Late last autumn, in preparing our January-February cover story on our State of the Industry Survey and its findings, Healthcare Innovation Editor-in-Chief Mark Hagland interviewed a variety of healthcare industry leaders for their perspectives on the survey results. Among those he interviewed were Tim Zoph and John Klare. Both are executives at the Naperville, Ill.-based Impact Advisors consulting firm. Zoph is a client executive and strategist with the firm, and Klare is a vice president. Hagland interviewed them last December regarding several key findings from our State of the Industry Survey.
Among survey respondents, 30.61 percent said that 0-5 percent of organizational revenues are being expended on IT; 34.01 percent said that 5-10 percent of revenues are going to it; and fully 35.37 percent said that more than more than 10 percent of revenues are being spent on IT.
As for trending, fully 66.67 percent of respondents said that their IT budget has increased over the past two years, while 25.85 percent said it’s stayed the same. Only 7.48 percent reported that it’s decreased in that time.
What’s more, when asked what impact the COVID-19 pandemic has had on IT budgets, only 15.65 percent of respondents reported that the pandemic has decreased their IT budget, while 40.82 percent reported that the pandemic has increased it; a further 43.54 percent said their budget has stayed the same during the pandemic.
Below are excerpts from the interview with Klare and Zoph.
What do you think of the results from the survey around revenues being spent on health IT and on budgets, in the current operational context, particularly in the wake of the COVID-19 pandemic?
John Klare: From my perspective, it’s an interesting result that budgets are increasing. It makes sense, because it’s a balance. No question that COVID has had a negative impact on health systems across the country. It’s been wildly different, though, from very serious impacts to less serious ones. But the net effect is that it’s been causing hospitals to have to reduce expenses. But one of the saving graces or key initiatives health systems have engaged in to deal with COVID has been digitization and automation, to prevent infection spread while expanding care. The one other observation I’d offer is that it will be interesting to see the impact on capital versus operating budgets. You’re seeing people freezing capital budgets.
Tim Zoph: Those results may not end up being reflective of what those budget needs are going to be in the coming year. Certainly, one of the ways the pandemic was mitigated was by putting additional money into virtualizing access to care, and that mitigated some impacts. But what you’ll see is continued margin pressure in healthcare, and I don’t think IT is going to be immune. So they’ll need to operate their core systems very well. So, standardization, modernization, and automation of information systems will continue to need to happen. Those systems are still fragmented and not optimized. So we’re seeing clients now starting to cycle back from this implementation to optimization. The need is to create capacity. There’s no better time to be brilliant at the basics.
And it’s important to understand that every market is different. Some markets are mature and competitive; others are just emerging. So this is highly dependent on the nature of your market and where you are. Our view is that markets can change very quickly, because you can quickly speed elements to market as you go digital. And markets can shift very quickly, and your market share can be impacted, if you’re behind.
I feel like this is really a formative time, but also a time of real transition in health. I think this notion of where are with virtual and digital care, we’ll see a continuing acceleration of that, and we’ll see patients interacting more virtually with their providers and health systems, and I’m bullish on what that represents for health IT; we got a real push on that in terms of the pandemic, and I think that won’t go away. And analytics will continue to drive care delivery advances. And I think process automation is coming. And in terms of discovery and research, we’ll see AI helping to move those forward. I’m as excited as I’ve ever been about the future of healthcare. Culture may be the biggest thing holding us back; technology moves fast, but organizations move slowly. And we need to be able to respond to this era of cultural change. And those that get out in front and respond to it, instead of leaning back, will be the winners in their markets.
We found in our survey that, with regard to where their organizations are on their journeys around analytics development, 37.41 percent of respondents described themselves as “advanced” in their analytics development, and 38.1 percent said they were “early on” in their analytics journey. Does it seem to you that patient care organizations appear to be moving forward quicky to harness analytics for pop health?
Zoph: I’m seeing analytics being harnessed dramatically now. One is for performance and capacity management, just to understand how and where you’re providing services. You realize that being a data-driven organization is really important, when you’re trying to determine how you’ll operate tomorrow. Second, the pandemic has had a big impact. So, what’s going on with my stroke patients? And mortality is up across the board. So organizations, facing limitations on how they’ll care for their patients, are really having to examine what’s going on with their populations. And the third element is related to health screening. If you look at the screening mechanism being used for COVID, the initial interaction for health systems is oftentimes asking a question, how are you feeling today? So using AI on the front end to the health system, has really been enabled, and I think that’s really going to stick.
