As much as technology is changing the way we approach our own health—from fitness apps and wearables to online health information and support groups—it still has a long way to go in making healthcare more effective and efficient. Globally, private and public sector healthcare providers achieved only $64 billion of Digital Value at Stake in 2015. Considering how hard every healthcare system in the world is working to improve, that’s just not good enough. The healthcare sector has been comparatively slow to adopt digital capabilities. To some extent, this results from the ethos central to modern medicine: “First do no harm.” Yet as the pace of digital disruption across all industries increases, the gap, as well as the missed opportunity, is getting more obvious. That doesn’t mean that healthcare providers aren’t innovating. To the contrary, successful pilot projects that incorporate new technologies abound. The challenge for many healthcare organizations is to extend those pilots across their entire operations. At the same time, they must decide which investments will deliver the biggest returns and support future innovations. In all of these areas, technology tools are critical, but not sufficient, enablers of change.
Here is where we see the biggest potential for digitization to deliver bottom-line impact in healthcare organizations. All of these capabilities, as described in the use cases evaluated in our model, have something in common: they bring significant benefits, yet inspire few headlines.
1. Retooling the healthcare workforce
Labor productivity plays a central role in the healthcare cost equation. That’s true for all workers in healthcare, clinicians or not. Digital capabilities have the power to reshape healthcare delivery: increase collaboration, streamline communication, eliminate unnecessary work, and reduce—even eliminate, in some cases—the need for travel. Taken together, we refer to these capabilities as “Next-Generation Workers.” Globally, they have the potential to generate over $182 billion in profit to 2018 and well over $1 trillion through 2024. It’s easy to understand how capabilities like telecommuting, mobile collaboration, and bring your own device (BYOD) can drive significant benefits among back-office and administrative staff in healthcare organizations. After all, these are the same kinds of benefits we see in more traditional “corporate” jobs. The benefits in this area alone are massive. What gets less attention is how the same capabilities are facilitating new ways of working for clinicians and other caregivers. Most of us tend to think of telecommuting and remote collaboration as “working from home.” That’s rarely the case for doctors. Instead, consider a doctor working from your home—if, say, you’re recovering from a recent stroke. With such capabilities, your neurologist can consult your medical records, add notes based on her follow-up observations, and ensure that the rest of your care team receives a timely update of key information. In this case, the advantage comes through facilitating travel—to patients’ homes—rather than eliminating it. The result is both increased patient satisfaction and reduced cost of follow-up care. That has been the experience of one prominent American teaching hospital’s stroke clinic. “Hospital at Home” programs around the world, including in the United States, Canada, Australia, England, and Israel, have seen similar results—including better patient outcomes.
Mobile collaboration can also make effective, asynchronous communication within a peer group possible—as in the case of University of California, San Francisco’s Tumor Board. In the past, colleagues analyzed individual cases on large conference calls that the attending physician might or might not be able to attend. Anyone unable to be on the call simply missed out. Now, this analysis takes the form of threaded discussions and direct conversations that document important questions and opinions for everyone to reference after the fact. These same digital capabilities enable care teams to work together more effectively, in closer coordination with patients and with each other. The benefits to patients and healthcare providers are dramatic. Remember the “sexy” stuff we talked about earlier? That bit about facilitating doctor-patient interaction through telehealth and remote monitoring? The same technology tools make that possible as well. Add that piece to the puzzle and it generates a further $2.6 billion to 2018 and $10.9 billion by 2024.
These numbers are only a small fraction of value to be gained from using these digital capabilities beyond patient interactions. But the bigger point is that all of these uses of digital collaboration and communication taken together are changing behaviors and transforming how healthcare is delivered. Now that really is sexy.
