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CommerceHealthcare has released its fifth annual Healthcare Finance Trends report, and its insights range across regulatory, financial, technological and supply chain considerations. The report includes an in-depth analysis of research combined with practice experience and identifies consideration for the industry given multiple intersecting challenges in the year ahead. One trend that will continue to carry importance for health care leaders is the need for a digital transformation.
Digital transformation is fundamental to changes in the health care business and care delivery model. IBM’s website succinctly captures the goal: “Digital transformation means adopting digital-first customer, business-partner and employee experiences.” A leading forecaster believes 70% of health care organizations will rely on digital-first strategies by 2027, according to an International Data Corp. report titled Futurescape: Worldwide Healthcare Industry 2023.
Transformation efforts need to accelerate. One study by Huron Consulting showed that “digital, technology and analytics strategies exist for nearly all organizations, yet only 30% have begun to execute on those plans.”
However, one functional segment ramping up digital transformation is finance. According to a recent survey by Black Book Market Research, 94% of chief financial officers and senior leaders stated that such efforts will be at the forefront of financial operations and strategy for 2023-24, and 79% described it as an “absolute need” for “commercial stabilization and long-term survival of their health care organization.”
Advanced technology is gaining traction. According to a 2022 article by Information Age, titled “RPA and the rise of intelligent automation in healthcare,” many see optimization in combining robotic process automation, artificial intelligence and machine learning to create “intelligent automation.” Together, these technologies create algorithms to automate decisions that guide robotic software to perform financial actions and thereby reduce manual labor.
Getting to digital-first in finance and across the enterprise has several critical success factors.
These include sustained commitment, a platform-centric mindset and effective governance.
Some in the industry assert that few health care executives have developed digital strategies that go far enough into the future. Speed of change is also important. Health systems, hospitals and practices exhibit varying risk appetites and change rates. When asked to self-identify “transformation personas” in KPMG’s 2021 Healthcare CEO Future Pulse survey, a little over half the respondents regarded themselves as on the innovative “early mover” end of the spectrum, while the remainder will adapt as technologies prove themselves. Slower organizations likely will need to increase the pace.
Platforms, not point solutions
Implementing enterprise platforms rather than proliferating point solutions – tools that only solve specific challenges – is obligatory. According to an Accenture report on reimagining the health experience, organizations must be “prepared to compete in the platform economy as platform-based business models have changed the way we live, work and receive care.”
There are still too many tools and applications. A survey of top decision-makers at health systems conducted by Symplr software developers found that 60% use over 50 software solutions just in operations – and 24% have over 150. System integration is one answer. Use of application programming interfaces helps this effort substantially. API-first is fast becoming the norm among solution providers, with Vision Research Reports stating global API investments are expected to nearly triple by 2030.
Effective governance is vital to constructing a platform-based transformative model and to ensuring wide user adoption. Health care has seen the rise of new senior roles such as chief digital officer and chief transformation officer. These positions emphasize initiatives like ownership of technology success at the department level and devising user incentives.
To learn more about digital transformation in the health care industry and other key financial trends, the full report is accessible at bit.ly/CommerceHealthcare.
Lacy Martin is the treasury management sales team leader for Commerce Bank. She can be reached at firstname.lastname@example.org.
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