Executive Summary: ISG Provider Lens™ Healthcare Digital Services - Germany 2021

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ISG Provider Lens™ Healthcare Digital Services - Payer Digital Transformation Services - Germany 2021

ISG Provider Lens™ Healthcare Digital Services - Provider Digital Transformation Services - Germany 2021

The Covid-19 Crisis and the Legislature Create Push for Digitalization in German Healthcare System

• The COVID-19 pandemic continues to keep the German healthcare system on its edge. The longer the crisis lasts, the more it exposes various weaknesses among healthcare vendors, especially in hospitals given a shortage of staff. These challenges further drive the transformation to digitalized processes and services and subsequently accelerate digitalization in the German healthcare system.
• In the wake of the pandemic, increasing efficiency has become a priority of those responsible for IT at healthcare vendors and payers in Germany. Other goals on the agenda include cost reduction, better client and patient service, optimized patient care, support for medical diagnoses, an expanded telemedicine practice, and improved medical care for rural areas in the long term.
• A certain set of different digitalization solutions such as systems based on AI, solutions for automation, and the provision of resources from the cloud helps achieve these goals. The latter focuses on addressing specific challenges faced by CIOs and vendors of digitalization solutions in the healthcare sector. With healthcare In Germany being a highly regulated industry, service vendors should demonstrate comprehensive technical knowledge as well as industry expertise and compliance to statutory regulations. Data protection, especially for patient data, is pertinent in terms of storing and distributing information on cloud platforms while strictly adherencing to statutory restrictions.
• At the same time, the legislature has a stimulating effect on the demand for digitaliza­tion solutions in the healthcare market. Two examples can be cited: electronic patient files have been mandatory in Germany since January 2021 and the German Hospital Future Act is intended to imcrease the digitalization of hospitals. Both government measures offer market opportunities for specialized service vendors.

COVID-19, Efficiency Pressures and Staff Shortages Drive Demand for Provider Digital Transformation Services

• Despite the ongoing vaccination activities, the German healthcare system is still reeling from the COVID-19 crisis. With the overloading of the health system, its weak points have become particularly apparent. Simple processes have reached their limits as the capacity of the health system has been exhausted in the course of the crisis. Many healthcare organizations have yet to implement meaningful measures for digitalization. The necessary increase in efficiency, for example through automation, is now a focus area. This will also help address the paucity of skilled workers particularly during the crisis. The shortage of staff for networking is currently a driving factor for digitaliza­tion. Even as resources are cut down, the German Hospital Future Act is intended to compensate for the digitalization backlog.
• In spite of these challenges, the German healthcare system is being digitized at a rapid pace. Vendors of digital transformation services benefit by offering a diversity of digitalization approaches and services. Expansive industry knowledge and business and IT-related consulting competencies will help drive success in this market.
• Seven vendors have been positioned as leaders of digital transformation services in Germany for this study. These include Accenture, Atos, CANCOM, Cognizant, Deutsche Telekom (Telekom Healthcare Solutions), DXC Technology and IBM.

The Legislature Influences the Market for Payer Digital Transformation Services

• Payers in the German healthcare system have a higher level of digitalization than healthcare vendors. At the same time, private health insurers are more advanced than federal health insurance companies. One of the reasons is the pressure to help private health insurers achieve efficiency, primarily among public limited companies compared to federal health insurance companies. In both segments, competition contributes to coercive digitalization for increased efficiency and improved client service. The demand of private health insurers and federal health insurance companies for digitalization services is also driven by the electronic patient file – a statutory mandate since early 2021. At the same time, there is large scope for digitalizing many processes that are still paper based.
• However, statutory regulations on the protection of patient data are an inhibiting factor for digitalization projects. Such regulations should be taken into account by digitali­zation vendors in their services targeting payers in Germany. In addition to the high demand for IT experts and a broad portfolio for payer digital transformation services, experts for sector-specific requirements and regulations are required.
• Five vendors were positioned as leaders of payer digital transformation services in Germany for this study. These include Accenture, Atos, CANCOM, Deutsche Telekom (TSI) and IBM.

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