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2021 Health IT Predictions: Fasten Your Seatbelts for Dramatic Transformation

Authors: Peyman Zand and Daphne Palakie

2020 may be referred to as the year of transition as it was a remarkable year from many different aspects. The impact of the pandemic strained the healthcare industry like no other time in recent history. Still, it has also allowed the industry to exercise agility, overcome challenges while remaining focused on patient care. Take as one example the speed at which organizations rolled out or expanded telehealth programs.

In our work with the CereCore CIO Cohort and EHR clients of all sizes, we have seen the impact of the economic downturn, new retail giants entering the healthcare market, and health system leadership’s resilience in accelerating digital and operational transformation. If we can sum up the health system CIO focus moving forward, it would be that we are entering an age of dramatic transformation. Here, we discuss these focus areas from our unique perspective collaborating with health system CIOs across the country.

  1. Enabling the continuum of care with digital transformation: The goal continues to broaden the continuum of care, reduce the rate of readmissions, and create seamlessness across provider organizations. But to accomplish this, CIOs are focused on increasing the pace of practical innovations that enable this care. In a pre-COVID survey of health system CIO priorities, digital transformation activities such as EHR optimization and cloud migration were top priorities. Innovations in advanced analytics and artificial intelligence were also noted as priorities.  However, rolling out these innovations and new digital services is only half the battle. CIOs understand that they have to build a sustainable and scalable support model for these systems.  Finally, CIOs also expressed that these initiatives must be accomplished at a fraction of the operating and capital costs. For that reason, no application or infrastructure is sacred as they evaluate organizational redesign, IT asset consolidation, application rationalization, and standardization.
  2. Operational transformation for new business strategies: The National Rural Health Association (NRHA) reports that 47% of all U.S. rural hospitals are operating at a financial loss. Many of these hospitals provide critical access to care for the community. Operational excellence along with sound business strategy will be crucial to survival. The focus remains on assessing the workforce, minimizing expenses, and backing out of capital investments. Healthcare leaders are also beginning to seek out strategic partnerships with neighboring facilities and third-party outpatient providers. Larger health systems are analyzing growth plans due to the elective procedure fallout in Q2 of 2020. Indications show that for-profit organizations will take an aggressive stance towards business recovery and are willing to take on high risk. These new business strategies will open doors for IT scalability opportunities that other industries have enjoyed for many years. Examples: Our incremental approach to cloud migration and adopting managed services will be challenged as will standardization and rationalization of the existing systems and contracts.  The cost of managing cybersecurity is going to be too great and it continues to grow.  Major partnerships with key players in the market are the only way to remedy these challenges.  We will finally be able to measure healthcare sector productivity factors with other sectors.
  3. Mental health services growth: The need for behavioral health providers and hospitals has significantly heightened. The CDC reports considerably elevated adverse mental health conditions associated with COVID-19 for several population groups, including essential workers. Pressures of balancing work demands, virtual learning for children, and possible job loss add up as stressors. Many have lost loved ones during this pandemic and front-line healthcare workers are mentally and physically exhausted. In a mid-summer conversation with Dr. Albert “Skip” Rizzo from the University Of Southern California Institute for Creative Technologies (ICT), he predicted that the pandemic will increase the need for innovative mental health therapies for front line healthcare workers and further integrate behavioral health services. Dr. Rizzo’s prediction is based on his work with high-risk groups such as the Los Angeles Police Department and war-time veterans. This growth is highlighted by a recent CereCore EMR implementation for a newly constructed behavioral health facility in Middle Tennessee.
  4. Advanced technologies: The rapid adoption of telemedicine is only a small piece of the advanced technologies we expect to be employed in the management of patient health. This includes Advanced Analytics, Artificial Intelligence, Robotic Process Automation, wearable devices, and a whole host of other advancements that are already here. New entrants and platforms will change how we collect and analyze data to predict patient inflows, supply shortages, and a whole host of other predictions way before they become reality.  Organizations will be able to use these technologies to track patient health, monitor population health and as a result bridge some of the daunting tasks of the past such as improved interoperability and finally being able to move to value-based care.
  5. Non-traditional mergers and acquisitions. Modern Healthcare reports that mergers and acquisitions are at the lowest it has been since 2015. The pandemic halted purchasing; however, deals in play remained on course with some minor delays due to regulatory approvals, remote deal-making, and conducting due diligence in an alternative manner. Non-profits are not showing interest in expanding their footprint. They remain focused on reinvesting in the mission while other non-profits and academic medical centers are evaluating their approach to recovery, with M&A discussions on the table.
  6. Not only do we predict an increase in M&A activity over the next several years but an acceleration of non-traditional M&As and new entrants into this sector from industries such as retail. New players are present in the increase in payer-provider M&A activities, retail pharmacies such as CVS and Walgreens providing health care services, Amazon and Walmart providing health programs and insurance options. Healthcare CIOs face a vastly different world that requires them to accelerate transformational plans or ditch them altogether and develop new ones. The good news is that these new players will introduce best practices, economies of scale, and revenue models not previously seen in the healthcare industry.

As other industries have faced digital disruption and rapid transformation, healthcare now faces its turn. Ultimately, this will result in lower costs and improved outcomes. But it will be a bumpy ride for health IT leaders, so fasten your seatbelts.

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