Hospitals and insurers have been splurging on digital in recent years, but a return on those investments is still not clear, according to a new report from PwC.
According to the consulting firm’s data, making the existing workforce more digitally savvy, and using technology for tasks previously performed by employees emerged were among the top two workforce strategy priorities for hospital, insurance and pharmaceutical executives. For years, the health industry has been criticized for its sluggishness in adopting new technology in the face of regulatory changes.
And for those reasons, the trend of lavish spending is set to continue into next year — even if the eventual payoff is uncertain, the study found, which surveyed 3,500 consumers, and hundreds of health sector executives.
“In 2020, the U.S. health system will continue its long journey toward digitalization amid calls for bold changes from the presidential campaign trail and warnings of a recession, both in the U.S. and abroad,” the report said.
Yet even amid what PwC characterized as health care providers’ “binging on data,” there are questions about how a boost in technology will actually solve some of the industry’s most pressing concerns.
“Many health organizations have yet to truly benefit from their digital investments,” PwC’s analysts wrote.
Generating ROI
Yet according to PwC’s study, the industry’s digital focus is largely in pursuit of convenience. Karen Young, the firm’s U.S. pharmaceutical and life sciences leader, pointed to the recent consolidation in all markets as indicators of the preparation to ramp up on more digital tools and analysis.
Gurpreet Singh, PwC’s U.S. heath services leader, told Yahoo Finance that to-date much of the investment has been into electronic health records or pilot programs. He expects that will shift in the coming years.
“We’re finding both with the product leaders and the experience leaders that they are investing a lot more in, and they will invest more in 2020, not just on pilots for doing simple things like investment in virtual care, but actually generating” a return on investment,” he said.
“We’re finding that the push on digital is an investment in actually being more efficient and, hopefully, creating capability that we all value which is convenience,” Singh added.
Yet with the industry plowing money into electronic record keeping, even more investment is needed in order to utilize some of the new platforms to their maximum potential.
The cost burden could be a tall order in a sector where spending will likely surpass $4 trillion in 2020, according to Centers for Medicare and Medicaid Services (CMS). And that astronomical sum belies the ongoing needs of patients already squeezed by rising costs.
That price inflation may tie the hands of insurers and hospitals, which may try to recoup those expenses by passing them along to consumers in the face of rising public pressure and regulatory scrutiny.
According to Singh, “many are now investing in [customer relationship management] capabilities and customer support and contact center capabilities, because (they) want to invest in the customer journey.”
He added that many organizations are relying on customer service executives — but few actually have a chief digital officer.
“In our minds, the chief digital officer is the union of the experience and the technology and bringing it together— it’s not just the CIO,” Singh told Yahoo Finance.
Young also highlighted the increased access to data that all arms of health care have— whether payer, provider or pharma.
The biggest growth has been in digital therapeutics — which includes monitoring kits and wearables, which has seen at least $12 billion invested in the past two years.
Despite all this collection, there have been very few examples of collection and large-scale analysis of the data.
“Across payer, provider and pharma, they are all capturing that data, and it’s who is able to decipher it, monetize it, use it to the best most efficient way, that’s where we feel they’re on the cusp of...solving for z,” Young said.
“They’ve got all the data, they’ve got all the inputs, but they haven’t quite monetized it, and are not (using) it to a competitive advantage,” she added.
Anjalee Khemlani is a reporter at Yahoo Finance. Follow her on Twitter: @AnjKhem
Read the latest financial and business news from Yahoo Finance
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.