The Future of Digital Health and Healthcare IT Post-Covid


Implementing and pursuing innovation in digital health and healthcare IT should be a priority for all U.S. healthcare providers and payers — especially as the lessons and response to the Covid-19 pandemic become permanently part of our everyday lives.

The outbreak of Covid-19 was a “black swan” event that dramatically accelerated the evolution and acceptance of digital health and healthcare information technology (IT) — likely by more than five years. It has also permanently changed Americans’ expectations of healthcare providers and patient care. However, the focus on Covid-19 belies three additional underlying and interrelated trends that will continue to drive new use cases for digital health and healthcare IT applications.

Value based reimbursement

The ongoing shift towards “value based reimbursement” continues to be a major catalyst of digital health and healthcare IT adoption. Under value-based reimbursement, hospitals and physicians are compensated based on their ability to demonstrate high quality of care, generate positive real-world patient outcomes, and manage the health and wellness of the populations in the communities that they serve. This contrasts with the legacy, “fee-for-service” reimbursement model under which providers are paid on a volume basis with little regard to quality, outcomes or population health.

In late 2021, the Centers for Medicare and Medicaid Services (CMS) announced an ambitious goal of shifting the majority of beneficiaries into a value-based reimbursement model. A value-based reimbursement environment requires an interoperable IT infrastructure to coordinate and track data on patients across disparate settings of care. To support this, CMS has recently proposed important reforms to the Medicare Shared Savings Program to give providers up-front funding for healthcare IT and digital health technologies in order to more effectively operate in these new value based reimbursement models.

A major challenge to success in value based reimbursement is that the software ecosystem in healthcare has evolved to be heavily client-server and on-premise, with each implementation being its own instance and customized to each user. This has led to fragmented and siloed software systems that cannot talk to each other. The good news is that legislative and regulatory actions are helping to address these interoperability challenges. The 21st Century Cures Act, for instance, is helping to open up closed software systems and give artificial intelligence and machine learning applications access to larger data sets. This improved data access, in turn, could elucidate new and unexpected predictive insights of how clinical, social and environmental variables can positively impact patient outcomes and population health.

Healthcare consumerism

“Healthcare consumerism” is a second major macro driver behind the digitization of healthcare. The rising prevalence of high deductible health plans is resulting in Americans bearing a greater out-of-pocket burden which has led to more patients comparison shopping for their medical care. Hospitals and physicians, in turn, are competing for patients by creating modern and efficient consumer experiences. One area of focus is the digitization of the manual patient intake process – reducing paperwork for patients and improving operations for providers.

For instance, physicians are adopting AI software to reduce patient no-show rates, which can be as high as 15 to 30 percent. AI-based software can proactively flag patients who are more likely to not show to their appointment and proactively initiate reminders. And, if a patient cancellation occurs, the AI software automatically fills appointments from pre-existing lists of patients who have indicated that they are open to taking short-notice appointments. Finally, physicians are using AI to conduct low-cost digital marketing and educational campaigns to make patients aware of new or incremental services relevant to their personal healthcare needs.

Contributing to the movement towards healthcare consumerism is the implementation of the No Surprises Act, which has been one of the more underappreciated pieces of legislation impacting providers in recent years. This legislation is materially contributing to an environment of greater price transparency among hospitals and physicians to enable Americans to better comparison shop for their care. Among other things, the No Surprises Act requires healthcare providers to disclose up front to patients “good faith price” estimates for their services. Initially, this is limited to self-pay patients, but it could provide a framework for additional price transparency legislation or regulation over time. Here, we see the need for new technologies to help providers generate and communicate real-time price estimates to patients. This can be particularly difficult for care that involves multiple providers and multiple encounters over time.

Complexity of care

Finally, a third driver of digital health and healthcare IT is the increasing scientific complexity of medical care, including advances in genomics and the use of precision therapeutics, which is driving the need for AI-based decision support software.

This is particularly the case for complex specialties such as oncology. In oncology, for instance, the science is advancing so rapidly that a single physician would need to read 40+ hours per week to just stay current on the most recent research. Also, physicians must often decide between 7+ therapeutic alternatives for any one diagnosis. The range of treatment alternatives will likely increase over time with the availability of low-cost biosimilars. The use of low-cost biosimilar drugs represents an opportunity to generate hundreds of billions in annual savings over the next decade. However, one of the major barriers to the use of biosimilars is provider and patient awareness and education. Here, software can help physicians proactively screen for patients who could benefit from a lower cost biosimilar alternative and deliver tailored educational content.

Considerations for the future of innovative, hybrid care

Implementing and pursuing innovation in digital health and healthcare IT should be a priority for all U.S. healthcare providers and payers — especially as the lessons and response to the Covid-19 pandemic become permanently part of our everyday lives. That said, we should not forget that advances in healthcare IT and digital health should be considered as a complement to in-person care, rather than a replacement of it. Exclusively relying on healthcare IT and digital health alone could bring the unintended consequence of creating even greater fragmentation and duplication of care. Finally, if there’s one lesson learned from the last few years, it’s to expect the unexpected.

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