More and more, digital transformation is a term that eludes easy definition. For the healthcare sector, the meaning can refer to improving clinical decision-making by enabling data-informed decisions rather than intuition-based decisions, or using machine learning to deliver precision medicine or using artificial intelligence to improve detection of diseases, for example. Digital transformation also has a critical role to play in operational decision-making.
Digital transformation is not a one-off project or exercise. It is about continually adapting to the pace of change. It is important to think of digital transformation as a strategy that is always ongoing.
“There’s a misperception that digital transformation is about technology alone,” said Mandeep Maini, managing director of the Grant Thornton Healthcare Advisory practice. “It’s about connecting all aspects of your business, from patient engagement to supply chain and connecting the clinical and operational functions so that they work together seamlessly to improve both the patient experience as well as the provider and admin experience, and most importantly improve health outcomes.”
Digital transformation is not a one-off project or exercise. It is about continually adapting to the pace of change. It is important to think of digital transformation as a strategy that is always ongoing. “It isn’t necessarily a CIO-driven initiative,” Maini said. It’s about a culture of transformation, making the organization more efficient, agile, and able to respond to new technologies, regulations, requirements, and pandemics. “It’s always evolving.”
Where does healthcare stand today?
The COVID-19 pandemic brought new urgency to the need for digital transformation in every industry. Since then, the pace of transformation has accelerated everywhere, and healthcare was no exception. “With COVID, healthcare organizations everywhere were propelled into virtual care,” Maini says. “They needed to enable in-person and virtual care and make clinical and administrative applications available to providers and administrative staff at different facilities, including working from home.”
While some experts believe that healthcare industry trails other industries and needs to achieve greater digital transformation, progress is being made. “I would say the industry is on the path to digital transformation,” says Christopher Lilley, Grant Thornton national managing principal, Technology Solutions.
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The importance of data interoperability
As the digital transformation of healthcare evolves and the need to be more predictive and agile increases, data will be paramount in enabling more personalized patient experiences, new processes and new care models. For healthcare organizations to truly reap the full potential of their healthcare data, they need the ability to consolidate data from multiple functions and facilities on to a single platform.
Yet, one of the challenges of digital transformation in healthcare is interoperability. Many organizations continue to collect and store patient data in multiple disparate systems, and in multiple locations, making it difficult for stakeholders to access it to measure population health outcomes or drive value-based care and payment models.
“The problem is that many of these systems were implemented at different times with different standards,” Lilley said. The recent surge of M&A has triggered the merging of several different IT systems, further complicating operations for health systems.
That state of affairs is borne out by a recent College of Healthcare Information Management Executives (CHIME) study that found that a majority of respondents were working with too many tools and applications that are not interoperable. A majority (60%) of the respondents reported using between 50- and 500-point solutions to manage healthcare operations—a situation that most (88%) respondents said was creating stress and burnout, lost opportunities for cost savings, and challenges to patient care.
Many hospitals may have achieved transformation in discrete areas, including finance, vendor management, supply chains. But these duplicate, unintegrated systems leave stakeholders unable to use healthcare data in a way that provides timely access to information to help them improve the quality of patient care and optimize health outcomes.
Now, the need is to tie them all together. “To achieve this integrated perspective, you need common standards and a common language to tie everything together so transformation can happen around patient care, finance, vendor management, and supply chain,” said Don Amoruso, Grant Thornton senior associate, Transformation.
“We must reduce the redundancy of all of these applications,” Maini said. “Only then will we be able to facilitate and accelerate data transformation.”
With the increasing shift to value-based care, the need for interoperability is greater than ever. According to IDC’s Futurescape: Worldwide Healthcare Industry 2023 report, 70% of healthcare organizations will rely on digital-first strategies by 2027. What’s needed to get there is interoperable platforms, not point-by-point solutions.
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Migrating to the cloud
Migrating from on-premise systems to the cloud is the key to achieving end-to-end digital transformation. For healthcare, cloud migration can provide a host of benefits, including easier access to clinical and billing data for providers and patients, increased storage capacity and security, and precision medicine. By migrating critical applications from on-premise data solutions to a cloud platform, healthcare organizations can better take advantage of innovations like AI and machine learning.
A successful digital transformation initiative requires the creation of a data culture across the organization. “Everybody from the board on down needs to understand the value of data and encourage its use for improving decision making,” says Maini. “You need a governance structure, tools, technology, and trust throughout the organization that you’re speaking the same language to accelerate to the next level and maximize your investment. When you’re able to build data trust, you can start tackling those larger, more complex problems."
How FP&A teams can drive collaboration
The unprecedented changes that today’s healthcare organizations face demand new approaches to processes and people. The shift to value-based care, for example, requires accurate, up-to-date metrics. Ever-changing market dynamics and regulatory changes are driving the need for reporting that analyzes operational and efficiency metrics for scenario planning and for making decisions about reallocating resources.
With their ability to integrate operational, billing, and other data and provide it to stakeholders in a useable form, today’s financial planning and analysis (FP&A) teams can help move the healthcare organization to new levels of productivity.
New cloud-based enterprise performance management (EPM) systems are helping healthcare organizations implement and advance their cloud strategies and are quickly proving to be powerful tools for integrating financial data from ERP systems and clinical data from EHR systems to provide clinical and operational staff with the insights that can help them optimize clinical and financial outcomes.
“Ultimately, data and data projects have to move the organization in a couple of different ways,” Amoruso said. “Either by breaking it down in accounting terms – your income statement or balance sheet, managing costs, risk or growing market share – or by enhancing your clinical experience. One of those two.”
Digital transformation that brings the physical and digital worlds together seamlessly is successful. It is ongoing and affects every part of the organization not just the CIO’s office. It is a culture of adaptation to make healthcare agile and adaptive to the needs of the community, the marketplace and the economy. It is about providing transparency to operational and financial challenges and outcomes, so they can be addressed. Every provider has started on its digital transformation journey.
David Tyler is the National Managing Principal of Grant Thornton's Healthcare Practice. David oversees advisory, tax and audit services for the healthcare industry, collaborating with over 700 healthcare teammates to serve our 1,000 clients.
Chris Lilley is the Business Advisory Services principal for the East region. Based in Grant Thornton’s Philadelphia office, he has more than 30 years of experience using business process redesign and information technology to develop solutions to solve business problems.
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Mandeep Maini is Managing Director in Grant Thornton's Healthcare Advisory Practice.
Fort Lauderdale, Florida
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