Klare: It doesn’t surprise me that people have become increasingly reliant on analytics to make decisions on HC, particularly around population health management, but we’re seeing great consistency in terms of the leveraging of analytics. And the analytics are better and are improving over time. I question whether they’re consistently optimizing their use of analytics. I still think the big challenge in that space is alignment and action. Everybody’s making progress, but there remain challenges.
Zoph: There’s nothing like a crisis to cause you to be data-driven. When you’re in the middle of a fundamental market shift, it really causes you to ask whether you have the data and analytics to serve your patients and to succeed. And when you get into virtual and digital, it’s so important that the data be harnessed so that the data is more informed, more accurate, and more personalized. Organizations that will be the market winners will realize that data is fundamentally necessary in order to compete in the market. There’s this notion of “never waste a crisis”: people have been asking fundamental questions about why they don’t have the data needed to run their enterprise, and this pandemic has forced open questions around that, and really caused organizations to have to double down now on their data and analytics capabilities.
We also found that nearly 60 percent (59.15 percent) of respondents indicated that they have implemented care management programs at the primary care level, involving physicians and teams. And analytics and data are being used to support those efforts. Should that overall figure be higher by now?
Klare: I read that result as indicating that there’s no question about the great impacts and insight that data and analytics can provide around care management, and how it can be used to improve the health of populations. I’d go back to the fact that the real challenge for healthcare systems is more about the alignment of incentives and of providers to achieve goals. It’s all about operational change. And that’s an area where health systems really still struggle.
What’s more, that’s not a new struggle; it’s been ongoing for a long time. So analytics and data and technology haven’t caught up with the needs of the process. And one of the best ways to examine LOS is to hold multidisciplinary rounds. Right now, too many health systems lack the tools to genuinely facilitate multidisciplinary rounds. I’d like to walk into a patient’s room, touch a dashboard, and get an instant view of the patient’s case and be able to push a button and document the round and initiate orders. So it speaks to the difficulty of change management.
Zoph: And I think it speaks to the incentive issue. Capitated physician groups are really good at screening, for example, but they’re financially incented to do so. So part of this will really be where we’re at on this fundamental shift towards being accountable for health outcomes. You get really at it, when you’re required to do it. So, follow the money.
Physician group leaders are telling us that hospitals are behind them in value-based contracting because the hospitals still have incentives to fill beds.
Zoph: That’s right, the physician groups do it well, because the models incent acculturation.
Klare: It goes back to the issue of alignment; the incentives are aligned in independent medical groups, to do all of that, and in medical groups owned by hospital systems, the alignment isn’t there yet. People will do what you pay them to do. To me, that’s at the root of a lot of this.
Zoph: And what makes it work in multispecialty care: if you come into see a specialist, your specialist will flag that you’re due for a primary care screening.
In terms of incorporating the social determinants of health (SDOH) data into their population health and care management work, 45.3 percent of survey respondents said that they are already doing so, while 41.3 percent haven’t yet done so but are planning to do so, while only 13.3 percent stated that they have no plans to do so. Is that a glass half-empty or a glass half-full?
Zoph: I think that that’s a glass half-full. The sources of data are becoming more readily available, and you’re seeing that progress with the overall competence of the industry. Better data governance and management support SDOH data collection. And health systems are recognizing that they need to do this, and are consciously reaching out to acquire the data systems they need. So I see it as a glass half-full. You’re seeing the ecosystem of health getting built out.
With regard to artificial intelligence, survey respondents indicated that they’ve begun to adopt AI and machine learning tools in their clinical operations (33.1 percent), financial operations (30.28 percent), and administrative operations (25.35 percent), while 45.77 percent haven’t implemented AI in any area yet. Your thoughts?
Zoph: The chatbot and patient interactions in health screening, that’s a great example of the use of AI in care delivery, to help guide and navigate the initial contact with the healthcare system, and that’s a big change. The other area is support for diagnosis in diagnostic image interpretation. Our diagnostic capability continues to grow. And in terms of video capability, as we’ve extended the use of the eICU, you can actually monitor patients for fall risk and you can monitor patients in the room. So creating ambient information around what’s going on with your patients, is a really interesting area. NLP for documentation remains underrepresented. We’ve got to return physicians to the practice of medicine, and reducing their time in the record, has got to be part and parcel of how we improve the provider experience. And the final one: you’re seeing an amazing year of medical discovery, as with the development of the COVID-19 vaccines. We’re really understanding how to use data in drug design and in clinical trials. How do we speed discovery, and can we use AI to tap into existing records, and give us more intelligent use of data? So I think AI in support of clinical trials, including in terms of more rapidly enrolling patients, and integrating data into how we learn—the ability to get at existing records for these synthetic clinical trials, it’s all amazing.