Hospital and health system C-suite executives recognize that technology will play a central role in helping their organizations meet quality and cost objectives. Yet that’s not necessarily translating to a market that’s more fruitful for health IT companies. In fact, if your healthcare system is taking a more conservative approach to health IT investments in 2019, it’s not alone.
A recent survey of 100 C-suite leaders by Managed Healthcare Executive found that fewer than half of healthcare leaders plan to invest more in technology this year than they did in 2018, and only about 20 percent plan to invest the same amount this year as they did last year.
Here are four reasons why you are pulling back on health IT investments:
1. You are still recovering from the EHR burn
Many of you invested a significant amount into EHRs, only to find that the investment didn’t pay off as much as expected. In fact, 64 percent of respondents to a Sage Growth Partners survey of 100 physicians said EHRs have failed to deliver better population health management tools, and less than 25 percent said their EHRs can deliver on core KLAS criteria for value-based care.
For that reason, it’s not surprising that many of you are wary when it comes to technology investments, even those that are much smaller scale than an EHR.
If your hospital or health system is considering a new health IT investment, how that technology can complement your EHR should be a primary consideration. If the health IT sales representative can’t answer tough questions related to how the solution augments your EHR, that should be a big red flag.
2. You require input from a broader team
The number of individuals and the type of individuals involved in health IT and health IT decision-making is changing at hospitals and health systems. One of the biggest areas of change and one that you may be seeing at your own healthcare system has to do with the role of chief information officer (CIO).
A Black Book Survey released in December 2018, for example, found that CIOs are growing less powerful when it comes to purchasing decisions. Instead, the responsibility for decision-making is shifting to a line of business management teams. Overall, the survey found that between 2015 and 2018, CIOs’ power over IT purchasing decisions fell from 71 percent to just 8 percent.
As the number of people involved in decision-making grows and scales across different departments at hospitals and health systems, obtaining sign-off on investment decisions is likely to become a harder, slower, and more complex process.
3. You are more selective and require more proof points
The number of health IT products and solutions has grown exponentially over the past few years. In addition, as new disruptors such as Amazon, Apple, and Under Armour enter the healthcare arena, the health IT marketplace is becoming even more crowded.
Most of you are constantly bombarded with the “latest-and-greatest” new products, and many of you may be beginning to feel that the hype surrounding these new solutions is overblown.
To separate hype from reality, prior to investing in new health IT, you should always ask for proof points related to the economic value health IT solutions offer. The best technology providers will be eager and willing to provide hard data about how their solution has impacted other, similar organizations. Better yet, they may even be able to perform an analysis to show how the solution is likely to impact your organization specifically.
4. You don’t feel as rushed to acquire technology that supports value-based care
The movement toward value-based payment continues, but many studies show that it’s not moving as quickly as many anticipated. A Sage Growth Partners survey of 89 provider organizations, for example, found that while 100 percent of respondents participate in some value-based program, up to 90 percent of their revenue is still fee-for-service.
Organizations that are still heavily tied to fee-for-service are less eager to invest in new technology that supports value—they just don’t see a need for it yet.
If this sounds like your organization, it’s still important to keep a close eye on the value-based payment shift and other changes occurring in the industry. Those changes include shifting consumer expectations and new government requirements and regulations.
And of course, while value-based payment may not be growing as quickly as expected, it’s not going away. A recent survey by Navigant found that 64 percent of finance leaders at hospitals and health systems plan to assume more risk in contracts with commercial payers in the next one to three years, and 57 percent plan to take on more risk with Medicare value-based models.
To thrive amidst all of these changes, all hospitals and health systems will need to appropriate additional tools. Those tools will depend on your organization’s strategic objectives. For example, they might include analytics to better understand the patient population, care management solutions to better manage populations, telemedicine to extend patient access, and patient navigation tools to enhance the overall patient experience.
Landing on the right investments will be key to success.
About Stephanie Kovalick
Stephanie Kovalick is the chief strategy officer; general manager, strategy, at Sage Growth Partners (SGP). She is responsible for building SGP’s internal growth strategy as well as leading the strategy consulting team. She also has deep expertise in healthcare payment models and revenue cycle management. Contact her at firstname.lastname@example.org.