Digital Health Technology: How to Overcome the ROI Challenge
When it comes to digital health technology, it’s time to focus less on traditional measures of ROI and more on the value of patient empowerment.
Digital health technology is transforming the way hospitals operate. This evolution has been accelerated by the COVID pandemic, most notably with the rapid adoption of virtual care. However, a system-wide change was underway before the pandemic hit. Over the past several years, more attention has been put on patient engagement applications, patient experience software and other similar technology. In many areas of Canada, provincial and regional digital health strategies have been established. These strategies, in addition to the internationally recognized Quadruple Aim framework, encourage hospitals to leverage digital health technology to achieve better outcomes and provide better experiences for patients and providers, all at a lower cost.
However, despite the push and pull pressures to embrace digital health technology, a major hurdle to adoption has been an emphasis on using traditional models to quantify its elusive return on investment or ROI.
The Role of ROI in Hospital Decision-Making
When we think of ROI as a measure, we commonly think of corporations and their bottom lines. However, ROI is also used to inform decisions in hospitals. With limited resources and public reporting requirements, ROI has been a helpful means of making fiscally responsible and justified decisions, especially when large capital investments are involved. Moreover, for many hospital purchases, ROI is relatively straightforward to calculate.
However, despite the usefulness of ROI, the metric also has some limitations. These limitations are being seen when it comes to quantifying emerging digital health technology. It’s difficult to measure the tangible and intangible benefits that result from an engaged patient or a positive personal healthcare experience, and it’s even more difficult to assess these at a time when change is happening rapidly.
So, with pressures to digitally transform, yet a lack of metrics to quantify the ROI of those changes, what are hospitals to do?
Overcoming the ROI Measurement Challenge
When it comes to digital health, here are three ways hospitals can overcome the challenge of measuring its ROI:
1. Start by looking at the data and research that does exist
Though we have limited data, we should start by looking at research on the value of digital health technology (we’ve put together a list of resources here), as well as data from other countries (such as the US, UK, Australia and United Arab Emirates). Even though each country’s context is unique, we can learn generally from the experiences of others. This can help in drawing preliminary conclusions about the ROI of digital health technology.
2. Remember that digital health ROI isn’t just about the technology, it’s also about changing patient behaviour and outcomes
Investing in technology that improves speed, costs less or does two things for the price of one is easy. On the other hand, quantifying the ROI of how technology changes patient behaviour is complex. An engaged or activated patient is often described as one who is educated, informed and empowered. If patients are equipped with the knowledge and tools needed to make informed choices, they can take more control over their care, which one study showed resulted in an 8-21% decrease in their healthcare costs.
Although this is strategically aligned with the goals of most hospitals, many end up discounting it because they either don’t or can’t measure it. Instead, use these metrics to get started, be clear on the patient behaviours and outcomes you hope to impact, and look for technology that also provides data for better modelling. By putting patient empowerment at the center of decision-making, we are creating value–even if the impact is difficult to measure at first.
3. Get started and the numbers will come
Right now, due to COVID, patients, providers and systems are primed for change. More has changed in the last 10 months than in the last 10 years. Policy makers say that virtual care is here to stay, patients are growing more accepting of healthcare technology, and the applications we have available today are more advanced than they have ever been. While the impact of new digital health technology may not be 100% clear from the outset, many technologies are meant to evolve and be optimized as you go. Seize this opportunity to get started, because studies across the world have proven the benefits and there is a good chance your hospital will experience them too.
In Canada and globally, we are in a period of uncertainty and disruptive change. At a time like this, we can continue down the path of leveraging digital health technology to help support both the patient and provider experience, while also increasing hospital operating efficiencies and resulting in better health outcomes.
Rather than spending time focused on chasing elusive ROI, it is time to adopt a new approach to value creation that puts patient empowerment at the center of decision-making.