7 Reasons Healthcare Digital Transformations Fail
Digital transformation has been reshaping organizations and entire industries since the 1990s, eventually reaching the healthcare sector in the 2000s. Over the last two decades, healthcare organizations have adopted digital technologies to innovate their business models, improve care delivery, and enhance patient outcomes.
Leaders across the industry are focused on pursuing the many ways in which digital can improve healthcare. So why do so many organizations fail to achieve success in their healthcare digital transformations? Research shows that a remarkable 70 percent of complex, large-scale digital transformation programs fail to achieve their stated goals.
To do our part in reducing these failures in the future, we’ve highlighted the most common 7 factors that cause Digital Transformations Failure.
Healthcare Digital Transformation is not about technology
Healthcare digital transformation is not about implementing a piece of technology. It’s about enabling healthcare organizations to provide high-quality and ethical healthcare in a new, digital way. It’s also about using technology to optimize the experience at every step of your patient’s journey. And finally, it’s about improving your organization's efficiency, sticking to the specific ideas of each of your stakeholders, and meeting your business goals.
Dr. George Westerman of the MIT Sloan School of Management said, “If you think about digital transformation as two words, we pay too much attention to the digital and not enough to transformation. It’s not a technology challenge, it’s a leadership one.” Your organization needs to combine digital activity with strong leadership to turn technology into transformation and outperform others. It is called “digital maturity”.
Faisal Hoque, the author of the book REINVENT, mentioned, “When leaders think about digital transformation, they inevitably focus their thoughts on the technology itself.” There’s much more to digital transformation than just the tech as it allows organizations to “shift their business models, processes and organizational culture” using digital technologies as a tool to adapt to changing customer behaviors”.
Hoque also emphasizes the importance of great culture to support a successful digital transformation strategy. In fact, 85% of senior technology decision-makers in the UK believe that technology implementation empowers employees to deliver value for their organization, but people and culture are critical drivers. The respondents of this study estimated that prioritizing the importance of technological change and people and cultural change could increase revenue by 44% over the following year.
Lost Focus on the patient experience
Back in 2012, an industry survey asked top hospital leaders what was necessary to improve the patient experience. They mentioned new facilities, private rooms, food on demand, bedside-interactive computers, unrestricted visiting hours, and more quiet time so patients could rest. The only problem was that it wasn’t based on what patients really wanted; it was about what hospital executives thought to be essential drivers of the patient experience.
Tony Ambrozie, Senior Vice President and Chief Digital & Information Officer at Baptist Health, South Florida, said, “The primary purpose of a digital transformation is to serve the customer better, and then the organization and its employees.” Patients that love their experience with your healthcare services are more likely to come back to you. Poor experiences result in losing your current and any new patients that could visit you.
Luck of vision and unclear goals
Digital transformations in Healthcare fail because of “lack of a brutally clear vision and strategy,’’ as Tony Ambrozie from Baptist Health once stated. “But even with great vision, strategy, and support of the board, failures can occur without clear and crisp goals and targets along the way so everybody understands whether the success is happening and the transformation is successful.”
Instead of “digitally transforming the organization,” it is much more effective to focus on specific SMART goals. Failure to establish clear goals, vision, and plans can lead to a lack of alignment within your team. Not having everyone on the same page often results in failed projects, especially such complex undertakings as healthcare digital transformation. “Plans may be useless but planning is priceless,’’ Ambrozie said.
Your idea could be just exciting, but if you didn’t put enough effort into researching the potential challenges and the possible impact of your product/solution or simply exploring the whole process of making it digital, you could fail.
A great example here is the Tandem app. In 2016 the app was launched to find out that digital health is a tough space. Right after launching, the founders discovered retention was challenging and decided not to continue. The main reason is that with the initial MVP planning, they just didn’t anticipate the acquisition and retention challenges.
Will Sun, one of the Co-founders, when he was asked what he would do differently, mentioned: “We should have focused on validating the market first - i.e. whether people would be interested in helping with medications beyond those already using basic reminder apps, and if so, how we could reach them. Just because the problem exists doesn't mean it's ready to be solved”.
Keeping the right pace in managing your healthcare digital transformation
Former Chief Officer of Academic Health and Hospital Affairs, SUNY; founding president of Georgia Regents University, Ricardo Azziz, said, “If leaders move too slowly, they lead their teams into failure, into non-competitiveness. Relevance is lost. The ability to grow is diminished.”
On the other hand, “Moving too fast inevitably increases the chances of error... and making mistakes, regardless of their severity, is risky for leaders”, he said. “If leaders move too fast, they leave their communities behind.” Your team loses understanding of the vision, and the whole process becomes painful without any sense or belief in the effectiveness of those changes.
