Keeping healthcare affordable in the coming years and improving the quality of care at the same time are two different, sometimes opposing challenges. Many healthcare organisations are finding the solution for their twofold challenge in digital innovation. Thomas London, senior leader of McKinsey’s Health System Transformation, believes digital innovations are indeed the way to go for all stakeholders in the healthcare ecosystem. He explains why in an article written together with Penelope Dash, a senior partner in McKinsey’s London office.
Bottom line: digital technology can unlock substantial value through lower spending and superior healthcare delivery. Nothing new here either, but London and Dash still offer some good food for thought.
Increasing healthcare costs
Healthcare is claiming an ever-increasing share of national wealth. According to the Organization for European Cooperation and Development (OECD), healthcare expenditure in OECD countries has been rising at a rate one to two percentage points faster than their GDP. If this trend continues, healthcare costs would represent more than 25 percent of France’s GDP—and more than 35 percent of the US’s—by 2050.
As for medical errors and other safety lapses: they persist even in the strongest health systems and are often caused by inconsistencies in care and lack of adherence to good practices. This can vary enormously across healthcare systems and among the care providers within them. Some examples:
- Maternal mortality is four per 100,000 births in Italy, but more than three times higher in the US, at 14.1
- Postoperative pulmonary embolisms and thrombosis affect 865 of every 100,000 patients leaving a hospital in France, but just 107 in Belgium, a difference of 706 percent.
- Regular albumin screening to prevent complications is provided annually for 88 percent of diabetics in the Netherlands, but for fewer than 30 percent of those in France.
Medical errors are the third-most-common cause of death in the US after cancer and heart disease, accounting for more than 250,000 deaths every year. But addressing these issues and the variations in care practices and quality that cause them is, next to the bloating budgets, the second priority for all countries when it comes to ensuring the future of healthcare systems.
Digitization offers benefits in both costs and quality, often at the same time. One large OECD country estimated that just implementing existing digital technologies, could reduce healthcare expenditure between 7 and 11.5 percent. At the same time, it could improve quality through measures such as monitoring chronic conditions more effectively to avoid acute events, increasing adherence to best practices, improving clinical decisions, and promoting healthier behaviours.
Digital innovation can transform healthcare in three main ways:
1. By improving care-delivery models through seamless data and information exchange.
2. By harnessing the power of data through advanced analytics and transparency.
3. Through process automation.
1. Improving care-delivery models through seamless data and information exchange. The rise of chronic conditions makes it more important to integrate patient care pathways across care settings. Digital solutions can promote a seamless exchange of patient and other information and data between providers. Tele- and mobile health solutions improve effectiveness and efficiency of maintaining patients at home, avoiding unnecessary hospital stays, improving clinical outcomes, and reducing the costs of care. Finally, the use of digital tools to enhance clinical decision making and the monitoring of treatment protocols can significantly reduce variability and increase adherence to good clinical practice.
2. Harnessing the power of data through advanced analytics and transparency. More and more applications that rely on healthcare data analytics are available to support patients in understanding and managing their medical condition and influencing their medical care. New data-enriched tools and algorithms are constantly emerging, including decision-support tools, online services, and smartphone apps. Providers making crucial clinical decisions about diagnosis and treatment will increasingly be supported by tools such as algorithms that compare a patient’s clinical and other data with large datasets. Analytics also promises to support drug and device developers, such as by helping them identify the patients likely to respond best to a particular drug (personal medicine). Finally, the collection and publishing of data on outcomes and quality of care can also allow healthcare systems to modulate tariffs and orchestrate competition among providers based on their quality of care. This can be a major lever for raising the overall standard of care across healthcare systems.
3. Process automation. Many healthcare processes can be digitized, including appointments, logistics, patient records, admissions, human resources and rotation management, and billing. In addition to providing efficiency gains, automation can also improve patient care: for instance, remote monitoring of intensive-care units via patient sensors and a central control room led in one case to a 22-percent reduction in mortality rates and a 23-percent reduction in the average length of hospital stays. Digitization can also bring great benefits to clinical trials, such as improving the efficiency and reliability of clinical data collection and trial monitoring and optimizing trial design through the use of modeling tools.
Obstacles limit achieving the obvious benefits of digitization. Healthcare systems often struggle with issues such as limitations and constraints on data collection, access, and sharing; resistant mind-sets; an excessive focus on risks; misaligned incentives. To help overcome these obstacles and accelerate digitization, healthcare systems should seek to:
- Enhance data and modernize data infrastructure, management, and access. To capture the full benefits of data analytics, healthcare systems will require ready access to a hugely expanded array of data. They should consider investing both to enhance the data collected (for instance, through the development of patient cohorts and registries and the collection of data on patient-reported outcomes) and to develop their data-analytics capabilities, as value will reside as much in algorithms as in the data itself.
- Legacy systems are unlikely to be able to cope with these demands, so a new, modern data infrastructure will be needed. One possible model could be an open cloud-based platform aggregating data from different sources, with an operator who manages the infrastructure and data access, promotes data collection and quality, and provides a means for patients to manage their informed consent.
- Create incentives to support new practices and mind-sets. Digitization involves a shift toward a more data-driven culture with continuous and transparent evaluation of professional practices, that in turn requires changes in the mind-sets of healthcare professionals. To achieve such a shift, providers need to develop and communicate a clear change story that outlines the benefits as well as the risks of a digital transformation.
- Digitization will require changes in professional training and medical education as well as training, funding, and other forms of support for healthcare professionals and institutions as they implement new digital tools and methods.
- Adjust legal and regulatory frameworks to improve data exchange. The sensitive nature of healthcare data requires its usage to be regulated to protect patients’ privacy, but scope remains to enhance data exchange. Today’s fragmented country regulations often leave health data in silos, impeding projects that rely on diverse sources of information.