Skip to main content

Digital Transformation Nascent Among Providers, Payers

Analysis  |  By Alexandra Wilson Pecci  
   March 21, 2017

Only 10% of payers and providers say they are actively executing digital transformation, but the number is expected to grow as the maturity curve accelerates.

"Digital transformation" is a term that's used loosely in healthcare. It doesn't mean what the same thing to everyone.

When Jeff Rivkin, research director at IDC Health Insights, talks with industry leaders about "digital transformation," he often hears about efforts associated with an organization's EHR/EMR system.

"Was that really a disruption?" he asks. "Or did you just automate the chart?"

Rivkin says automating a manual process is a good start, but is only the beginning of digital disruption, which he calls "a multifaceted experience."

According to a report from IDC Health Insights, only 10% of payers and providers say they are actively executing digital transformation, which it says includes "leadership, omni-experience, information, operating model, and workforce transformation."

Instead of actively executing digital transformation, most respondents to the survey are in the pilot or research phase of digital transformation initiatives, which is "just dipping their toes," Rivkin says.

The survey included 282 providers and 58 payers who were asked about their digital strategies and investments.

"The idea was to see where on the maturity curve providers and payers were," Rivkin says.

The 'Big 3' Initiatives
Although this year's 10% number is small, it's expected to be much higher next year. The survey shows that 42% of providers and 58% of payers are either piloting programs or have a digital transformation strategy in the production phase.

Among both providers and payers, digital transformation makes up 30% of new health IT initiatives. The three biggest areas that survey respondents are investing in are big data, analytics, and security.

"The ones that commit to it are going to be the big winners, and the ones that don't could be the losers in regards to survival, especially in the payer area," Rivkin says.

He acknowledges that true digital transformation is hard for an industry that's continually been stymied and upended by shifting markets and new regulations, but he believes that factors such as consumerization, value-based reimbursement and care, and mounting internal operating cost pressures are leading the healthcare sector to a digital tipping point.

"Inside-out digital transformation is a great answer for organizations that are willing to make that kind of commitment," he says.

Providers says that productivity, agility, and revenue growth will be the top drivers for IT investments. Although Rivkin says they have a realistic view and understanding of how health IT and revenue interplay, he's less certain that they fully understand productivity and agility.

Workflow and Culture Change
As providers get more top-down standardization as a result of an integration, they get a little more understanding of the subtleties of productivity and agility, he says.

"It's all about workflow, and I don't think the average hospital understood it was all about workflow ten years ago."

The survey data also reveals the power of CIOs to usher their organizations toward true digital transformation. CIOs can and should influence the culture of an organization, holistically and throughout departments, Rivkin says.

"The CIO is not just an information officer, he's a change officer now," Rivkin says. "The CIO is uniquely positioned to identify synergies and opportunities for digital transformations that are not siloed."

Alexandra Wilson Pecci is an editor for HealthLeaders.

Tagged Under:

Get the latest on healthcare leadership in your inbox.