“The pace of transformation should be based on what our competitors are doing and how fast our global (not simply our local) environment is changing. The key to success as an organization is to get everyone moving forward to a similar beat”, he said. “Only then we will succeed.”
Missing out on interoperability
According to Bloomberg Law, at least 70% of US healthcare providers still exchange medical information using a fax machine. Primarily, nurses could heavily rely on outdated technologies. Even hospitals with the latest EHR technology may still use faxes. Why? Their EHRs often can’t share data across systems.
Steve Posnack, the deputy assistant coordinator in the Office of the National Coordinator for Health Information Technology, told Bloomberg, “It’s common for a healthcare provider to print records from an EHR and fax them to another provider, who then extracts the information from the faxed records to enter into the provider’s own EHR.”
The Bloomberg report shows that to move away from fax machines toward EHRs, your healthcare digital transformation strategy needs to include potential ways to enhance interoperability between systems.
Underestimating the effort
Organizations often underestimate the complexity of their healthcare digital transformation. They tend to forget that it is not a one-time exercise but a long-term journey for continuous improvement. Digital transformation failure can cost too much, not just in terms of money but also time and resources. The key to success is to stop trying to do everything at once.
Eric Kimberling, founder and CEO of Third Stage Consulting Group, spoke at Digital Stratosphere 2022 and mentioned that “One of the biggest reasons for failure is having unrealistic expectations and underestimating the amount of effort, time, resources and money a digital transformation project will take.”
“Digital transformation fails if there’s an overly ambitious scope and overly optimistic expectations of costs and time needed to complete the project,” he said. "That unrealistic expectation is a very real, common dynamic that actually leads to a lot of failures."
Healthcare digital transformation can require an appropriate budget, and you must spend time planning how to allocate your resources adequately.
Weak change management strategy
Louise Keogh Weed, program director of the Leadership Strategies for Evolving Health Care Executives program and a practice transformation specialist at the Harvard Medical School Center for Primary Care, said, “Change management makes you use every tool in your leadership toolbox to be successful.” It considers the various barriers to success as it is designed to foster new ways of thinking and behaving.
Gartner survey shows us that “over 80% of organizations manage change from the top down”. To lead effective changes, they need to rely on their workforce, not executives. McKinsey Quarterly Transformation Executive Survey shows that digital transformation failure is likely related to employee resistance and lack of management support. It can often be characterized by a lack of urgency, a reluctance to adopt, a fear of change, and a lack of clarity about “where we’re headed and why” by Deloitte. Having your stakeholders genuinely committed to change gives you a fighting chance for success.
How to increase the chances for healthcare digital transformation success in your organization?
Dr. John Kotter presented an 8-step process to execute an effective change management strategy based on his study of leaders’ and organizations’ attempts to transform and implement their strategies. Here’s what you need to do:
- Create a Sense of Urgency: address the importance of making changes to inspire your team to act immediately while exploring opportunities you can achieve together. Internal resistance to change is something to avoid.
- Build a Guiding Coalition: engage key stakeholders to guide the changes, coordinate them, and communicate its activities.
- Form a Strategic Vision: “Clarify how the future will be different from the past and get buy-in for how you can make that future a reality through initiatives linked directly to the vision.” Create a plan to implement this initiative.
- Enlist a Volunteer Army: bring together your key stakeholder to identify the pros and cons of this new plan. Be open to their thoughts and ideas to achieve the goals together.
- Enable Action by Removing Barriers: “Clear the way for people to innovate, work more nimbly across silos, and generate impact quickly.”
- Generate Short-Term Wins: it helps track progress and reward your stakeholders' efforts. Wins are markers of the result motivating your team to move forward.
- Sustain Acceleration: move forward with recommendations of your stakeholders. “The way that you can guarantee success in a difficult change… is to not skip any of the steps or the learnings”, (John Ham / COTY).
- Institute Change: monitor the efficiency of your changes and ensure your team has the required resources to use new habits. Your day-to-day operations should be running smoothly when your improvements are applied.
Why Tech-Azur for your Healthcare Digital Transformation
As a seasoned Digital Transformation company that specializes in Financial Services and Healthcare domains, Tech-Azur is a recognized leader, fully committed to driving digital transformation in Healthcare. We have developed a robust suite of components, including telemedicine, interoperability enablers, secure communication, billing management, and more, Tech-Azur Health Suite streamlines clinical and administrative processes while prioritizing patient care, operational efficiency, and regulatory compliance.