Healthcare economy

Ecosystem or Monolith: The Dawn of the DX Healthcare Economy

Healthcare systems are moving toward a new care delivery model, centered around the paradigm of value-based healthcare, with the overarching, unifying goal of delivering value to the patient. Value-based healthcare rewards performance, rather than volume, promotes better collaboration between healthcare providers by basing the organization on medical practice patient pathways and care cycles, and incorporates the experience of the patient. In value-based healthcare, value is the ratio of patient outcomes to care provision costs.

The drive for a new paradigm for healthcare, embodied by value-based healthcare, is fueled by the need to do something innovative about the old and inadequate ways of delivering care that are no longer sustainable with an elderly population and a shift in demographics. But value-based healthcare suggests to us that we can only optimize so much without really reengineering our business. Small steps can no longer deliver the significant changes that are now needed. In value-based healthcare, outcomes and costs must be measured at the patient level and must encompass the entire cycle of care. This requires an unprecedented granularity in accessing and using health information to get insights at both the single patient and population levels, and to support a strong evidence-based culture in medical decisions. The emerging new value-based business models reflect the changing outlook of healthcare organizations, which are finally ready to embrace change on a more fundamental level than ever before. That’s why, with value-based healthcare, we are looking at the dawn of the digital transformation (DX) healthcare economy.

Substantial changes are required to implement the new business models, involving the entire healthcare ecosystem, and these changes are only achievable with digitalization at their core. In healthcare, management of legacy systems is therefore a growing challenge — not only when looking at obsolete digital applications but also at infrastructure, and in the end how healthcare providers purchase digital applications and platforms. When IT fails to deliver due to legacy and lack of agility, the business model and clinical processes become legacy as well.

 

Organizations adopting the new healthcare business models illustrated in the figure above will need to invest in digital capabilities. The most successful organizations will be those that can align business and digital initiatives in a DX strategy, with clear execution plans and legacy modernization roadmaps.

Within the old siloed healthcare paradigm, the application architecture often consisted of hundreds and sometimes thousands of clinical and administrative applications. The applications were designed to support one or maybe a few use cases, often just within one department in a healthcare organization. The applications did not enable major changes to the existing business model or processes, so healthcare providers were not able to change significantly after each IT system was implemented. They were only able to make minor corrections to the existing business architecture, which impacted return on invest and quality improvement.

Today’s technologies — such as cloud, Big Data analytics, IoT, artificial intelligence, mobility, and social business — enable healthcare providers to adopt new business models and paradigms, but they still need to make the right choices. The business must be the main driver of IT investments and with the help of enterprise architects, the application architecture needs to remain coherent and interoperable so data can be shared and delivered at the point of care throughout the patient ecosystem.

New digital platforms with an ecosystem core built on an agile infrastructure can leverage enterprise and third-party resources and build an industry ecosystem architecture. They are built on technical, semantic, and process interoperability principles to ensure configuration granularity and openness to engage with other providers and adopt new ways of delivering a collaborative and quality-driven healthcare service. When the business and digital strategy and initiatives are aligned and executed in parallel, the DX healthcare economy will be upon us and the vision of the new care paradigm will be fulfilled.

The electronic healthcare record (EHR) 2.0 is an excellent example of a new breed of technology platforms underpinning a new patient-centric model of care delivery, entailing personalized medicine, integrated pathways, value-based reimbursement, and omni-channel experiences.

The EHR 2.0 as a platform approach provides interoperability with various systems and data sources. It manages information, securing access to the right information at the right time at the point of care. The EHR 2.0 therefore supports semi-automation of processes and integrated pathways and helps to optimize resource allocation and consumption. As a core principle, the EHR 2.0 leverages patient engagement capabilities by triggering actions through electronic communication and based on evidence from cognitive analytics.

For top healthcare executives, the journey starts with the core clinical business model. “How will we deliver healthcare in the future?” is an important question to kick off this visionary journey.

Healthcare executives should:

  • Align digital strategies with value-based health initiatives by engaging in dialogue with the hospital CIOs on how DX can enable and transform the organization based on a shared vision of care processes, patient engagement, and desired outcomes.
  • Create a forum of collaboration with other healthcare providers so that the care delivery models can be coordinated and adjusted to everyone’s needs and implemented more easily.
  • Develop and mature new innovative and digital capabilities in the organization to exploit the DX healthcare economy. The capabilities must be centered around data, technology, process management, talent, and governance.

Healthcare CIOs should:

  • Engage in discussions with executive healthcare leaders on business strategies. Only CIOs who truly understand the vision of the healthcare organization can manage the DX economy and thereby align IT investments and roadmaps to the business overall.
  • Consider a platform approach to new IT investments, where data liquidity and data management across the ecosystem must be prioritized to fully exploit the value of the DX healthcare economy.
  • Engage with an ICT vendor with industry knowledge, an end-to-end service portfolio, and change management capabilities that can guide the provider through a clinical transformation program toward a value-based healthcare paradigm.

Read More:

 

Jonas Knudsen

Author: Jonas Knudsen

Jonas Knudsen (Twitter: @JonasHKnudsen) is a research director within IDC Health Insights in EMEA. He is responsible for analyzing key trends related to IT strategies and spending in European healthcare organizations. He advises healthcare organizations and ICT vendors on planning and implementing effective digital health transformation initiatives to drive integrated and personalized care innovation.

Until April 2016, Jonas was the CIO of the New University Hospital Odense, formerly employed by the region of Southern Denmark, and was an associate professor of IT management at the University of Southern Denmark.