ORLANDO, Florida—As virtual care accelerated during the COVID-19 pandemic, telehealth companies like Teladoc and MDLive now represent a competitive threat to hospitals as much as rival health systems do.
Virtual health and large technology companies have quickly emerged onto the competitive radars of hospitals and health systems. Health systems rank virtual health companies as their top rivals when it comes to digital transformation, tied with other hospitals and health systems, according to a new report from The Chartis Group.
Unveiled at the Healthcare Information and Management Systems Society (HIMSS) Global Conference in Orlando, the report looks at the state of health systems' digital transformation efforts.
The race toward digital transformation has accelerated in the context of the pandemic as many hospitals and health systems have ramped up their investments in digital technologies intended to maintain remote contact with their patients.
But most provider organizations (73%) are still stuck in the planning stages for personalized care.
Only 13% of hospitals and health systems consider themselves ahead of the pace of change that patients expect and new market rivals are setting, according to the report, which is based on a survey of 143 health system executives who were reached in November 2021.
"Health systems instead must shift from planning to execution against their digital transformation strategies, which requires enterprise coordination across leadership and an unwavering focus on implementing digital offerings that are aligned to what consumers are demanding from their care experiences," wrote Tom Kiesau, director and digital transformation practice leader at The Chartis Group, and Bret Anderson, principal at the organization, in the report.
Only 11% of health systems report being in the implementation phase of their personalized care and digital transformation journeys, but many have identified specific priorities for digital transformation efforts: remote patient monitoring (78%), digitally enabled service center (74%), digital specialty care (71%), digital-first primary care (70%), digital front door (69%) and hospital at home (60%).
Of note, planning for hospital at home has increased considerably since last year. One in 3 respondents to The Chartis Group's 2021 survey said they had no plans for hospital at home in the next five years. Just nine months later, only 1 in 5 still have no plans.
The majority of health system executives (84%) cite improving outcomes and reducing the cost of care as the primary goals for investing in digital initiatives.
The digital health competitive landscape is shifting rapidly, and more than one-third (35%) of health system executives now see large tech companies like Apple, Microsoft and Google as their highest competitive threat. Providers are also feeling the pinch from retail care providers as 23% of executives identified these companies, such as CVS, Walmart and Walgreens, as competitive rivals.
Even payers are on their competitive radars as many insurance companies begin to roll out virtual primary care services or own physician groups.
Health systems report that their primary impediments to digital transformation are financial; required financial investment, ROI and payer reimbursements were the most common cited concerns.
"Digital transformation is no longer an opt-in priority for hospitals and health systems. It is a necessary journey for them to not only plan but implement—and time is of the essence," Kiesau and Anderson wrote in the report. "Without immediate action, provider organizations risk losing their ability to attract new patients, retain their existing ones, build robust provider networks, and enter new markets."
To ramp up digital transformation efforts, provider organizations need to create comprehensive views of their consumer behaviors, aggregate these insights and apply them directly to improving the digitally enabled experiences they offer, Kiesau and Anderson said.
Those differentiated experiences have to be linked with value drivers for the organization to create sustainable business models that have often eluded digital health programs, they noted.
"It also requires taking an enterprise approach that coordinates leadership and expertise across several domains so the technology infrastructure, operational processes, and clinical staff all align toward unified strategic goal," they wrote.