The healthcare industry is on the brink of major — and ultimately overdue — reinvention. From unlocking the value of data, placing greater reliance on bots and addressing security concerns, healthcare payers and providers foresee a huge amount of work to do, with only one in 10 executives saying they are even moderately ahead of their peers in other industries when it comes to reaping digital benefits.
This is one finding from our recent study on the changing nature of work and what it will take to succeed in the digital era. Cognizant’s Center for the Future of Work — in conjunction with the renowned economist Nouriel Roubini — surveyed 2,000 top executives at leading companies around the world, including 348 healthcare payers and providers.
Here’s what you need to know:
A huge improvement in cost savings from digital is needed. The majority (76%) of both payers and providers have not experienced any cost improvements due to digital. The picture improves through 2018, as costs are expected to decrease by 2.4% — one of the largest decreases of any industry in the study. We actually see a far larger, untapped opportunity in cost reductions; companies such as TriZetto (a Cognizant healthcare software subsidiary) are using software robots to decrease healthcare payer costs by as much as 90% for some middle-office business processes.
Optimism is high for digital revenue increases. By 2018, digital will yield an 11% top- and bottom-line improvement for healthcare players, which is double today’s revenue impact of 5.2%. This will require a major break with the status quo — and a major shift for an industry that has traditionally been cautious and even jaded about digital change. New approaches like telemedicine, robotic-assisted surgery and AI-augmented diagnosis and prevention will be required to drive the envisioned boost in digitally-driven revenue growth.
Beware the digital delusion. Expectations for fast digital change (and accompanying results) are high — maybe too high. By 2018, 60% of healthcare executives think they’ll be digitally ahead of their peers, up from 10% today. Further, about one-third of healthcare providers and payers think that 20% or more of their revenues originated from digital channels in 2015. By 2020, these percentages will double, to 69% of healthcare providers and 73% of payers. To meet those high expectations, a good deal of work will need to occur over the next few years. Payers will need to place big bets on digital, automation and platform strategies to better compete with new, “born-digital” entrants.
Automation, bots and artificial intelligence (AI) will be key drivers in the transformation of healthcare work. Virtually all providers (100%) and payers (98%) said automation would be the leading digital force transforming work, as it would make work more strategic. Providers also emphasized a need for greater technical expertise (95%) and greater collaboration (92%). Most payers (94%) believe workers will collaborate with smart machines to augment job effectiveness. By 2020, AI and analytics top the new investment agenda.
Data security is a pre-eminent theme among payers and providers alike. As technology wraps itself around healthcare “things,” the more data will proliferate. Providers are personally very uneasy about the possibility of oversharing personal data, with 93% voicing this concern.
What the Future Will Bring
We asked payers and providers what healthcare work will look like in 2020. The top response — among 78% of providers and 74% of payers — was the ability to use digital to “contribute more meaningfully,” from ensuring that critical coverage did not slip through the cracks of a bad process handoff, or saving the lives of at-risk individuals through better digital information.
Significantly, nearly three-fifths of providers (59%) feel it is urgent for their organizations to use digital to improve communication with colleagues, as well as enhance work satisfaction (58%).
As trends such as healthcare consumerism and personalization are driving the industry to master digital, both payers and providers seem to be striving to see work as less of a “process,” and more of a mission to prevent illness and provide chronic care management.
Getting From Here to There
So, how can healthcare professionals — get from “here to there,” and really move the digital needle? Here are a few ways to ensure success:
Institute strong digital governance. Your organization doesn’t want to wind up with a big pile of unintegrated “experiments” that don’t really improve operations or outcomes. We recommend naming a chief digital officer, with a mandate (including real budgets and executive staff) to drive lasting change, optimize digital investments, ensure organizational alignment and deliver a seamless user experience.
Create a culture of innovation. Fostering vastly improved health at significantly improved prices in an economically sound way can seem really difficult. But it’s doable with the right culture. Consider in-house innovation labs, “shark tanks” and hackathons, and leaning on new approaches from the external community of healthcare application developers.
The platform becomes the process. The explosion of healthcare venture capital investment is creating a host of innovative solutions, making it difficult for any organization to “out-innovate” the market. Harnessing leading-edge, best-of-breed solutions via platforms to optimize the end-to-end consumer experience is a must. The New England Healthcare Exchange Network is a good example to follow.
Increase IT responsiveness. Agile software delivery and new approaches such as DevOps will advance digital’s contribution to business value. (For more on new work styles and mindsets required of digital healthcare CIOs, see our white paper “Prescriptions for Healthcare’s Digital CIOs.”)
By 2020, digital will connect the dots, close gaps and improve the satisfaction and outcomes for consumers and physicians. For healthcare payers and providers, the time to get started is now.