Beyond the EHR

Several trends are causing health systems to adopt technology-enabled solutions to minimize cost and improve value. And, in response to rapidly changing consumer demands, many health systems are focusing on factors beyond price and quality to create customer-centered business models. Technologies such as EHRs and patient portals are often a key component of such strategies.

Many health systems are facing a margin cliff as the aging of the US population combined with lower reimbursement from government payers put pressure on traditional revenue sources.¹ This, combined with reporting requirements under the Medicare Access and CHIP Reauthorization Act (MACRA), has contributed to hospital consolidation in recent years. Health systems' ability to succeed and realize value after a merger or acquisition can largely hinge on capabilities to effectively collect, understand, and act on information.

The evolving market shift from payments based on volume toward payments that emphasize outcomes and risk is one of the largest drivers of technology adoption. Health systems need to derive meaningful information from data to monitor patients and reward providers throughout the care journey. New ways of collecting, processing, and analyzing data, coordinating care in and out of the hospital setting, and supporting clinicians throughout the care journey can be therefore critical.

While 96 percent of hospitals have adopted EHRs, the shift to value-based payments will likely require integration across platforms beyond just the EHR.² Consider the governance and decision framework in figure 1. Hospital technology strategies should reach across these different functions to support an enterprisewide strategy. For example, interoperability and integration will become increasingly important as consumers demand that their information be portable and as care coordination becomes a central feature of new payment arrangements.

Many health systems are already experiencing a shift in consumer demand. For instance, more than half of Kaiser Permanente's 12.2 million patients are registered on Kaiser's member website where they can view lab test results, fill prescriptions, send secure emails, request appointments online, and consult with doctors over video. Virtual interactions with patients rose from 56 percent of total interactions in 2015 to 59 percent in 2017.³

Deloitte Center for Health Solutions researchers used data from a sample of approximately 4,500 US hospitals to explore to what degree the shift in payment incentives drove technology adoption between 2012 and 2016. We focused our analyses on two central questions:

• Were hospitals that receive a higher share of revenue from quality and value contracts more likely to adopt technology that supports new required capabilities?
• Which technologies were hospitals with quality and value incentives more likely to adopt?

After dividing the hospitals into two groups, the Deloitte Center for Health Solutions ran regression analyses to understand the relationship between hospitals' focus on quality and value contracts and their adoption of different technologies using the governance and decision framework in figure 1.

In the regression models, Deloitte Center for Health Solutions controlled for hospital characteristics such as size, ownership status, system affiliation, and case and payer mix, as well as unobserved differences in local market conditions and common time trends such as those stemming from demographic changes and meaningful use incentives.

Are health systems responding appropriately as the move toward new payment models speeds up? Explore the Deloitte Center for Health Solutions' findings.