CommerceHealthcare® has released its fifth annual Healthcare Finance Trends for 2023 report. 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.
The report’s key insights range across regulatory, financial, technological and supply chain considerations.
The full article is accessible at CommerceHealth.com/2023FinancialTrends, but one trend that will continue to carry importance for healthcare leaders is the need for a digital transformation.
Digital transformation is fundamental to healthcare’s business and care delivery model changes. 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 healthcare organizations will rely on digital-first strategies by 2027.1 Transformation efforts need to accelerate. One study showed that “digital, technology and analytics strategies exist for nearly all organizations, yet only 30% have begun to execute on those plans.”2
One functional segment ramping up digital transformation is finance. According to a recent survey, 94% of CFOs and senior leaders stated that such efforts will be at the forefront of financial operations and strategy for 2023-2024, and 79% described it as an “absolute need” for “commercial stabilization and long-term survival of their healthcare organization.”3
Advanced technology is gaining traction. Many see optimization in combining robotic process automation (RPA), artificial intelligence and machine learning to create “intelligent automation.”4 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.
Commitment
Some assert that few healthcare executives have “created digital strategies that look far enough into the future.”5 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,” a little over half regarded themselves as on the innovative “early mover” end of the spectrum, while the remainder will adapt as technologies prove themselves. Slower organizations will likely need to increase the pace.
Platforms, not point solutions
Implementing enterprise platforms rather than proliferating “point solutions” is obligatory. 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.”6
There are still too many tools and applications. A survey of top decision-makers at health systems found that 60% use over 50 software solutions just in operations (24% have over 150).6 System integration is one answer. Use of application programming interfaces (API) helps this effort substantially. API-first is fast becoming the norm among solution providers, with global API investment expected to nearly triple by 2030.7
Governance
Effective governance is vital to constructing a platform-based transformative model and to ensuring wide user adoption. Healthcare has seen the rise of new senior roles such as Chief Digital Officer and Chief Transformation Officer, positions focusing on initiatives like ownership of technology success at the department level and devising user incentives.
To learn more, access the full 2023 Healthcare Finance Trends Report on CommerceHealth.com/2023FinancialTrends.
CommerceHealthcare® solutions are provided by Commerce Bank.
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Alejandro Culton