital transformation efforts, or with some level of upgrading technologies and applications. All this investment comes with a price in terms of hardware, software, and human capital.

As hospitals and healthcare systems adopt new or more advanced digital technologies, many will have to upskill employees, reskill employees, or hire outside help. These organizations must consider the cost implications of these strategies and understand how to get the most bang for their buck.

But some organizations may find the answers lie not in the implementation of more advanced technologies, but by automating as many processes as possible and eliminating the need to add to their labor force.

Growth of telehealth driving many tech investments

While there are several factors driving investments in healthcare technology right now, one of the most significant has been telehealth and its impact on the electronic health record. While the use of telehealth was growing before the arrival of COVID-19, the pandemic caused its adoption to skyrocket.

"Our largest investment in funds and people has been around the electronic health record," says Denise Zabawski, CIO at Nationwide Children's Hospital in Columbus. "This includes not only the maintenance of the system that runs our health system but the addition of new content and new modules."

Zabawski says Nationwide saw the use of its patent portal and telehealth services jump during COVID, and the facility now has an "aggressive plan" to improve these consumer-facing tools. Nationwide also recently modernized its entire patient revenue cycle system, and future projects include adding dental and lab services to the core system.

Assessing the ROI of tech investments

None of these investments are cheap, but the right ones can easily provide a strong return on investment if they result in improved efficiencies, lower operating costs, and most importantly, improved patient care. But those expected benefits must be juggled against the cost of acquiring the right technologies, and the skilled professionals to work with them.

"After we analyze the cost, if the ROI is material and we can reallocate resources to more analytical functions, then the investment to upskill our workforce would have a significant return," says Carlos Bohorquez, CFO at El Camino Health in Mountain View, California. "In my experience, our workforce is eager to learn new skills and take on additional responsibilities. As an organization, we're committed to always investing in our staff." 

Sometimes the answer isn't as simple as determining whether hospitals and health systems should train internally, or bring in external help.

"An educated or trained individual is going to be more expensive than someone who doesn't have that degree of training," says Brad Haws, CFO at Emory Healthcare in Atlanta. "With them, you're getting a more knowledgeable and skilled worker. You're hopefully delivering a better product to your patients. So, there should be better outcomes."

On the other hand, there might be tremendous labor savings to be had if some of the new technology investments were for automation software, Haws says.

"If I can hire one highly skilled, but way more expensive, individual that can automate processes, then the potential savings are significant," Haws adds. "If I can hire five people and save several times that, then I'm happy to pay for those five highly skilled, highly trained people."

The role of automation in reducing overall labor costs

This isn't just wishful thinking, Haws says. With hospitals needing to invest more heavily in advanced technologies, combined with the well-publicized labor shortage in both healthcare and IT, automation could be a game-changer. Machine learning and automation technologies could enable many routine functions and services to be handled by software programs instead of healthcare workers.

While a software program isn't going to replace a surgeon or an advance care nurse, there are many routine functions that clinical staff is responsible for that they perhaps don't need to be.

For example, Haws says hospitals wouldn't need to have employees manually checking websites, following up on patients, and handling letters and paperwork. He says much of those tasks can be taught to automation and machine learning programs, freeing up workers for more strenuous or advanced tasks that address the quality of patient care or boost business revenues.

"I feel like we're still in the early stages, but we're starting to see a real upswing in automation interest," Haws says. "I think it applies in a lot of different places: pharmacy, accounting, in my area of finance, and back-office functions. There are a lot of places where automation will help."

Bohorquez shares that view.

"I think there are some opportunities to adopt artificial intelligence or other new technologies to help us become more efficient and to then allocate human resources to non-repetitive tasks," he says. "We're currently exploring a couple of options in our non-clinical areas."

Weighing the options to insource or outsource tech investments

Whether a hospital or health system will need to retrain workers to handle the functions of new technology investments or bring in outside help to do the job, often depends on the size of the organization, Haws says.

"Where I was before didn't have the scale, so it was harder to say, 'I'm going to build a shop, and I have enough ROI to automate a transaction and to pay back that shop.' At Emory, we're much larger. So, if I create one automated robot, and it runs across a platform that can perform five times as many transactions, it's a lot easier for me to insource the work and build the center of excellence myself."

But what if automation isn't the answer, and a healthcare organization must continue with its current way of doing things? Then it must assess whether internal IT staff can handle the implementation and whether healthcare staff can embrace the new technologies, or if a third-party vendor should be brought in to handle it all.

To help make that decision, Zabawski recommends that a CFO answer the following questions:

• Is the technology stable and reliable? 
• Is a potential vendor in a good position to be a long-term partner?
• Can the technical people needed to do the work be found, and should they be staff or consultants?
• Can we build or buy the (cloud) infrastructure to ensure a highly reliable solution?
• Is the organization ready for the change this investment will cause and does it have the resources needed to ensure project success?
• Have others done this type of implementation or transformation successfully before, and what were their experiences?
• How does this get prioritized against other major projects, which could include building new facilities, M&A activities, and other major transformational projects that are planned?

Getting senior executives to support the ultimate decision

Finally, one of the most important elements in any new technology acquisition or implementation is support from senior leadership. Without that, many workers may feel threatened by the technology, worry about job security, and question why they are being asked to change their processes.

To obtain that executive support, Zabawski says some key messages highlight the need for technology investments and make the case for the best way to pay for needed skills or staffing acquisitions.

"We have areas of emphasis that typically resonant with senior leadership. All of these include capital, expense, and staffing costs," Zabawski says. Those technology investments:

• "Help us stay current and maintain high availability. This typically includes technology and software refreshment. It also includes significant investment in cybersecurity."
• "Support the strategic business plan, which covers new construction, major renovation, and programmatic growth and M&A activity."
• "Enable us to remain or become competitive in the market. We compare ourselves to others and determine how much we want to invest in either staying on par or providing a better patient experience."