Successful digital transformation in healthcare

“Disruption,” as the act of technology altering the processes of an industry has come to be known, has hit most areas of life and healthcare is no exception. Disruption sounds negative or scary, but really it’s an exciting opportunity for providers and the healthcare industry at large to rethink care delivery and improve patient outcomes.

Navigating through disruption and coming out on the other side with a stronger system involves more than implementing the right list of tools. It takes committing to change, examining legacy processes to bring more data points to evolve what we know about patient outcomes, and working with partners to bring the full industry forward.

Arcadia’s Chief Product Officer Nick Stepro and Fortune 2 Executive, Public and Private Company Board Director, Digital Transformation Thought Leader, Operator, and Investor Phoebe Yang share how emerging technologies, AI, and the inevitable change caused by digital transformation can clear new pathways to how we care for patients in Episode 7 of Season 2 of The Schema. Watch the full episode, available now, or catch-up on the complete series.

Below we outline key factors in successful digital transformation: social determinants of health, prioritization of resources, and the need for a ‘change culture’ headed by leadership.

Social determinants of health are strong predictors of successful patient outcomes

“We know that clinical data and claims data are retrospective…What we found was that the most predictive data that we had was not claims or clinical data. It was in fact social determinants of health [SDoH]. If you are dependent on an hourly wage, you're probably not going to go to the next doctor's appointment. If you don't have a working hot water heater in your home, you're probably not going to follow the dietary recommendations being made. So there are lots of things that we can utilize and leverage in order to both predict, but also impact those outcomes in a different way.”
—Phoebe Yang

The Covid-19 pandemic laid bare many disparities in healthcare that have existed for a long time. Addressing the many and varied systemic issues is complex and will take time to sort through. Early steps aim to use the vast amounts of data available to understand patients in different ways and build, or in many cases, rebuild trust. Beyond clinical and claims data, SDoH data will be a driver toward more whole person care.

Social determinants of health data have given healthcare providers an increasingly accurate look at patients’ health. We now have more than just a static view of their clinical state; we have insight into other aspects of their well-being. Knowing not just about their physical conditions, but their life outside of the exam room and challenges they face can help providers tailor treatments or provide solutions that lead to better health outcomes.

Lasting innovation is created by the openness to trial and error, collaboration, and prioritization of resources

“You have to be willing to try new things and you have to be willing to fail if you're going to really arrive at lasting innovation. As things begin to thin out and priorities begin to take shape, I think it forces more thoughtful approaches around collaboration. Because when you're operating in an environment of abundance, sometimes you don't have to make those priorities and you don't have to collaborate. I think it's a very healthy thing for us to have to prioritize and really give some serious thought to what our partners potentially offer us and what we bring to the table.”
—Phoebe Yang

The massive amount of private equity capital invested in healthcare in recent years has led to progress as well as a substantial amount of failure.

Failure isn’t always a bad thing. If you’re not willing to try something that may fail, you're never going to reach lasting innovation. However, having unlimited resources to try anything isn’t always the best road to innovation either. Limiting what you can invest in means you have to think more strategically about those investments which could be very positive for healthcare.

Partnerships between incumbents who have institutional knowledge and trust and disruptors who are working on cutting edge ideas are the ideal formula for innovation. Private equity can enable digital transformation by pushing strategic investments that facilitate partnerships between those who understand the dynamics and incentives of the industry and those who bring fresh approaches.

Digital solutions don’t work unless culture change is ingrained in the organization from the top down

“There are thousands of digital solutions out there to impact healthcare, and many of them are very, very strong. But unless you start with a common key ingredient for adopting these solutions, you're not going to be successful. And that common key ingredient is, culture change, a culture of wanting to innovate and adapt and advance and move forward…unless from the very top of the leadership on down, that culture change is ingrained into everything that we do, the change doesn't happen.”
—Phoebe Yang

Tools like cloud-computing are going to enhance healthcare organizations’ ability to care for patients, but implementing cloud-computing tools on their own and expecting change won’t be enough. The implementation has to be coupled with an organizational mindset of innovation that is instituted from the highest levels of leadership down. There is not one appointed chief innovation officer who handles innovation while the rest of the team continues with the status quo. The CEO, the chief clinical officer, the chief financial officer, and all others are also chief innovation officers.

Leadership has to push this mindset across the spectrum of the organization, empowering all team members to innovate. No one person or group can accomplish it alone. The challenge is simply too complex and involves too many areas of the organization. All must collaborate to achieve these goals.