Hospital CEOs leading the way to the era of Smart Hospitals

May 25, 2021 | Month End Close | 0 comments

Digital skills are not just for IT anymore.  C-Suite leaders of all areas are now required to have a much higher level of digital understanding than prior to the pandemic.  Research from the Harvard Business Review shows the expectations for CEOs is actually seen a critical skill for over 60% of current job descriptions.  

Healthcare’s acceleration of digital disruption is changing the roles of many health care C-suite leaders. The roles of chief information and chief operating officers, for example, are becoming increasingly intertwined and can educate senior leaders on how to extract the value of information technology (IT) to achieve its goals, noted Joel Vengco, senior vice president and chief information and digital officer at Baystate Health in Springfield, Mass., in a recent Becker’s Health IT report.

Welcome to the new era of hospital leadership where “digital” is no longer the sacred territory of the CIO and information technology team.  Gone are the days where anything technology related is bucketed into nebulous buckets of “infrastructure”, “applications”, and “security” and projects centered on “digital transformation” that drag on for years until they morph into never ending “optimizations”.  The hospital of today can no longer afford to leave the promise of hard dollar digital value (DV$) untapped.  The C-Suite must collaborate on shared vision of a Smart Hospital.


The future of healthcare is now

The new era of Smart Hospitals has been on the horizon for nearly three decades.  Many people trace the roots of modern technology to the Health Information Technology for Economic and Clinical Health Act, abbreviated HITECH Act, enacted under Title XIII of the American Recovery and Reinvestment Act of 2009.  The major achievements of the legislation brought the electronic health records and private and secure electronic health information exchange (the systems that collect, analyze, store, and transmit the records), aka EHRs. However, if we consider “digital” as a way of being verses focusing solely on the technology, the push for “Smart Hospitals” finds roots with the  Health Insurance Portability and Accountability Act (HIPAA) of 1996 through the HIPAA Privacy and Security Rules. 

The HIPAA Privacy Rule describes what information is protected and how protected information can be used and disclosed. The HIPAA Security Rule describes who is covered by the HIPAA privacy protections and what safeguards must be in place to ensure appropriate protection of electronic protected health information.  HIPAA transformed the industry operationally and technologically.  It was so transformative that yet another set of rules had to be established.  Even today, the Centers for Medicare & Medicaid Services (CMS) administer and enforce the HIPAA Administrative Simplification Rules, including the Transactions and Code Set StandardsEmployer Identifier Standard, and National Provider Identifier Standard. The HIPAA Enforcement Rule provides standards for the enforcement of all the Administrative Simplification Rules., the HIPAA Administrative Simplification Rules, including the Transactions and Code Set StandardsEmployer Identifier Standard, and National Provider Identifier Standard. The HIPAA Enforcement Rule provides standards for the enforcement of all the Administrative Simplification Rules.  Add into the mix, nearly 30 years of regulation, technological and scientific advancement, plus a pandemic and birth of a new era in hospital management has arrived.


What makes the current environment different than the past 20-30 years of “digital transformation”?

The events of the last year have thrust hospitals into a period XXXX industry disruption.   Fragmented technology and siloed workflow enhancements cannot support expectations of patients, employees, payers, and government agencies.  In order to meet current and anticipated challenges, hospitals must embrace “digital” as more than a set of systems or technologies.  For hospitals, “digital” is now a way of being in that care delivery, operations and technology are fused together seamlessly. 

Digital directly impacts every aspect of today’s hospital.  Leading hospitals through eras of disruption requires vision and a commitment to engagement with patients, clinicians, and operational teams.  Because a Smart Hospital extends to all areas equally, the hospital CEO is best positioned to articulate the vision and support the strategy through active engagement. 

For example, service lines once unfeasible for rural hospitals may need to be re-evaluated now that options for remote clinical services, such as tele-ICU.  As recent as May 6th of this year,  Hampton Regional Medical Center (HRMC) cut the ribbon on its new Tele-ICU Unit. Through a partnership with the Medical University of South Carolina (MUSC) Health and Hicuity Health, HRMC is now able to provide advanced intensive care around the clock leveraging telemedicine technology.

Another high impact example is the hospital’s digital front doors.  Digital front doors refer to the organization’s strategy for engaging patients at every major touchpoint of the patient journey using technology that patients have already adopted for everyday use. A strong digital front door strategy doesn’t hinge on any single product but leverages technology to expand patient access, improve productivity, and drive higher patient satisfaction and increased revenue

Digital workforce enablement is another critical component to combat staff shortages, skills constraints, burnout, and dissatisfaction for smaller hospitals who often struggled to find sufficient talent within budget.  Developing a digital workforce strategy that is cohesive with human talent is a multi-disciplinary endeavor with enterprise-wide impact and risk.  Digital employees and digital assistants hold the promise of higher efficiency, cost reduction, higher employee and patient satisfaction, and higher overall margins.  They also require a sound strategic planning with an inclusive leadership team in order to realize the full compliment of benefits.

Automation and predictive analysis are often considered the holy grails of hospital improvement for clinical and operational areas.  These are areas where it is tempting for a CEO to take a back seat and allow the CIO to lead.  The most common result is an organization focused on the technology, such as remote process automation (RPA) and artificial intelligence (AI) tools and algorithms.  Unfortunately, this distracts from the higher priority discussions surrounding “what” should be automated or analyzed, “how” the result will be leveraged, “how much” total value will be created by “when”.  Predictive analytics can be a particularly deep rabbit hole as most hospital systems have large stores of data but may not have a strategy for creating the appropriate analytics for appropriate transformation into meaningful insights.


