Executive Summary: ISG Provider Lens™ Healthcare Digital Services - U.S. 2023

09 Feb 2024
by Rohan Sinha, Sneha Jayanth, Jan Erik Aase

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ISG Provider Lens™ Healthcare Digital Services - Healthcare Platform Implementation Services - U.S. 2023

ISG Provider Lens™ Healthcare Digital Services - Payer Digital Transformation Services - U.S. 2023

ISG Provider Lens™ Healthcare Digital Services - Provider Digital Transformation Services - U.S. 2023

Digital transformation continues to reshape the healthcare ecosystem

Digital revolution in the U.S. healthcare sector

Digital transformation continues to be a priority among service providers operating in the U.S. They continue to revolutionize healthcare by enhancing efficiency, accessibility and quality of patient care. Integrated electronic health records (EHRs) streamline information sharing among healthcare providers, fostering a more cohesive and patient-centric approach. Telemedicine services use digital technologies to enable remote consultations, improving access to medical expertise and reducing geographical barriers. Data analytics and AI empower healthcare organizations to derive meaningful insights, leading to more informed decision-making, personalized treatments and proactive health management. Overall, the synergy between digital transformation and IT services is reshaping the healthcare landscape, driving innovation and optimizing patient and provider outcomes.

Embracing equity, SDOH and holistic patient care

In the U.S., a transformative wave is reshaping the healthcare landscape, propelled by a collective push for equity and a deepened understanding of social determinants of health (SDOH). Conventional industry roles are becoming obsolete, with payers transcending their traditional functions to actively share the responsibility of overall health with their members. Behavioral change is the linchpin for favorable health outcomes, prompting providers to acknowledge the impact of people’s actions on their well-being. Providers face the challenge of proactively identifying the most vulnerable individuals, leading to a strategic focus on engaging with communities, homes and workplaces. This strategic shift has intensified the reliance on electronic medical records (EMRs) and SDOH, employing descriptive and predictive analytics, ML and natural language
processing (NLP).

Public health promotion programs and the cultivation of self-care awareness are critical to enhancing individual and population health outcomes. Simultaneously, there is a growing inclination to treat individuals as unique entities. Elevated awareness of behavioral and mental health has underscored the necessity for proactive care, driving an increased emphasis on treating people as individuals by applying advanced data models and algorithms for early diagnosis and prevention. Integrated health adopts a comprehensive and wholepatient approach, incorporating insights from SDOH to foster a more holistic and personalized
healthcare experience.

Rise of payviders in healthcare

In the U.S. healthcare industry, the payvider model, a mutually beneficial partnership between a healthcare payer and a provider within the Medicare domain, is picking pace. This shift is motivated by a desire for  health systems to play a more active role in risk management, pursue growth opportunities and gain a competitive advantage. Two primary factors fueling this trend include the industry’s emphasis on value-based care and the Quadruple Aim, a framework where providers are incentivized for delivering quality care over
quantity. Collaboration between providers and payers is seen as a strategic response to the challenge of providing cost-effective healthcare, with shared goals centered around reducing financial risk, ensuring profitability and enhancing overall patient experience. Payvider models take various forms, from healthcare providers creating their insurance plans to payers and providers forming alliances, illustrating a dynamic evolution in healthcare delivery and payment structures. The influence of the Centers for Medicare and
Medicaid Services (CMS) and the emphasis on Accountable Care Organizations (ACOs) further contribute to the proliferation of payvider models, fostering a landscape where collaboration and quality-driven outcomes take precedence over traditional fee-for-service approaches.

EHR/EMR transformation

The current market landscape is witnessing a substantial upsurge in the demand for extensive electronic medical records (EMR) and electronic health records (EHR) solutions. Leading providers in the EMR/EHR space are strategically forming partnerships with service providers, marking a paradigm shift in how healthcare organizations approach their digital health infrastructure. These service providers are positioning themselves as the go-to partners for healthcare providers seeking comprehensive assistance, not only in EMR migration and implementation but also in navigating intricate installations and managing ongoing services.

The ability to offer customized solutions and tailor their approaches to meet each client’s unique and specific requirements sets these service providers apart in an industry where one-size-fits-all solutions fall short. This
adaptability gives them a distinct competitive edge. Moreover, these partnerships extend beyond the immediate implementation phase, often encompassing ongoing support and optimization efforts.

Transforming healthcare through integrated platform innovations

Service providers in the healthcare provider sector are increasingly focusing on enhancing platform  capabilities. These platforms integrate consulting, advisory services, ecosystem partnerships, solutions, and delivery capabilities with industry expertise to facilitate a smooth client transition. The platform empowers the creation of flexible, reusable, secure solutions, incorporating the design of conversational and generative user experiences. The service capabilities of these platforms address specific areas for both payers and providers. They span from enrollment and eligibility, claims processing and risk and compliance for payers to EHR, ERP and clinical decision support for providers. Most leaders in the healthcare platform implementation services quadrant provide a comprehensive range of services catering to payers and providers. (Refer to Figure 2 & 3 – Platform table)

GenAI And the move toward co-pilots

The emergence of generative AI (GenAI) has profoundly disrupted what was once deemed achievable, and businesses are just starting to explore the innovative capabilities it brings. In conversations with various service providers, GenAI consistently emerged as a focal point of interest. Its applicability spans industries, and the healthcare sector is actively recognizing its potential, crafting use cases for both payers and  providers. Many providers have committed to substantial investments over the next five years to develop GenAI solutions.

These investments encompass creating solutions, establishing COEs, providing extensive training to  employees and aligning with the evolving technological landscape.

The ISG Buyer Behavior Study on the insurance industry involved interviewing 120 senior IT and business leaders about their technology and business objectives, challenges, and plans. About a third of respondents say they are moving cloud computing, training and employee support initiatives to a steady state. However, ISG expects GenAI to impact technology capabilities and project economics to such a significant degree in the next two years that every decision about active projects will have to be completely re-assessed. (Refer to Figure 1)

Another significant point of discussion revolves around the concept of GenAI copilot, representing a method to harness GenAI efficiently and effectively. While only a few providers have implemented solutions in this domain, most have plans in the pipeline. Copilots hold the potential to address various business and clinical challenges within the healthcare industry, including clinician burnout and the pursuit of interoperability.
Notably, a growing trend of copilot solutions is entering the healthcare arena. A case in point is Microsoft’s introduction of the Nuance DAX Copilot, a GenAI-based clinical documentation product, in 2023. This innovative tool has already gained traction among many doctors. EPIC has partnered with Microsoft to  expedite the adoption of GenAI-powered copilot tools, aiming to assist clinicians in saving valuable time.

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