The spending on digital transformation worldwide will grow from USD 2.15 trillion in 2023 to USD 3.4 trillion in 2026, more than a two-fold increase in just four years, according to Statista. Transformation in health services is part of this global digital acceleration that we are experiencing now across all sectors of the economy.
Digital transformation is also the single leading IT priority for almost 75% of global companies surveyed by Statista last year. These numbers combined show that today's digital landscape is evolving at a breathtaking speed, and large-scale change has become a strategy of choice for businesses in many fields. But how prepared are healthcare organizations for the new reality?
Many posts on our blog discuss specific medical technologies. However, today, we take a bird's-eye view of how the different tools integrate within an organization to drive greater productivity and sustainability. We explore digital trends healthcare that have brought us here, the main areas of digital investment, the primary benefits, and the thorniest challenges in healthcare transformation.
What is behind the buzzword of digital transformation strategy? In general, it is a multi-year journey to achieve substantial improvements in organizational performance with the help of digital technologies. It takes much more than automating paperwork and reducing costs in the medical field. Usually, it involves innovative, better ways to deliver care and ensure patient well-being. Some core transformative technologies are artificial intelligence, robotics, and cloud computing.
As healthcare providers have been introducing digital technologies for the past 20-25 years, in many instances, they adopted a fragmented approach by focusing on individual initiatives like electronic health records and exploring particular popular technologies. Despite all these efforts, their business models mostly remained the same and fell short of the fundamental accelerating digital transformation in healthcare and occurring in other digitalized industries.
Rapid technological and clinical advancements, shifting consumer preferences to convenient and accessible care, the rise of remote work, and new competition from outside the sector propel converging trends of the industry.
In light of them, a few described in more detail below, healthcare providers strive to adapt their operations to stay relevant in the digital-first world, with information technology as a vital component of their strategy.
Digital tools incorporated in all areas of our lives have changed how we buy things and pay for them, where we work, and what we do in our spare time. Consumers' experiences with innovative retail, financial, and other companies have naturally created new expectations for similarly comfortable, accessible, and affordable services in healthcare.
Surprisingly, as many as 60 million Americans still have low physical access to primary care and mental health providers, according to McKinsey & Company. Of these, 10 million reside outside the broadband network, but the other 50 million Americans could benefit from telehealth solutions where medical facilities are not within reasonable reach. Avoiding the cost of travel also leads to lower bills, making healthcare affordable to financially constrained populations.
Today's technological progress is not linear--it is exponential. As the famous Moore's law declares, chip transistors have doubled in number while their costs have decreased in half every year. At the height of COVID-19, we could observe similar dynamics with the uptake of several healthcare technologies, including remote care and telemedicine. McKinsey reported that telehealth visits for health systems and practices increased 50-175 times.
Also accelerated by the pandemic, care delivery is shifting from hospitals, nursing, and rehab facilities to distributed sites, such as retail clinics and virtual doctors. The patient of the future will be at the center of an integrated, intuitive ecosystem enabled by advanced analytics leveraging both consumer- and provider-generated data. Moving away from traditional care sites will make home and self-care increasingly crucial in this ecosystem.
A more expansive view of healthcare in the context of people's well-being and proactive prevention of illnesses is blurring the industry's borders, opening it up for new entrants from other sectors. Technology giants who have already won over consumers' minds in their everyday lives are especially well-positioned to take on their health-related tasks, be it monitoring of vitals or wellness advice. There is also great potential for value-adding partnerships between healthcare incumbents and tech companies.
As healthcare becomes increasingly digitized, safeguarding sensitive health information is paramount. The rise of digital health tools, cloud storage, and telehealth platforms has expanded the attack surface for cyber threats. Healthcare organizations must prioritize data privacy and cybersecurity to protect patient records and ensure compliance with regulations such as HIPAA. Investments in advanced encryption, multi-factor authentication, and constant monitoring systems are no longer optional but essential components of a robust healthcare strategy in a digital-first world.
Where are organizations directing their digital transformation spending and efforts? Deloitte has conducted research surveying, interviewing, and involving US health systems' technology leaders in panel discussions to understand their digital journeys better. The study revealed that consumer engagement is simultaneously the top desired outcome (for 92% of respondents) and the most significant investment area (for 88% of respondents) in the digital transformation of healthcare institutions.