Advanced digital value now available to smaller hospital CEOs

Today’s hospital CEO could also benefit from an understanding of potential opportunities to leverage value from participation in more advanced techniques such as innovation incubators and digital products including de-identified data monetization. 

The data monetization market is poised to touch a valuation of $707.86 billion by 2025. Cutting edge technologies such as blockchain and cognitive analytics will take insights and revenue obtained from data and create new revenue streams while promoting wellness among the communities they serve – directly and indirectly. 

Thanks, in large part, to the deployment of EHR technologies, data abounds in a hospital environment. Health record information must be protected at all times to ensure appropriate privacy but the digital value (DV$) of the organization’s data should be considered a true enterprise asset. With proper de-identification, healthcare organizations reap the benefits of this asset through analytics. Many hospitals and health systems find extra digital value (DV$) by monetizing these analytics of de-identified data for generating new revenue streams.

Use cases for potential data monetization that today’s hospital CEO should be familiar with are:

  • Measuring business performance improvements
  • Productizing information (i.e., new information-based offerings)
  • Informationalizing products (i.e., including information as a value-add component of an existing offering)
  • Selling data outright (via a data broker or independently) to organizations that have a business need for real-world insights such as clinical trials, pharmaceuticals, digital health vendors, and healthcare payors

Leveraging the untapped digital value (DV$) of a hospital or health system requires strategic and practical understanding of the appropriate approach for each scenario. They will often take the form of leveraging analytics around patient preferences, stratified population risks, and applied predictive analysis. More recently hospitals began providing data as add-on services to enhance the experience of patients and employees The most common approach, and often with the highest digital value (DV$), of data monetization is to share the data assets in a raw, native, and de-identified form (known as Data-as-a-Service) or an (API). 

Due to disruptive digital health innovations creating an enormous amount of data generated in healthcare ecosystems, hospitals are well positioned to reap tremendous digital value (DV$) benefits. Due to privacy concerns and regulations, a hospital data monetization strategy must create a balance between the monetization approaches and data security.

Innovation incubators are organizations or alliances that assist startup and early-stage companies mature and grow their businesses. Accelerators generally provide a structured training program over several months, extensive mentoring for company founders, limited capital investment, access to additional investors, and other services.  Once only for large health systems, the ability to participate in innovation hubs and accelerator programs has opened to a more inclusive and collaborative market environment. Today, hospitals are creating new digital value (DV$) through partnerships and alliances throughout the healthcare industry.  While this is certainly an advanced technique for smaller hospitals, education of innovation incubation best practices can help position the hospital CEO to leverage benefits when the technique aligns with organizational timelines. Some recent examples:

  • Recognizing a lack of innovation programs in pediatric healthcare, Children’s Hospital Los Angeles announced a new digital health accelerator that will link 26 hospitals across the U.S., U.K. and Australia with 10 tech companies focused on increasing digital innovations in pediatric healthcare. The 13-week program will run every year from January through March.
  • The University of California San Francisco School of Medicine received a $1.5 million grant to establish a new endowment that funds palliative medicine innovation projects focusing on improving training for clinicians treating patients with serious illnesses via telemedicine. The fund supports development of a series of educational modules for students and other trainees to use and learn necessary skills for using telemedicine successfully.
  • Marian Regional Medical Center’s Foundation received a $2 million gift from an anonymous donor, which it used to create the Advanced Technology and Innovation Endowment Fund. The program invests in medical equipment and technology for the hospital.
  • Baton Rouge, La., secured a collective $1.2 million in federal and private-sector funding to launch Health-Tech Catalyst, a three-year healthcare innovation initiative. The effort will comprise three parts: an innovation incubator for new technologies, a program in which hospitals collaborate to increase clinical trial access or develop experimental treatments, and an investment capital arm for healthcare startups.

Mid-size health systems and hospitals are establishing partnerships that leverage technology to alleviate administrative burdens while improving quality of care and patient engagement. Once seen as a venture only viable for the largest health systems, smaller organizations are finding success in developing digital products that can be monetized to partners and other health organizations through strategic partnerships and joint ventures with other health systems and technology startups seeking to leverage clinical and operational expertise from providers. These with early-stage companies can provide access to technologies can provide a competitive edge to a health system.

The marketplace for health centered digital products is rapidly expanding in clinical (telehealth, hospital at home, care team coordination), operational (predictive analytics, patient engagement, financial services), and direct to consumer, or DTC, such as wearables and on-demand diagnostic testing.


How can a hospital CEO support a successful transition to new era of Smart Hospitals?

  • Focus on Leading Organizational Change
    Align the team around you with a clear strategy and ensure that the strategy is clear across functional areas and work groups. You don’t need to be on the leading edge or at the forefront of technical proficiency, but you do need to build the knowledge to lead organizational change.
  • Actively Engage with the Digital Strategy
    Ensure that the digital strategy aligns and supports the organizational strategic plan.  You don’t have to lead the digital strategy development, but you must be able to articulate the vision and how to evaluate success criteria and the triggers that signal a need for adjustment.
  • Create the Right Culture
    Culture can’t be neglected. CEOs must foster an innovative and creative culture that can reinforce technology-driven strategic shifts.
  • Surround Yourself with the Right Team
    Create a seat at the table for those with vital expertise. Identify the voices that need to be heard and change organizational structure if needed to execute your digital transformation.


Real world examples of CEOs embracing the new digital strategy engagement

Many hospital and health system CEOs are proactively rethinking how their organizations operate. This can mean not only starting something new to improve and innovate medical care, but also stopping, halting or quitting approaches that may not fit well in the new healthcare environment. For some recent real world examples see this deep dive provided by Becker’s.