ViVE 2023: Cash-strapped health systems demanding clear financial returns from their digital investments

A tough year and potential recession on the horizon have health systems tightening the leash on potential digital investments.

During a ViVE 2023 panel of provider technologists, Allegheny Health Network Chief Digital and Information Officer Ashis Barad was quick to list efficacy and earnings alongside engagement, empowerment and experiences as priorities as part of his definition of a successful digital health offering.

“As healthcare systems, we are struggling,” Barad said. “We need [to know] that digital solution is one that is financially sustainable for us as well.”

The point was echoed by Sara Vaezy, chief strategy and digital officer at Providence. She said that the integrated system has adopted the mantra RODI, or return on digital investment, now that the industry’s unconditional excitement for novel platforms has come back down to earth.

“Be able to have an infrastructure that can demonstrate, quantify, attribute value to what you’re actually getting out of your digital investments, whether it be in terms of the lives that you’ve touched or the economic value that it generates,” Vaezy advised audience members.

“That’s been part of the challenge that we’ve had over the last several years with the boom," she continued. "When we were at the top of the hype cycle, everyone’s like super jazzed, right? But then we don’t know what you actually got out of all that.”

Providence’s more pragmatic mindset was also referenced by Chief Information Officer B.J. Moore. In a separate conversation with Fierce Healthcare, the executive acknowledged his team’s tighter budget amid a recent administrative reorganization and $6.1 billion net loss fiscal year.

He and the system are still very interested in new technologies that can increase workforce productivity or retention—but only if that return will land within the next 12 months or so.

“Anything I give to my team or when I talk to partners coming in to sell me a solution, the feedback I always give them is ‘If you can give me an ROI in a year, sign me up,’” Moore said. “I’ll spend a million with you if I can get a million and a half by the end of the year. Anything that requires a longer horizon, we just don’t have the luxury, right? Whereas the investments I was making in 2019, 2020, 2021 didn’t have a payoff until much later. But I’m not really in a position to do that right now.”

But for all the added scrutiny, digital officers from Allegheny Health Network, Sutter Health and Adventist Health each said they have the blessing of system leadership to keep pushing into new platforms and capabilities as a response to the current economic landscape.

“I think that because of the pressures that we’ve had with inflation, both in our supply side of nursing and wages, we’ve been asked to really double down on our digital investment to enable cost savings from that perspective,” Adventist Health Chief Digital Officer Jennifer Stemmler said during the panel.