Providers see adopting an outside-in mindset by designing digital processes with the patient at the center as a clear priority leading to frictionless user experience and loyal and trustful customer relationships. Improved quality and outcomes of patient care came second in the rating of transformation outcomes from Deloitte's survey, though clinical care delivery has an evident impact on patient satisfaction too. Other functional areas receiving considerable investments in digitalization include cybersecurity and marketing communications.
Additionally, the report highlights that nearly two-thirds of healthcare systems are investing heavily in advanced analytics and AI to improve operational efficiency and deliver personalized care. This shift toward data-driven decision-making is crucial for meeting patient expectations and ensuring long-term growth in a competitive market.
According to the already mentioned Deloitte study, the most popular technologies healthcare systems are ready to spend their resources on for business model transformation are those related to analytical insights, virtual health, and cloud services. Let's look closer at these and other investment priorities that illustrate the use cases of digital health solutions.
A patient's journey today does not happen within the walls of a medical facility--it also takes place before and after an in-person hospital visit and might not even require it. A video call with a specialist on a personal PC or smartphone is equally effective for addressing particular needs, not to mention the cost-effectiveness and convenience of choosing a preferred meeting time and avoiding the commute.
Moreover, automatic bots can answer common patient questions, lowering staff workload and reaching a wider audience. Yet, a holistic approach to virtual healthcare goes beyond e-visits and chatbots. It requires continuous focus on the well-being of each individual with remote monitoring, cross-channel communication, and personalized guidance while fully respecting their privacy needs.
The priority of overall well-being brings us to health wearables--popular IoT-enabled devices and gadgets designed for comfortable everyday use by wearing on the body to track real-time wellness metrics. Some examples include fitness trackers, heart rate and glucose meters, and smartwatches. Increasingly health-conscious consumers use these devices to get exercise information, stay aware of personal conditions, share data with doctors, and prevent emergencies
The increase in remote and hybrid work following the pandemic prompted companies to embrace the cloud. According to Statista, adapting existing IT solutions with cloud extensions is the most common approach to digital transformation organizations worldwide pursued in 2022. At the same time, cloud implementation by almost 90% of companies also makes it the most adopted emerging technology.
One of the early and most familiar benefits of digitization of healthcare, automation promises to eliminate unnecessary manual work for medical professionals and patients, increasing staff productivity and customer satisfaction while cutting costs and lowering the risk of human error in laborious processes.
Physicians and nurses relieved by automated tasks can focus on what matters in their work and provide more patients with the care they need. Tools like automatic reminders of hospital visits and medication intake help patients and providers alike. Pharma companies, laboratories, and clinical research organizations also use automation in everyday processes.
There are many tasks patients might be looking to accomplish when turning to their healthcare provider: schedule an appointment, send health data, receive examination results, get prescriptions, review their medical records, or another digital innovation in healthcare. Patient portal technology comes in the form of comprehensive platforms that perform all these essential jobs and much more with the overall ambition of increasing customer engagement.
To increase collaboration, knowledge sharing, and data exchange across the healthcare ecosystem, some industry players are introducing digital systems that facilitate interaction among various parties, such as hospitals, their suppliers, insurance companies, and labs. Other emerging platforms provide flexible on-demand services from medical specialists unaffiliated with any specific organization.
Much transformation-related investment goes into analytical technologies to make sense of the data tsunami that has taken over healthcare and produce insights for making informed decisions. For instance, today's predictive analytics and AI instruments can recommend individualized treatment plans by analyzing a patient's condition history, effectively supporting doctors with unbiased, data-driven advice.
Blockchain technology is emerging as a key player in ensuring secure, decentralized management of sensitive health information. Its ability to create immutable, transparent records fosters trust and facilitates seamless data exchange between providers, patients, and insurers. As healthcare data continues to grow, blockchain's potential to improve interoperability, reduce fraud, and enhance data privacy is becoming a crucial aspect of digital transformation.
As we have seen, varied technologies have made their way to the healthcare sector, each with a distinct purpose. Still, what are digital transformation's most significant and common advantages in this field? We can distinguish those producing value for the healthcare organization and those positively impacting the patient.
Despite the many benefits of healthcare digital transformation, progress has been slower than expected. Several factors are holding back medical institutions' adoption of much-needed technological solutions. We briefly outline the challenges and tips to overcome them below.
Digital growth comes with more extensive risks to manage. The information security risk is one of the significant roadblocks accompanying every transition from analog ways of collecting data to digital systems. Just in 2023, the impact of cybercrime-inflicted damage will cost the world USD 8 trillion, according to a recent report by Cybersecurity Ventures, and it is likely to increase further by 15% annually in the coming two years. The cybercrime economy measured as a country would be the third largest in the world.
