Hospitals and health systems are no strangers to small margins, but the current economic climate means there is an even greater need to be efficient operators, regardless of any payer negotiated payment rate increases, says Steward Health Care System chairman and CEO Ralph de la Torre. With all of these factors at play, how are health systems considering future investments in digital health? Are health systems pulling back the throttle? And, what should digital health companies be doing to be the most attractive option? Steward Health Care System: Innovating around Challenges And as big tech and retailers continue wading into the care delivery waters, it puts even more pressure on hospitals and health systems to up the ante when it comes to digitizing healthcare delivery and investing in digital health capabilities. Moreover, many of these newer care entrants have the existing tech infrastructure and capabilities to provide patients with a more digital, consumer-friendly experience. “New entrants in the marketplace are disintermediating traditional care models, including high-tech companies such as Amazon, an explosion in street-corner retail converting to care centers, virtual-first companies such as AmWell, and finally, payers as providers,” said Marx. More Options, More Competitionīoth hospitals and health systems continue to face competition from burgeoning retail and ambulatory care centers as well, where even traditional players are exploring new models of care. Marx, a veteran health IT leader and former chief information officer (CIO) at Cleveland Clinic, sees the nursing shortage, “generally-modest reimbursement rates,” and the shift to outpatient and hospital-at-home models as adding to the “bearish reality” that hospitals and health systems have faced in recent years. “There are multiple forces at work colluding to erode profitability,” says Ed Marx, CEO of healthcare consulting firm Divurgent.
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