Healthcare ICT customer perspectives: There is room for optimism

Charlotte Davies, Lead Analyst, Healthcare & Life Sciences

Attitudes toward the use of ICT within healthcare vary depending on experience and belief. Of course, this is true of attitudes toward technology adoption in general, but the healthcare sector has always lagged considerably behind other verticals on the ICT development road.

Our latest customer survey reveals a wide spectrum of adoption levels, strategies, and budgets around the world. Overall, there is room for optimism.

We see a growing realization of the potential of ICT to drive better and more cost-effective healthcare reflected in the emergence of the CEO, not the CIO, as the main influencer of purchasing decisions.

A noticeable improvement in budget expectations for 2013 is allied with a clear expectation that IT will raise efficiency in the longer term, with customers willing to pay more for solutions that demonstrate concrete longer-term value. This should encourage vendors, as it demonstrates that more hospitals are starting to recognize the strategic importance of ICT to healthcare transformation.

The pressure on healthcare budgets provides challenges and opportunities for vendors

In the UK, the National Health Service (NHS) has been targeted with finding a massive £20bn in productivity gains by 2015. In a survey of 45 NHS finance directors conducted in September 2012 by the Kings Fund, an independent UK-based not-for-profit organization that produces research and analysis on healthcare, 27 of them felt there was a very high or high risk of failure in achieving this target, while only four assessed little risk of failure.

One of the key messages in a recent report by the Nuffield Trust research program, Buying time: What is the scale of the financial challenge facing the NHS and how can it be met?, is that in order to avoid cuts to the healthcare service or a fall in the quality of care after 2014/2015, either the NHS must achieve unprecedented sustained increases in productivity or funding will need to increase in real terms.

These challenges, which are not isolated to the UK, produce a real dilemma for finance directors, CIOs, and CEOs of healthcare organizations. On the one hand, they know that spending on ICT is integral to achieving increased productivity and better outcomes in the long term, but on the other hand, they are under immense pressure to justify every penny of spending on IT.

The dichotomy is reflected in the varying budget expectations for IT of the 200 hospitals we surveyed in nine different markets around the world. In all regions organizations showed budget growth and shrinkage: a minority (3%) reported a significant decline, 14% saw a small decline, 36% had flat budgets, 42% a slight increase, and 7% reported a significant increase.

Demonstrating benefits is essential, but strategic vision is just as important

The reason for this variance is shown in how investment in ICT is regarded by individual organizations and at a national level. At a recent Cisco roundtable, the CIO of Seattle Children’s Hospital explained how his decision to join the organization was based on its progressive approach to IT adoption.

He referred to the central role of ICT in driving improved outcomes and efficiency in the hospital, citing the latest example of clinicians saving at least 45 minutes per day through single log-on and fast application performance following the deployment of a virtual desktop solution from Cisco.

Contrast this with the diverse views on the benefits of telehealth (which, in our survey, globally accounted for a surprisingly high 10% of IT spending) in terms of making a sustainable business case.

The companies involved in deploying telehealth solutions, such as Philips in the US and the T3 Consortium in Northern Ireland, emphasize a number of success factors: commitment to a long-term telehealth strategy, which involves “baking” telehealth into clinical workflows, and – the major factor currently lacking in many implementations – deployment at scale.

Conversely, in emerging markets, where there are much more limited medical resources and remote populations, the business case is proving easier to make.

Strong growth in mobility and EHR adoption underlines the importance of advocacy by individuals and governments

We found a marked increase in mobile health application usage since last year’s survey. Today, 41% of hospitals are using text message reminders compared to 24% in the previous survey. A staggering 53% of hospitals have implemented EHR access on mobile devices compared to 18% previously.

Mobile device penetration in hospitals is growing. A number of organizations have dual policies in place, in line with the typical model (gradual rather than wholesale change) of bring-your-own-device (BYOD) adoption. There is no doubt that end users themselves are instrumental in this growth, as clinicians seek increased mobility, reduced administration, and better access to data and communication on the move.

EHR adoption is also progressing, particularly in markets where governments are driving meaningful use: our survey showed that EHR spending still accounts for the highest percentage of IT budget globally.

A recent report from the research arm of Healthcare Information and Management Systems Society (HIMSS) measured the sophistication of hospital EHR systems by conducting surveys and comparing reported data against its Electronic Medical Record Adoption Model (EMRAM), which classifies an institution’s level of health IT adoption, and found significant growth in the number of hospitals progressing up the adoption ladder.

These trends combined highlight the importance of both a bottom-up and top-down approach to driving smart ICT usage further into organizations’ modus operandi.

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