More than 70% of digital health decision-makers at provider organizations say they’d look to their existing EHRs for tech solutions before searching for outside vendors, according to recently research from global consultancy, Bain & Company.
Those interested in outside solutions are looking to save money. Revenue cycle management beat out security, patient intake and telehealth investments in a survey of providers from Bain and healthcare IT research firm, KLAS.
“It’s no secret or surprise that health systems remain under a tremendous amount of financial, operational and strategic stress and pressure right now,” said Eric Berger, a partner in Bain & Company’s healthcare and private equity practices.
Health systems were built to withstand recessions, but many were not prepared for inflation, Berger said. “You see this bifurcation in the market,” he said. Smaller systems are pulling back on investments out of necessity.
“The big theme here is you just get sucked into a vortex of thinking only about your EHR platform, which is obviously incredibly challenging and daunting, but there is a really vast and impressive world of additional point solutions that exist beyond Epic, Cerner and Meditech," Berger said.
According to the report, smaller health systems were less likely to rate IT the ‘most critical’ strategic priority.
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Other, more balanced health systems are leaning into digital investments that increase efficiency and cost savings.
Berger said providers care more about short-term, more immediate returns. “There has to be some very clearly defined ROI story that links to financial or operational considerations that these decision-makers have,” he said.
Regardless of the immediate effect a digital health solution has on a provider’s bottom line, more than half reported struggling to understand and evaluate all the market has to offer. One in four say they are too busy with their current tech stack to keep up with the market options.
“[Providers] get bombarded with emails or solicitations from all these new technologies, all of whom claim to be the best thing since sliced bread,” Berger said.
Still, some larger providers are searching for out of the box solutions. Earlier this year, LifePoint, a Brentwood, Tennessee-based health system, partnered with Cadence, a remote care management company, on a remote monitoring program.
“Do people actually use it? That's where I think a lot of digital health companies really fall short. You can kind of get to the one-yard line, but if someone doesn't use it, it's almost like what's the solution good for," Jessica Beegle, chief innovation officer at LifePoint Health said in August. “Behavior change is hard, regardless of industry, but I think healthcare gets an especially bad rap.”
Despite recent headwinds, seed and early-stage investments in digital health show few signs of slowing down. After setting records in 2021, the number has been even higher this year.
According to data from Digital Health Business and Technology, 286 Seed and Series A venture capital deals occurred through the first three quarters of 2022 — the highest total ever recorded. Last year, there were 256 Seed and Series A venture capital deals through three quarters.
“There’s more than 11,000 digital health companies out there right now,” said Jared Antczak, chief digital officer at Sioux Falls, South Dakota-based Sanford Health. “It can be really overwhelming to try and pick your spots as an organization to make sure that you're going to get the best value for your patients and a good return on investment.”
This story first appeared in Digital Health Business & Technology.