How Health Systems Are Navigating 2023: Bain & Company and KLAS Report
In 2020 there was a lot of discussion around “the new normal” for all of us. The truth, I think, is that up until this year, nothing has settled long enough for us to decide what normal looks like. One example was shared by Adam Gale, KLAS’ CEO, this last week at our Digital Health Investment Symposium, “Those staff that left? They’re not coming back,” he said.
The 2023 Landscape
And he’s not wrong. Though the 2023 landscape is stabilizing in many ways, not all those ways involve a return to 2019 expectations. Today, I’d like to delve into the most recent findings of the 2023 Healthcare Provider IT Report, co-authored by KLAS Research and Bain & Company.
Two years ago, when we first brainstormed about bringing together KLAS and Bain's strengths to share these market insight reports, we got excited about the thought of tapping into the pulse of healthcare buying trends. Last year, in the aftermath of the pandemic, our report shed light on pressing uncertainties:
Would health systems recoil from technological investments?
Would innovation stall?
In 2023, we have the answer. We've continued to see health systems prioritize and even accelerate their investments in tech. Perhaps the greatest factor in this growth is the new frontier of LLMs, which have ignited imaginations and ideas for potential applications within healthcare.
The AI Conversation Is Just Beginning
While AI isn’t new to our domain, (we’ve been talking about computer-assisted coding or AI in imaging for years) the enhanced capabilities of generative AI are. This tool, which once seemed distant, is now seen as a solution for some of the most challenging aspects of healthcare.
Our joint report this year gauged acceptance, excitement, and most notably, the use cases that resonate the most with healthcare professionals. Unlike in the past, nobody today asks whether AI is here to stay.
With that question settled, the real unknown is where healthcare’s AI-driven beachhead will appear. We’ve heard from a number of health systems about applications not just for clinical decision support or patient safety but also for enhancing workflows and bolstering operational efficiency within healthcare organizations.
It’s important to understand the unique needs of diverse healthcare entities—from academic medical centers to standalone hospitals. The implementation of new technology across the sector won’t be uniform, either in the depth of adoption or in the use cases involved. It is paramount for technology vendors and investors to intimately recognize the actual problems faced by customers. By discerning these specific needs, they can ensure funding dollars drive innovations that align with a customer’s maturity level and priorities.
While AI's transformative potential is palpable, our findings also suggest a prevailing sense of careful adoption. Even among academic medical centers surveyed, only 12% have a concrete AI strategy, though a whopping 69% are either currently developing a strategy or likely to begin one soon. On the other hand, zero freestanding hospitals surveyed have an AI strategy, and only 20% are building or are about to build one.
This disparity underscores the vast spectrum of AI adoption, which will likely persist into the near future as systems grapple with post-COVID concerns.
Still, quick wins in AI adoption are emerging. Streamlined documentation, enhanced patient communication, and improved patient engagement stand out as areas where AI can make an immediate, palpable difference. Think of saving an hour daily for physicians through smarter documentation or improving patient interaction quality through AI-driven communication tools. Other areas ripe for AI intervention include revenue cycle management and claims processing.
Cautious Optimism for Innovations
While the allure of AI is strong, it's essential to approach its adoption with care, given the potential risks involved, especially when patient lives are at stake. In many ways, the parallels to autonomous vehicles are clear. Self-driving car technology promises to make our roads far safer. At the same time, many consider the risk of innovation if accidents are a result of the technology.
We know that the promises of AI in healthcare are broad. However, the often-unasked question on everyone’s minds is “What are we going to do when AI messes up and we lose a patient?”
Many organizations in healthcare are watching carefully for that first AI lawsuit to help shape their decision-making around how, when, and why they decide to invite AI into the care setting. Even still, our research has made it abundantly clear that—considering 2023’s staffing shortages and the wide adoption of LLMs—healthcare’s future includes AI.
We always look forward to our partnered research with Bain & Company. The coming years will undoubtedly see a mix of enthusiasm and caution, success stories, and learning curves.
For a deeper dive into our findings and insights from this year into spending trends, technological priorities, and the future landscape of healthcare, please explore the report here.
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