Selecting the right tech consultant can make or break a healthcare practice\'s digital transformation journey. However, many CEOs and directors, despite their vast experience, often fall into unforeseen pitfalls when choosing tech consultants. This article outlines seven critical considerations that healthcare leaders should note to safeguard their investments.
- Don’t Overlook Cybersecurity Expertise in Favor of Flashy Features
Many healthcare practices are quick to be captivated by cutting-edge features and sleek interfaces. It\'s easy to be impressed by the latest innovations and sophisticated designs. However, in the rush to adopt new technologies, these practices often overlook a critical aspect: your team’s expertise in cybersecurity, how well they can manage the newly adopted innovation in a secure manner. This oversight can lead to severe consequences, as neglecting robust cybersecurity measures can expose sensitive patient data to significant risks. This data breach report 2023 [1] reveals a stark reality: healthcare has held the unenviable title of the industry with the highest data breach costs for an astonishing thirteen consecutive years. The average cost of a data breach in healthcare surged from $10.10 million in 2022 to $10.93 million in 2023, representing an 8.2% increase. Over the past three years alone, the average cost of a healthcare data breach has skyrocketed by a staggering 53.3%, escalating from $7.13 million in 2020.
This trend is compounded by the heightened regulatory landscape and critical infrastructure status of the healthcare industry. Since the onset of the COVID-19 pandemic, the average cost of data breaches within healthcare has experienced a significant surge. The rankings of the costliest industries for data breaches have shifted, with ‘technology’ sector dropping out of the top five and the industrial sector moving in. However, healthcare consistently remains the costliest, highlighting the urgent need for robust cybersecurity measures. IBM threat intelligence indicates that manufacturing is currently the most frequent target for cybercriminals.
Healthcare practices should prioritize tech consultants with proven track records in healthcare-specific cybersecurity protocols and HIPAA compliance. You should request detailed case studies of their cybersecurity implementations and incident response plans whenever you plan to hire a senior executive for tech leadership.
2. Don’t Fail to Assess Cultural Fit and Change Management Capabilities
A Harvard Business Review [2] study reveals that 70% of change initiatives falter due to cultural misalignment. This highlights the critical importance of selecting a consultant who not only understands technical needs but also seamlessly integrates with your organizational culture and possesses proven change management expertise. Companies with different cultures struggle to make decisions quickly, operate effectively, and integrate seamlessly. Conduct in-depth interviews, seek references from comparable healthcare organizations, and evaluate their change management methodologies before you induct a new candidate for a technology leadership role.
3. Don’t Underestimate the Importance of Data Analytics and AI Capabilities
The healthcare industry is witnessing a surge in the adoption of artificial intelligence (AI), with the market size valued at USD 14.4 billion last year (in 2023). This growth is fueled by advancements in AI techniques like machine learning and deep learning, leading to more accurate diagnoses, predictive analytics, and drug discovery.
The WHO has issued its first global report [3] on artificial intelligence (AI) in health, along with six guiding principles for its design and use. AI in healthcare can enhance the speed and accuracy of disease diagnosis and screening, assist with clinical care, and strengthen health research and drug development. It supports public health interventions like disease surveillance and empowers patients to manage their healthcare needs. Additionally, AI can help bridge access gaps in health services, especially in resource-poor countries and rural areas. Healthcare practices must not underestimate the importance of AI and should evaluate health tech leadership based on their experience in implementing predictive analytics and AI solutions in healthcare settings. Request them for case studies demonstrating tangible improvements in patient outcomes or operational efficiencies to evaluate their capabilities.
4. Don’t Neglect to Assess Vendor-Agnostic Expertise
A survey conducted by HIMSS Analytics [4] found that almost 70 percent of healthcare organizations used more than one vendor for RCM. An overwhelming majority of respondents said that collecting data from disparate systems was challenging; survey results found that respondents with two or more RCM systems had more denials than those using one.
Ensure prioritizing consultants with broad, multi-vendor expertise. Request for examples of projects where they\'ve integrated diverse technologies to create cohesive, efficient systems. Effective integration often involves more than just technological solutions. It requires a comprehensive understanding of organizational processes and stakeholder needs. Professionals and leaders who can manage these complexities and align technology with business objectives are more likely to deliver successful outcomes.
5. Consider Scalability and Long-term Support
In the excitement of immediate transformation, many leaders overlook the crucial aspects of scalability and long-term support. Hospital expenses have ballooned in recent years, far outpacing Medicare reimbursement, according to the report of the American Health Association [5] Labor costs, driven by staffing shortages and reliance on contract labor, have surged by 20.8% since 2019, with contract labor expenses alone increasing by a staggering 258%. The price of new drugs has reached unprecedented levels, exceeding $200,000, and drug expenses per patient have climbed by 19.7%. Hospital supply expenses, especially for emergency services, have also risen significantly, outpacing inflation. Additionally, the administrative burden imposed by insurers is increasing, negatively impacting patient care. These escalating costs, coupled with inadequate reimbursement, are creating a dire financial situation for hospitals and health systems to improve or maintain their RoI (return on investments). The consequences are far-reaching, with patients ultimately bearing the brunt of these challenges through reduced access to care. Technology and innovation leaders at hospitals should be capable of preparing and executing comprehensive scalability plans and robust long-term support strategies. When inducting such leaders, it’s important to evaluate their track record in successfully supporting the growth of healthcare practices over extended periods.
6. Don’t Overlook Regulatory Compliance Expertise
While most healthcare leaders are well-versed in HIPAA, many fail to consider the broader regulatory landscape affecting healthcare technology. The potential risk involved in this area is far-reaching. How much would it cost your organization if you did not get control of this issue? This study [6] of 46 organizations by the Poneomon Institute found the cost of non-compliance to be about 3.5 times higher than compliance ($820/employee for non-compliant organizations vs. $222/employee for compliant organizations), with an average of $9.6 million in costs for non-compliant organizations. But the costs go beyond just dollars. Non-compliance leaves you at risk of financial losses, security breaches, license revocations, business disruptions, poor patient care, erosion of trust, and a damaged reputation.
To avoid the cost of non-compliance, assess your technology consultant\'s expertise in a wide range of healthcare regulations, including the Cures Act, GDPR (for international data), and emerging state-level privacy laws. Request their strategy for keeping your systems compliant with evolving regulations.
Bibliography
- Ponemon Institute, "Cost of a Data Breach Report 2023." IBM Security, 2023.
- Beer, Michael, and Nitin Nohria. "Cracking the Code of Change." Harvard Business Review, May–June 2000.
- Global Market Insights Inc., "Artificial Intelligence in Healthcare Market Size by Product, By Application, Industry Analysis Report, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2023–2024"
- American Hospital Association. "New AHA Report Finds Financial Challenges Mount for Hospitals and Health Systems, Putting Access to Care at Risk." April 20, 2023.
- Ponemon Institute, "The True Cost of Compliance." April 2021.
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