• Healthcare costs
• Value-based care

Health IT execs under pressure to boost organizations’ efficiency

Health IT executives have long been under pressure to provide some return on investment for the systems they’re implementing.

Increasingly, they’ll need to help their healthcare organizations use those systems to increase efficiency, improve patient care and safety, and eliminate any unnecessary waste.

Those pressures will ratchet up in 2022, as the slow shift to value-based care continues and the health systems feel the need to ameliorate financial losses suffered over the last two years because of operational changes related to the COVID-19 pandemic.

While IT execs have had to be cost conscious before, the stakes are even higher as healthcare organizations look forward to the new year.

Many C-suite executives are feeling the pressure to maximize efficiency and eliminate waste. Industry watchdogs cite waste at the administrative level in hospitals and healthcare systems for contributing to the high cost of healthcare in the United States. Consider these numbers:

• Nationally, healthcare spending is projected to grow an average rate of 5.4 percent annually through 2028.
• Healthcare spending is expected to take increasingly bigger bites from the gross domestic product through 2028.
• Healthcare spending totaled $3.8 trillion in 2019, the most recent year for which data is available from the Centers for Medicare & Medicaid Services. Of that total, some 25 percent – nearly $1 trillion – is attributed to spending on administrative costs. The lion’s share of administrative spending is in the back office, specifically nonclinical operational functions, which includes nonclinical IT.
• In 2017, there were 6.4 million administrative workers in hospitals and healthcare organizations, almost double the number of nurses and physicians. The nonclinical administrative workforce in hospitals and healthcare systems grew by more than a million workers between 2001 and 2017.

Improvements in interoperability, automation and the use of advanced technologies such as machine learning and artificial intelligence are projected to reduce waste at the administrative level, according to the authors of a viewpoint published in The Journal of the American Medical Association. The authors contend that applying 30 strategies over the next three years could whittle down excess administrative spending and save about $265 billion without compromising quality and access to care.

Other reports put even more pressure on health information technology to support streamlining and efficiency to apply downward pressure to reduce administrative expenditures, and that will only increase in the new year, experts say.

In this environment, CIOs will be expected to support the entire C-suite by providing effective solutions on time, on budget and posthaste, according to Aaron Miri, the chief digital and information officer at Baptist Health. “If you don’t produce those as a CIO, your days are very limited because the spotlight is on all the administrative overhead in health systems,” he warned. “The boards are smart people …  They are looking with a magnifying glass to say, ‘What are we spending and what is the return on value?’ That is the bottom line.”