Digital innovation may be a necessity for health care organizations, but it’s coming at a steep price.
Modern Healthcare’s most recent Power Panel survey of top CEOs found that more than a third of the 26 responding CEOs said their organizations spent between $5 million and $19.9 million on digital innovation last year. About 30% spent up to $4.9 million on these projects and two spent $100 million.
It is important to note that electronic health records, the foundation for many digital systems these organizations are adopting, already had a significant impact on spending. Scripps Health’s CEO, Chris Van Gorder, one of the respondents, noted that his organization spent nearly $500 million on its EHR platform to build the foundation for its digital technologies of the future.
Respondents also believe the federal government can continue to play a valuable role in encouraging digital innovation by creating greater financial incentives to develop and adopt digital solutions (cited by more than half of respondents) or by using payment to force widespread adoption of standards. The respondents also emphasized that these technology costs must be treated as an investment that ultimately will help lower costs and lead to better outcomes. Catherine Jacobson, Froedert Health’s CEO, said the more support there is for value-based reimbursement, the more the field will be driven toward digital technologies to improve efficiency.