If the coronavirus crisis taught the world only one thing, it was the importance of reliable health care. While the performance of the German health care system ranked well in an international comparison,1 the pandemic mercilessly exposed the industry’s glaring digitalization backlog. Especially in view of the current economic situation, the disparities will lead to growing challenges for institutions and personnel alike. Sustainable digital strategies can help to restore momentum to the digitalization process.
The health care system is facing major challenges. Hospitals in particular are confronted with rising pressure to act. Digitalization could offer some relief.
1. Rising costs
The persistently high inflation caused by high energy and food prices is also leaving its mark on hospitals. The simultaneous price increases in medical technology and associated construction projects, although not directly related, nevertheless place additional strain on budgets. Finally, wage increases exacerbate the pressure (personnel costs often account for 60 per cent of a hospital’s total costs). The German Hospital Federation (DKG) predicts that 10 to 20 per cent of German hospitals could be at risk of insolvency before the end of 2023.
2. Staff shortages
Demographic change will also raise cost pressure even further in the coming years. The shortage of nursing staff everywhere will only continue to worsen, and the tug-of-war for skilled workers will intensify. Simultaneously, it can be assumed that the often difficult working conditions generally found in the sector will lead to rising numbers of early retirements in the coming years. Moreover, the comparatively unattractive working conditions discourage potential young professionals from entering the profession.
3. Data availability and security
Data are the new gold, and this is just as true for health care as for other sectors. They become especially valuable when shared and enriched across divisional boundaries, but a guarantee for the availability and security of the data is essential for this to happen. Disturbingly, hospitals have recently been the special targets of cyberattacks (e.g., ransomware attacks on single hospitals in Germany and internationally). Investing in IT and cybersecurity is evidently more important than ever for hospitals and must become an indispensable part of their digitalization strategy.
Digitalization opens the door to previously unimagined opportunities for hospitals to increase efficiency, simplify processes, heighten security, and — ultimately — cut costs. Current studies put this savings potential at a minimum of 12 per cent.2 Moreover, digitalization generates new business models enabling hospitals to expand their service offerings to include data-based services (for example) that improve their service to patients.
Digitalization driver KHZG
The so-called Future of Hospitals Act (Krankenhauszukunftsgesetz; KHZG) provides the funding critical for the achievement of this transformation. Endowed with an investment volume of €4.3 billion, the KHZG is one of the most significant drivers of digital transformation in the German hospital sector. The objective of the act is to provide support to hospitals during their own digital transformation and to realize the urgently required breakup of the digitalization logjam. To this end, the law’s funding provisions address various constituent elements such as decision support systems, patient portals, or the IT security mentioned above — and always with the goal of enhancing the efficiency and quality of patient care.
In practice, however, it has become apparent that many hospitals are overwhelmed by the sheer quantity of the various measures found in the KHZG and rarely proceed on the basis of a coordinated strategy.
Focus on strategy
A digital strategy facilitates the relevant procedures. By following its defined principles, measures can be prioritized and structured so that they build on one another and achieve as a whole the most effective impact. Ultimately, no other approach can secure optimal improvement in the quality and safety of care.
A digital strategy of this type must address four key fields of action in the hospital environment that give due regard to the realization of the digitalization activities and related challenges as well as to their clear planning and the prioritization of digitalization measures.
Products and services: Hospital service is defined de facto by the responsible and high-quality care for patients. The deliberate use of digital tools can significantly enhance the quality of this service. The communication of patient data between hospitals and upstream or downstream stakeholders (e.g., outpatient physician practices, rehabilitation clinics, nursing services) can result in a patient experience that is more efficient, of higher quality, and generally more “pleasant.” The involved parties create a so-called ecosystem that, as a whole, upgrades the results and experience of the treatment from the patient’s point of view.
Culture and organization: The right organizational form plays a decisive role for a successful transformation, as do the contributions of employees. Hospitals are often characterized by traditionally structured hierarchies. They are essential, especially in emergency situations, to delineate unambiguous chains of authority that secure the safety of patient care. Nevertheless, an agile mindset can improve employee productivity in a variety of non-clinical settings. Overall, it is important to create an open culture that encourages employees to embrace new technologies and become involved. It is crucial for the success of such a culture that hospital management itself clearly demonstrate commitment to its principles in daily work.
Operational processes: There must be clarification in the digital strategy of what changes will result for existing processes in the hospital. Digital transformation is not about digitally mapping previously analog processes. On the contrary, digitalization offers new opportunities for the redesign and optimization of existing processes and can lead to new workflows that are more efficient and effective. Burdens on employees can be lightened and working conditions improved. An important consideration, however, is not to be content with the examination of only the primary processes of diagnosis and treatment, but to consider as well secondary and tertiary processes of management and care.
Patient interface: A digital strategy must focus on patient involvement. The strategy framework ensures that the digitalization measures have a positive effect on the patient experience along the full length of the patient journey. For example, digital processes for the admission of patients can contribute to a shortening of waiting times for emergency cases. At the same time, digital appointment management (of examinations, for instance) can simplify planning. These and other points not only promote and improve the patient experience; they simultaneously have a positive impact on the perception of the hospital and the referring primary care physicians.
These four dimensions serve as the framework for the successful design of digitalization and the components that build on it — software, tools, systems, and platforms.
Pursuing a strategy to the finish line
A holistic digitalization strategy is the indispensable prerequisite for a successful future for health care, especially for hospitals. A sustainably structured digital strategy ensures that all aspects for successful digitalization are taken into account and that the full potential of digitalization can be leveraged. A digitalization road map like this secures a clear cost and competitive advantage on an increasingly challenging health care market.
A consequence of the recently announced extension of the KHZG deadline means that the topic of digitalization will remain of immediate concern for many hospitals even in the future. As will the related topic of digital strategy. One thing is certainly clear: without at least a strategy of some kind, projects are doomed.