2. Streamlining asset and inventory management
The impact of digital capabilities on the work of healthcare extends beyond collaboration and communication. Tracking medical equipment and managing inventory are both resource- and time-intensive tasks—and much of this burden falls on nurses. Reducing the amount of time a nurse spends tracking down equipment by just 15 minutes per eight-hour shift would generate almost $22 billion in Digital Value at Stake to 2018, and well more than $92 billion through 2024. This equipment search capability is a great example of the Internet of Things at work. With a medical-grade network and sensors or smart tags on every piece of equipment, a smartphone app can quickly and easily locate the necessary device. With equipment tracking in place, it’s an incremental step to reduce equipment loss and theft. Go one step further and you can perform predictive maintenance on equipment, tracking use of each device and avoiding unforeseen downtime. Think of the way Rolls-Royce tracks the performance of its aircraft engines, contracting with airline customers to reduce unplanned maintenance.
“Just-in-time” planning can be applied to managing consumables and perishables in healthcare organizations as effectively as in a manufacturing firm. This means getting the right amount of inventory just before it’s needed: not too early, not too late. By getting the timing right, you avoid either tying up capital in excess inventory that could go bad before it’s used, or running out of critical items such as bonding cement or expensive vaccines. All of these examples depend on the ability to track usage, predict needs, compare options, and automate parts of the process. Taken as a whole, the digital capabilities to improve asset and inventory management drive an impressive $35 billion of digital value to 2018, and close to $148 billion through 2024.
3. Creating a systems-based approach to health outcomes
Call it patient centered, outcome based, or value based. Regardless of the moniker, the most sweeping change coming to healthcare systems around the world aims to provide better patient outcomes at lower cost. In this approach, healthcare providers coordinate across the system, using data and evidence to make decisions that use resources more effectively to get patients healthier faster. Decisions are made based on what delivers the best outcome for the patient, not what generates the biggest reimbursement. The state of Arkansas, one of the early experimenters in Medicare’s shift from volume-based to value-based reimbursements, has seen promising—if imperfect—results from this approach. And while some of the most striking examples come from the United States, this phenomenon applies across the developed world and beyond. Indeed, delivering better results with a necessarily limited budget was one of the major drivers behind the move to local general practitioner (GP) commissioning in the United Kingdom’s National Health Service. Who knows better where to place systemwide resources for the local population than the GPs who see them regularly?
Electronic medical records, combined with claims and reimbursement data, underpin much of the value-for-cost analysis. But collecting a wide array of data enables some seemingly small-scale decisions that have a big impact. For example, tracking patterns in hospital admissions and patient volumes makes it possible to optimize staffing levels. That reduces unplanned overtime, improves staff morale, and ensures appropriate staffing levels at peak times. It also generates digital value of $21 billion to 2018 and nearly $89 billion through 2024. When you add automated medication administration, reduced medical errors due to improved information flows, and—in the United States, at least—improved claims management, Digital Value at Stake for data and analytics use cases rises to just under $34 billion to 2018, and $142 billion through 2024.
4. Building patient trust and engagement
For any attempt at outcome-based healthcare systems to work, patients must be actively engaged members of their care team. This means improving communication with patients (let’s face it, there’s no technology that can substitute for an effective bedside manner), putting them in control of their own medical information, and designing processes that set expectations for patient involvement. Making it easier for patients to communicate with their healthcare providers plays a major role in improving engagement. Something as simple as integrated appointment booking systems gives patients greater control. The benefits that result from reduced no-shows might be fairly small for healthcare providers—a bit over $3 billion through 2024—but the upside for patients and the system overall is huge. If we consider the societal benefits of outcome-based healthcare and engaged patients, the Digital Value at Stake is compelling. We evaluated the financial impact—to payers, insurers, healthcare providers, and the economy overall—of four use cases: reducing re-admissions rate following acute care, facilitating in-home elder care, chronic disease management, and reduced absences from work. These four use cases could generate $124 billion to 2018, and $505 billion through 2024. The consistent thread through all of these use cases is that they depend on actively engaged patients and carers. Without their participation, achieving these goals on any significant scale is impossible.