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5 Focus Areas For Healthcare CIOs And CDOs Under Tight Margins


The healthcare sector is struggling under tight margins and the situation shows no signs of improving. Reimbursements for Centers for Medicare & Medicaid Services physician fee schedule have been decreasing. Despite CMS initiatives to facilitate higher reimbursements for inpatient services, they are still failing to keep up with the rising costs of compensation and inflation, according to the American Hospital Association.



As a result, organizations are drastically cutting back on budgets—putting the CIOs and CDOs in a particularly delicate position to get the right priorities set.


Healthcare has been spared significant layoffs, unlike big tech organizations recently. however, if things don't turn around soon, that may change.


Here are five areas of focus for healthcare CIOs and CDOs.


Basic Digital Experience Is Still Struggling

Healthcare's patient/customer experience is still off the mark compared to other industries–like retail, finance and airlines—despite improvements. Making a medical appointment and finding availability is not as easy as booking a flight. Understanding the potential cost for a healthcare visit is not as simple as a retail transaction in a department store.


For instance, a family with multiple children often has difficulty scheduling an appointment to have all their kids see the pediatrician at consecutive time slots due to most scheduling programs being designed for only one patient per time availability.


Another example is a healthcare clinic can charge $200 to the patient’s insurance company for a patient visit, but this doesn't necessarily mean they'll receive that full amount back in reimbursement. The exact rate of compensation is usually determined by negotiations between the clinic and insurer prior to any services being rendered.


CIOs must explore and implement tools to assist with enhancing the patient experience instead of waiting for their electronic medical record vendor to do it all, which may be the easy solution but a harmful strategy at times.


Training a Digital First Mindset

The digital skill gap is a rising concern in healthcare organizations, mainly due to the number of disparate software products throughout an organization.


To ensure proper usage and management of these tools, there must be an emphasis on training employees on how they are used and operated. Generally, technology training only occurs during employee orientation or when products are launched; however, it has been largely neglected.

The average mid-enterprise health system in America consists of 250+ applications alone. Large enterprises have over 500 different applications, making tech literacy all the more important for staff members.


Aaron Miri, chief information and digital officer of Baptist Health, focuses on immersive design. Miri said in an interview, he is creating "Hands-on labs, formal reeducation (cert programs, etc.), Leveraging your key vendors to help cross train, working to educate your exec team with skilled partners such as in the example of cybersecurity, the FBI or DHS, etc."


Automate All

CIOs and CDOs must take the lead on digital initiatives and concentrate on external patient-facing experiences and internal employee experiences.

In order to progress with administrative and receptive tasks, automation tools have become essential for departments such as supply chain, HR, and finance, with the following examples.


  • Automating the supply chain helps to reduce waste while increasing productivity and efficiency for your staff by streamlining processes such as stocking, tracking, and replenishing internal goods.

  • They are leveraging AI-driven HR automation to address and mitigate the risk of employee burnout.

  • Assist pre-authorization and simple claim denials.


Seattle Children's Hospital's chief information and digital officer, Zafar Chaudry, is placing his bet on automation. Zafar said in an interview, "With the escalating costs in healthcare and margins continuing to drop, IT will be instrumental in enabling cost improvements with hot areas being automation, AI, RPA, and better use of cloud-based analytics to help change processes and improve throughput."


Co-Creation Is The Play For Healthcare Provider Innovation


Healthcare organizations must think creatively with new affiliations and partnership models to meet the current evolving market environment's strategic needs and financial demands. We are not a software development team, so let's stop trying to act like one.


To best support your hospital or clinic, CIOs and CDOs should explore practical ways to collaborate with early-stage companies and find unique solutions for your patients. For example, I recently created a for-profit entity dedicated to innovative practices to co-create with venture studios or individual companies. This type of collaboration introduces new products in the industry.


Don't Sleep On Your Infrastructure

After witnessing Southwest Airlines’ infrastructure go down last December, technology executives must update their infrastructure, including security solutions. At the same time, progressive organizations also focus on incorporating 5G solutions. I have always wanted to utilize 5G as an extension or replacement of my wireless network infrastructure.


Stanford Healthcare's chief technology officer Christian Lindmark also has the same mindset by exploring 5G/CBRS for their new facilities and buildings. Christian said in an interview, "I still think many of the healthcare workflows are two to four years away, but now is the time to start investing in the infrastructure, especially if you are building a new facility or doing any renovation. We have identified a few workflows we hope to start testing in the next six to nine months."


Overall, CIOs and CDOs alike will no doubt face immense pressure from their already tight budgets if the current situation worsens in the healthcare industry. Follow these five focus areas to be a successful CIO/CDO of the future – your organization's future may depend on it!



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