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According to a study by Bain & Company and KLAS Research, three-quarters of U.S. healthcare providers and payers increased their IT spending last year, with artificial intelligence (AI), cybersecurity and IT infrastructure among the top areas of investment.
AI adoption is gaining momentum, with 15% of providers and 25% of payers reporting an AI strategy by 2024.
Providers and payers invest in different areas.
But all organizations must balance financial pressure with the promise of return on investment (ROI), said Aaron Feinberg, author of the report and a partner in Bain’s Healthcare, Life Sciences & Technology practices.
“They are rigorously evaluating the business cases for new spending, hoping that the new solutions will generate a compelling return on investment over a short payback period,” he told Healthcare Finance News.
Excitement for AI technology continues to grow, but regulatory concerns, costs, and accuracy issues remain barriers to broader AI implementation.
WHY THIS IS IMPORTANT
Despite significant investments, challenges such as cost management and electronic medical record (EMR) integration remain persistent issues for healthcare providers.
“Clinical documentation solutions are generating the most excitement and early adoption by providers,” Feinberg said. “GenAI’s pilots are resulting in very significant reductions in documentation workload, which is mitigating clinician burnout.”
Feinberg noted that key factors driving AI adoption in healthcare are the maturation of use cases that drive significant ROI. Vendors are directing IT budgets toward clinical workflow optimization, data platforms, and revenue cycle managementaccording to the results of the survey.
Payers, meanwhile, are focusing on modernizing core administrative systems and improving care coordination.
About two-thirds of payers cited legacy technology as a major barrier. This is prompting efforts to replace outdated infrastructure, and many are investing in payment integrity solutions to streamline complaints handling.
Legacy technology remains a major problem for payers and there is no “silver bullet” for this pervasive challenge for large payers, according to Feinberg.
“Most payers continue to modernize in small increments, testing solutions with smaller lines of business or regions before taking the plunge to migrate larger parts of the business,” Feinberg said.
Payers see the most opportunity in applications around contact centers and other forms of member support, allowing them to improve member satisfaction through greater responsiveness and personalization.
THE MOST GENERAL TREND
The report also highlights the impact of the recent cyberattack on Change Healthcare. Seventy percent of organizations reported being directly impacted, prompting a push to strengthen cybersecurity.
Feinberg says healthcare organizations can adopt best practices to strengthen their cybersecurity measures, including auditing their systems and those of their vendors for potential vulnerabilities. They should also ensure they have the right technical talent and cybersecurity expertise.
“There is a risk that smaller organizations will view these audits as purely executive and superficial operations,” he said. “As a result, many will not strengthen their defenses in any meaningful way.”
THE HIMSS The Healthcare Cybersecurity Forum will be held October 31-November 1 in Washington, DC. Learn more and register.