Is 2018 the year healthcare leaps ahead into digital transformation?

Evolve or risk becoming obsolete.

That’s a sentiment shared by a large percentage of top executives when it comes to digital transformation. In fact, stats gathered from a Vanson Bourne survey of 4,000 business leaders revealed that 45 percent believe their business may become obsolete within three to five years, while 48 percent are unsure what their industry will look like in just three years.

When it comes to healthcare, fear of obsolescence may not be as pronounced, but technology is playing a significant role in motivating healthcare executives to evolve their patient care delivery strategies to expand beyond the acute care setting. Think of the effects imposed by digital disruptors like telehealth, robotics, AI, and machine learning platforms (especially in genomics and pathology), to name a few.

Are we closer than we think?
Initial assessments from the Vanson Bourne survey showed the majority of healthcare organizations place themselves in the “Digital Laggards” category of the Digital Transformation Index curve (Fig 1), fitting with previous stereotypes that healthcare may be a laggard when compared to other industries when it comes to adoption of new technologies, particularly with healthcare data protection and security considerations.

But times are changing, and fast. Healthcare organizations have been catapulted along the digital transformation road in this short time span as they start thinking about initiatives for connected care, connected data, multi-cloud environments. In fact, I’d place the majority of healthcare organizations in the “Digital Evaluators” category. A more recent McKinsey report seems to mirror that outlook, putting Healthcare Systems and Services just behind High Tech and Retail when it comes to the degree of digital penetration in the past three years.

Signals of Change
As the industry dynamically evolves, a number of disparate trends are combining to help move healthcare organizations on their journey toward digital transformation. The most impactful of these trends include:

EMR Adoption: Governmental mandates in the U.S. have spurred the digitization of medical records in recent years. Most healthcare organizations now have some form of a digital record system in place, and accordingly, have the systems and infrastructure in place to support storage of, and access to, digitized data—a key component of digital transformation.
High-Profile Mergers: Market forces and dwindling margins have favored economies of scale in healthcare. As a result, mergers are occurring at unprecedented rates causing a massive restructuring of the digital ecosystems between those involved. 2017, in fact, was a record-setting year, doubling the mergers between organizations with $1 billion or more in revenues in comparison to 2016. These blockbuster mergers like the recent joining of Aetna and CVS also have significant impact in the ways in which consumers access their care (think convenience). It’s likely that some of the ‘digital’ momentum seen in the retail health space will boil over into the payer models as large players like these come together.
Land of the Giants: Some of the biggest names in tech are looking to grab a slice of the growing healthcare data pie. In 2017 alone, healthcare equity deals involving ten of the largest tech companies in the U.S. were valued at nearly $3 billion. These companies are bleeding-edge leaders in digital transformation, and will likely help healthcare to become synonymous with digital.
Cloud: Leveraging multi-cloud environments is becoming the de facto model for new technology platforms in healthcare, helping to alleviate some of the previous challenges associated with the dramatic growth of health data, IT manpower and need to streamline infrastructure costs. New cloud-based technologies such as data lakes and blockchain, along with cloud-native standards, are helping to address some longstanding challenges associated with secure data sharing, and to some extent, interoperability.

The Digital Divide
The market is poised to leapfrog. But there is a critical step that must occur before digital transformation can be completely realized. Achieving true digital transformation requires healthcare organizations to cross the digital divide: the gap between connecting IT transformation (modernizing the infrastructure) with business transformation (being efficient at analyzing and digitizing operations). In healthcare, this translates to being able to effectively turn the massive pools of data flowing in and out of the healthcare system into real-time predictive and prescriptive insights.

From Laggard to Leader
The good news is much of the groundwork is already there. Most healthcare technology organizations are near digital ready, and regardless of where specifically an organization finds itself along the digital transformation road, there are practical roadmaps, hands-on services and transformative technologies available to speed the process and reduce uncertainty, time, and cost.

IT transformation technologies including hyper-converged infrastructure, healthcare data lakes, multi-cloud platforms and cybersecurity solutions, for example, are helping organizations achieve MAT (modernize, automate, transform). And business transformation solutions spanning Enterprise Resource Planning (ERP) platforms, EHR APIs, vendor neutral archives (VNA), and AI/machine learning platforms support initiatives such as population health, telehealth, connected health, clinical research, 360-degree patient views, precision medicine and more.

Disruptive companies are flooding the scene, helping healthcare businesses to become Digital Leaders vs. Digital Laggards. Companies like Welltok, for example, with its health optimization platform that wraps claims and clinical enterprise systems into an optimal and rewarding consumer experience. Or disruptive industry convergence accelerators like Midaxo which is a secure cloud platform for digitally enabling M&A. A connected care delivery platform from Teledoc has large employers flocking to provide virtual care as an employee healthcare benefit. Teledoc now has more than 20 million members, making the trend toward telehealth unstoppable. These companies are providing platforms which go beyond disruption as they create new and scalable opportunities for the industry to leap ahead—across the divide—into the realm of digital transformation.

Time’s up – some leaders are already here
We’ve seen plenty of incremental change over the last couple years, but right now the business pressures, consumer demands and clinical technologies are finally here. Who will emerge as the digital leaders? In many cases, leaders are already being established and some savvy healthcare IT groups have seen this coming. They understand that best of breed cloud platforms, new technology partnerships and consolidation via M&A are quickly becoming a reality. For them, it means time’s up because their organizations can’t wait to further evaluate—if they do their organization might just disintegrate. So last year we saw the signals for change. This year it’s all about the enabling technology triggers—machine learning, blockchain, robotics, consumer genomics—and it’s new delivery architectures including multi-cloud platforms. Let the transformation begin.

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