Health Care's Future IT Value Proposition

Posted by Don McDaniel on Sep 7, 2017 11:00:00 AM

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McKinsey & Company recently published the results and analysis of a global survey on IT’s future value proposition. While many expect IT, and CIOs for that matter, to play a growing role in improving business results, IT still suffers from performance issues and unfulfilled promise. The survey suggests that CIOs must raise their skills and influence within their respective organizations. Of the 709 respondents, many felt IT will contribute most through innovation and integration – that is, better integrating solutions that support business results. As I read this and applied it to the healthcare industry, I couldn’t help but think about how these issues related to the current malaise – an ambivalent sense that we’re not sure whether technology is advancing progress, or further complicating it. There are more than a couple of general conclusions from the survey that apply explicitly to healthcare.

First, integration seems to be even more important in industries with legacy technologies, and the healthcare business is full of proprietary, siloed, premise-based technologies. One explicit use case in today’s migration to value-based medicine is the challenge of providing relevant, timely information to caregivers operating in delivery environments with multiple electronic health records. There is no easy way to build sustainable integration today, but this must be solved in the future.

Second, the movement to the cloud, given the current tethered stance in health care, led to the partial or complete outsourcing of the IT function. In the study set, across all industries, some 60% of the respondents feel moderate or more that IT outsourcing to third parties will define the future; over 40% believe that IT is significantly or fully replaceable by third-parties. In healthcare, for the reasons discussed above, and the need for data liquidity and a standards-driven data environment, I think there is a very good chance that “expert” IT infrastructure and analytics firms will develop and grow to meet the demands of the “As-a-Service" health economy.

Third, CIOs are more important than ever and CMIOs will become mainstream – finally evolving to a point where the weird industry obsession with separating clinical, financial and administrative data will end. The CIO, after a generation of moderate image improvement, still must evolve into a more strategic player. Information data and workflow are not discrete elements of the organization’s strategic plan – they are infused into every strategy. As with all industries that modernize, industrialize and marketize, the need for deep technical computing knowledge will commoditize, and the need for infrastructure leaders will sunset. The new CIO will have to move from automation to cognition – in healthcare, this will require the full integration of not just traditional computing power, but devices, appliances, biologics, and more.

Finally, CIOs will become real members of the Executive team, with direct reporting to the CEO. The legacy of computers in the U.S. healthcare industry, namely as instruments to get bills out-the-door and manage finances, often aligned the CIO with the CFO. The CIO was the repairman/the plumber and served in a very transactional role. The CIO of tomorrow will be a key strategic barometer of organizational direction and success.

I agree with the authors in their conclusions, namely that healthcare CIOs need to rewrite their job descriptions, address performance issues and focus on integration of data and tools across their businesses. These successes will enable them to chart their own way in the new health economy.

 

Don McDaniel Website Photo - 2016.jpgDon McDaniel, Vice Chairman

As Vice Chairman, Don works to refine, communicate and support Continuum’s vision, strategy and growth. Over his professional career, Mr. McDaniel has played leadership roles in a number of health care, insurance, and technology organizations, and is recognized as a thought leader and strong executive manager. Mr. McDaniel has expertise in the areas of health economics and markets, innovation, entrepreneurship, business and strategic planning, and the strategic deployment of health information technology.

 

 

Topics: Value-Based Healthcare, Healthcare IT, IT and analytics, Role of CIO

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