Your Technology Strategy is a C-suite Imperative

July 20, 2024

By Pooja Solanki, Vizient Senior Principal

Being a health system CEO is not an easy task in today's environment. As hospital C-suites and their boards continue to face significant margin losses, labor pressures and cyber threats, they must simultaneously consider the need to redesign their business and operating models to stay relevant against disruptors and profitable as reimbursement shifts toward fee for value. Health systems need a dual transformation - and the role of technology has never been more important in solving the problems of today and tomorrow.

How should leaders rethink IT?

Too often, leaders think about the information technology (IT) category like any other indirect spend category and assume managing it is mainly about negotiating vendor pricing and controlling costs.

That could not be further from the truth.

Instead, leaders should take a portfolio approach to technology. While some areas can and should be rationalized and optimized around contracting for savings, others need higher investments.

Why is that? Because we will not cost cut our way through this transformation.

Health systems must retool to redesign care delivery, launch new diversified service lines, reach new consumers and drive more consumer loyalty through a digital patient experience. In fact, research conducted among 100 hospitals by Vizient partner Panda Health shows the top three reasons for digital technology investments are improving patient outcomes (67%), improving workflow and operational productivity (41%), and improving consumer satisfaction (36%).

How can health systems kickstart better digital enablement?

In response to the evolving need for, and the role of, technology in healthcare, the responsibility of the IT department is no longer just about securing infrastructure and ensuring employees have laptops and phones. IT leaders have been decision makers around some of the largest budgetary decisions in electronic medical record (EMR) and enterprise resource planning (ERP) system purchases in the past 10 years.

Now boards and CEOs must continue to support their IT leaders in driving the right return on investment by making IT leaders the "digital enablers" of their organization. Whether it is digitizing back-office or front-office processes or introducing digital care delivery pathways, IT departments have an important role to play.

How to get started? First, CEOs must build a governance model for strategic planning that includes IT with the strategy and service line/clinical operations leadership team. IT plays an important role in connecting the service line strategy to the operational and clinical workforce enabled by technology. Bringing in IT at the end represents a reactive approach to the technology roadmap. No service line strategy should be complete without a capability assessment that includes people, process and technology. A technology roadmap should be a byproduct of the strategy - and in more advanced organizations, technology capabilities lead strategy by creating possibilities for care models and revenue streams that were not possible before. This is an iterative and integrated process.

Data from 100 health systems shows the heavy influence and accountability in the C-suite around the technology roadmap so this becomes a C-suite imperative that is guided by the organization's strategy.

Source: Panda Survey

You have a roadmap. What next?

Digital enablement requires the right evaluation of capabilities across the organization and the ecosystem of existing or new partners, as well as selecting and negotiating partnerships with the right technology or digital health vendors.

We hear a lot about "death by pilot" across healthcare organizations. Well-meaning strategies and digital enablement efforts don't scale. They either run out of funding, don't yield a clear return on investment, or don't have the right program management and change management support to drive adoption broadly.

Here are three practical approaches C-suites can consider:

1. Spend management as a source of funding for growth investments. Think of your IT budget as a portfolio. There is a lot of opportunity in managing current and upcoming contracts or contract renewals to drive savings. That could come from optimizing your purchases through a value-added reseller, managed print optimization, telecom expense management, contract labor and/or overall IT workforce strategies, as well as software license management and rationalization.
   
   Given the increased decentralization of software purchasing, lack of data categorization and data clean up in the IT accounts payable/purchase order/invoice data and inefficiencies in IT vendor management, there are many near-term and ongoing opportunities to find savings from core third-party services and technologies that can alleviate budgetary pressures to fund a health system's new investments in digital transformation.
2. Set up the right governance and metrics around a digital program - not the digital technology or vendor. Ironically, digital transformation is not about digital technology - it is about people and processes. However, too often IT departments and procured vendors focus on technology implementation without any planned infrastructure around process design, people training and ongoing monitoring of the planned business or clinical outcomes from the digital program.
3. Be agile in implementation of change and communicate tangible quick wins early and often. Health systems and vendors frequently take a long time to implement a program and delay any benefit to the clinicians or patients by at least 9-12 months. A more agile rollout with greater tangible benefits and communication of quick wins along the way will better drive belief and adoption. Change management is not about slogans but about creating those peer-to-peer success stories that change behaviors.

It is imperative for boards and CEOs to understand the role technology will play in their health systems and ensure they have an end-to-end approach to their digital enablement that is rooted in the system and service line strategy and funded in part through practical and portfolio-based spend management in IT.

IT and digital leaders in health systems have a real opportunity to be the digital enablers of their organization by collaborating with strategy, clinical, operational and procurement/supply chain leadership on this multi-year journey from design to execution.

Panda Health transforms how health systems connect with, explore and adopt leading digital health technologies that improve the lives of patients and providers. The independent survey cited in this blog was conducted in February 2023 and explored the current objectives and challenges that 100 health system leaders face related to digital health.

Learn more about Vizient's expanded agreement with Panda Health that expands the array of digital health technologies and consulting services available to Vizient member providers.