12 places hospitals are spending their hospital digital transformation budgets

Interesting research just released by McKinsey about hospital digital transformation spend. And it’s not all about EHR – but I think that’s probably because most have already done this.

The Summary findings:

• The survey indicates a significant interest in digital transformation
• Despite recognising AI’s potential, there is a gap in investment
• A shift towards more patient-centric and decentralised care approaches

Think through why?

Key Insights:

High Priority on Hospital Digital Transformation: 75% of health system executives recognise digital transformation as a priority but face resource constraints.

Not that surprising: limited budgets, insufficient skilled personnel and competing priorities within healthcare organisations, making it challenging to allocate adequate resources for comprehensive digital initiatives. May also struggle to attract and retain top digital resources around Data and AI, given competition for these people.

Potential of Artificial Intelligence: 88% of healthcare leaders see AI as the technology with the most potential, yet less than half have made investments in it.

The slow adoption of AI may be due to high upfront costs, lack of expertise (clinically, administratively and IT wise), concerns about data privacy and uncertainty about the return on investment. There are lots of papers out there researching impact of use of AI in healthcare. But perhaps not enough published examples of how AI has actually improved patient safety and driven cost savings in the business.

Investment Areas in Hospital Digital Transformation:

1. Virtual Health to Enhance Patient Experience and Access: 76%
• Investments in telemedicine and virtual care aim to improve patient interactions with healthcare providers, increasing accessibility and convenience for patients, especially in remote areas. This is generally in line with general ‘Stay Left Shift Left’ philosophy.  Virtual care also has potential to free up much needed capacity for more complex procedures/ care.
• Technologies such as video consultations, mobile health apps, and online patient portals are central to these improvements.
2. Revenue Cycle Management and Back-Office Automation: 70%
• Focusing on automating administrative tasks to improve efficiency, reduce errors, and lower operational costs, thereby streamlining financial and administrative processes in healthcare organisations.
• This includes improved integration and adoption of standards, the use of robotic process automation (RPA) and machine learning algorithms to handle billing and claims processing.
3. Digital Front Door: 62%
• This is a basic recognition of the patient as a digital consumer – who is expecting a very different experience to the traditional ‘at the beck and call of the hospital/ consultant’ approach. Enhancements in digital access points for patients, such as online appointment scheduling and patient portals, aim to simplify and improve the patient experience from the first point of contact.
• Patient engagement platforms including CRM and chatbots are key technologies driving these enhancements.
4. Acute Care Workflow and Throughput: 58%
• Investing in technologies to optimise patient flow and care delivery in acute settings, reducing delays and improving overall hospital efficiency and patient outcomes.
• Real-time location systems (RTLS) and electronic health records (EHR) systems are pivotal in these initiatives.
5. Ambulatory Care Management: 55%
• Hospital Digital Transformation solutions for managing outpatient care enhance coordination, monitoring, and follow-up, leading to better patient outcomes and more efficient care delivery.
• Technologies such as electronic medical records (EMR) and care management software play a crucial role.
6. Remote Patient Monitoring: 54%
• Technologies that allow continuous health monitoring outside traditional healthcare settings enable proactive management of chronic conditions and early intervention.
• Wearable devices, IoT sensors, and remote monitoring platforms are integral to these efforts.
7. Contracting or Value-Based Care: 51%
• Implementing digital tools to support value-based care models focuses on improving patient outcomes and cost efficiency, aligning provider incentives with patient health.
• Analytics platforms and population health management tools are essential for these models.
8. Virtual Health to Address Labor Shortages: 48%
• Utilising virtual health solutions helps mitigate the impact of healthcare labour shortages by extending the reach of existing healthcare professionals and services.
• Telehealth platforms and virtual care coordination systems are key technologies in this area.
9. Advanced Analytics, AI, Machine Learning, Generative AI: 45%
• Leveraging advanced data analysis technologies aids in clinical decision-making, operational efficiencies, and personalised patient care, despite current investment gaps.
• These technologies include predictive analytics, natural language processing (NLP), and AI-driven diagnostic tools.
10. Cross-Site Capacity Management: 45%
• Managing resources and patient flow across multiple sites improves capacity utilization and ensures that patients receive timely care in the most appropriate setting.
• Cloud-based capacity management systems, control rooms and inter-facility coordination platforms are vital technologies.
11. Robotics or Physical Automation: 40%
• Investing in robotics and physical automation enhances surgical precision, logistics efficiency, and overall operational effectiveness within healthcare facilities.
• This includes surgical robots, automated guided vehicles (AGVs), and pharmacy automation systems.
12. “Hospital at Home”: 36%
• Providing hospital-level care at home reduces the need for hospital stays, increases patient comfort, and can lead to better health outcomes through personalized, convenient care.
• Remote monitoring devices, telehealth platforms, and home health software are critical components.

Conclusion re Hospital Digital Transformation

There is no doubt that healthcare providers are switched on to requirement for digital transformation (and the associated investment).  For now, while AI may be seen as representing the biggest potential impact, investment in AI would appear to rank behind a number of other initiatives: in particular: virtual care, revenue management and digital front door. However it should also be noted that all of the vendors being used across any of these initiatives are looking to embed AI in their own applications and tools.

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