The report also stresses that most hacker attacks target small and medium-sized firms, with 60% going out of business in the next six months. Notably, healthcare facilities, like utilities, are part of critical infrastructure, which faces one of the highest levels of cyber risk exposure among industries. Safely storing and transferring sensitive patient identity and payment data requires proactive defense measures, creating a need for highly qualified IT security specialists whose supply on the job market is scarce.
While personal data protection makes sense to alleviate patient concerns, it is also a legal mandate for all healthcare providers dealing with sensitive information. Implementing new digital technologies needs to happen in compliance with regulations such as HIPAA, which may affect both its timeframe and costs considering additional training of employees. Thankfully, many medical software vendors and developers today offer fully compliant digital healthcare solutions.
One of the goals of digital transformation is usually to replace an organization's old and cumbersome IT systems with modern, user-friendly software. The problem is that the former systems may operate a healthcare provider's everyday critical processes, and even a brief disruption to their work may have substantial negative consequences.
Many managers are, therefore, reluctant to make upgrades and adopt new tools, slowing down their organization's digital transformation. The way out is thorough planning and preparation for the system switch with all the required integration so it happens with minimum pain for the platform users. As discussed further, handling different individuals' reactions to change is crucial too.
Like in any long-term change endeavor, it is possible to lose momentum when the end goal is too distant or not as compelling as initially presented. It is, therefore, essential to establish frequent measurable checkpoints on the transformation journey where certain milestones can bring you closer to the future healthcare digital strategy state, and failures can help you correct course if needed.
A lack of leadership buy-in and weak organizational culture may hinder various change initiatives, but these issues become especially critical in digital transformation. Executive champions should support digitalization not in words but in actions, providing necessary resources to and empowering the agile teams in charge of digital projects to achieve faster cycles in product development.
Another common obstacle to digital acceleration is talent scarcity--both in quantity and quality. Healthcare organizations need sufficient technology specialists with the right skillsets to drive digital efforts. Alternatively, they can set up outsourcing partnerships with expert IT and digital consultation in healthcare companies, reducing the hassle of workforce recruitment and retention while lowering their costs on average. Some tech staff, however, must always remain internal.
Budget limitations can significantly slow digital healthcare experience adoption. Although investing in new technologies can lead to long-term cost savings and improved patient outcomes, the initial costs can be daunting for many organizations. To overcome this, healthcare providers can explore phased implementation strategies, where technologies are introduced gradually, allowing time for budget adjustments and minimizing disruptions to daily operations.
At CleverDev Software, we build custom solutions throughout the healthcare value chain, from patients' mobile apps to medication management software, and offer dedicated development teams. With expertise in system integration, we also deeply understand how the different platforms and elements of infrastructure work together to create a seamless experience for patients and staff alike.
To illustrate our track record in digital healthcare consultants and transformation, we are proud of delivering end-to-end healthcare software development services to a Texas-based healthcare provider covering a complete cycle of its business reinvention. Among the achievements of the 2+-year project, we integrated the company's billing processes with insurers, optimized administrative workflows, enabled professionals with remote patient monitoring capabilities, and enhanced patient engagement potential.
The transformation project has already doubled our client's patient base and generated over 1 million USD in additional annual revenue while creating space for further business expansion. Whatever your expectations and requirements for custom medical software, we can help you, too, to navigate the digital consultation in healthcare journey and realize the tech-driven financial, quality, and health benefits.
We hope this post makes it clear that no healthcare organization can afford to ignore the reality of accelerating digital health fueled by colossal changes on the demand and supply sides in recent years. Technological acceleration is taking place right now, and the forecast of doubled investment by 2026, which we mentioned in the introduction, proves that.
Hospitals, medical practices, clinics, and other care providers must continue to digitalize and integrate different steps of the patient journey or risk falling behind and losing customers to competitors--either fellow providers or newcomers from other industries--that better understand their emerging preferences.
Apart from the many benefits of digitalization, we have highlighted several challenges to overcome. The truth is that digital transformation is an enormous undertaking that only some organizations can accomplish on their own. For many healthcare providers, it makes sense to join forces with experienced partners from the technology sector who have worked on such projects elsewhere and know the common obstacles in advance.
Technology and Innovation Researcher
Since 2005, Andrey has been a tech trailblazer, passionate about making complexity accessible. He melds his extensive personal research with direct contributions from experienced engineers to craft enlightening and empowering content.
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