June 21, 2022
Is now the right time for a more direct conversation about healthcare technology?
More than ten years into the concerted effort to expand the use of information technology in the nation’s healthcare system, it feels like a certain reality has sunk in. Almost all community hospitals in America have electronic health records (EHRs) now, and the idea that these tools will dramatically transform how care is provided seems somewhat quaint.
This is not to say that health tech expansion is a failed experiment. Far from it. Personalized care and new insights through big data weren’t really possible a couple of decades ago. The promise health technology offers is still very exciting, and it’s clearly within reach. But the basic process of providing quality care remains the same, only now it’s done with newer, shinier tools.
And the cost of providing that care—the seemingly inexorable march of healthcare costs as a percentage of gross domestic product—continues apace. Billed by many as a tool for bringing costs down, the idea that health tech will pay for itself has not been realized.
“Every year you age, health care technology changes — usually for the better, but always at higher cost,” writes healthcare economist Austin Frakt. “Technology change is responsible for at least one-third and as much as two-thirds of per capita health care spending growth.”
Yes, Frakt is talking about all technology, not just IT like EHRs, but the assertion remains unaltered. New technology ratchets up costs.
But is this the product of IT tools that are correctly priced based on the value they provide or perhaps some slightly unwarranted enthusiasm nurtured by unrealistic expectations?
The evidence is starting to lean toward the latter.
Global funding for digital health ventures fell 36 percent in the first quarter of 2022. Yes, technology funding across the board declined in the wake of the pandemic, but health tech experienced the most dramatic decline. After 23 health tech IPOs in Q4 of last year yielded lackluster results, 2022 has seen just one offering, and the expectation for the current year is for more mergers and acquisitions than public offerings.
Water does, after all, eventually find its natural level.
Disruptive as a market correction is for some, Medsphere believes the current adjustments are warranted and perhaps overdue. Much of health IT has been overpriced for years now. Doctors are frustrated with what many IT tools can’t yet do, and administrators have to be concerned with the lackluster value they get from the very expensive systems they put in place.
The fact is most hospitals of all stripes are overpaying for health IT and all are probably buying functionality that is unneeded and seldom used. While it may have been true once upon a time that “nobody gets fired for buying IBM,” the deleterious impact on budgets of the wrong heath IT decision now can also determine who stays and who goes.
Medsphere offers affordable solutions and services priced and designed to meet the needs of American healthcare facilities that don’t benefit from huge budgets. Our subscription service model enables a wide variety of critical access, community, and behavioral health hospitals and clinics, as well as urgent care centers, to acquire robust health IT products and services without sacrificing other clinical initiatives. Our business model and partnership philosophy also give larger healthcare organizations the opportunity to control costs while still acquiring effective health IT products and services.
Emerging from a pandemic and with the prospect of a recession on the horizon, is it time for your organization to make value and affordability a higher priority?
Attending HFMA? Medsphere would like to schedule a bit of time to explain how we can improve the care you provide and your bottom line. To set up a meeting with a Medsphere representative, please contact Rich Lewis at email@example.com or at 314.616.2459.