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February 21, 2019

Digitalization in Healthcare – Alleviating Growing Pains Amid Electronic System Implementation

MHT Partners  | Healthcare Investment Bank

The year is 2019, and terms such as “Cloud Storage,” “Big Data” and “Artificial Intelligence (AI)” have evolved from foreign, idealized concepts to familiar, tangible solutions for problems plaguing businesses across many industries. Implementation of digital-based systems to assist with the collection, storage and manipulation of data seeks to increase efficiency in operations, but it can also present hurdles for industries with long-established workflows, such as healthcare.

Over the past decade, the healthcare sector has experienced a monumental shift to computerization – more than half of all Americans currently have health information stored in a decentralized data storage software system (e.g., Epic, Cerner, Meditech). The introduction of “EMRs” (electronic medical records) to patient care was designed to enhance the interoperability of medical data, and in turn streamline processes to produce better outcomes. In lieu of paper diagnosis/treatment forms, lab order slips, vital sign charts and hospital ward records, EMRs offer digitized, real-time patient records accessible directly, securely and remotely by authorized users. A patient’s clinical data can be collected and stored in a system that shares the information with other healthcare providers and organizations (i.e., hospitals, laboratories, specialists, pharmacies, workplace clinics).

With a full view of a patient’s medical history, providers can make better-informed decisions concerning the delivery of care. Many EMR solutions leverage AI to gain greater insight into analytics and enhance standardization/interoperability in patient portals. In theory, the EMR concept offers massive improvements to our current system, but in practice, the integration of this technology comes with significant costs.

Upgrading existing hospital software systems is certainly not inexpensive, but it represents a mere fraction of the costs associated with implementing the technology. During the early stages of integration, hospitals and clinics are forced to reduce the number of admissions and appointments to give personnel time to learn and familiarize themselves with the new system. This lost patient revenue, coupled with expenses for tech-support assistance during the implementation phase, account for the majority of the upgrade’s total cost. In addition to the financial obstacles, the introduction of EMR software raises obvious concerns with respect to HIPAA compliance and the privacy of protected patient health information.

Adaptation to this new technology has also caused more headache than benefit for providers in many cases due to the magnitude of disruption caused by uprooting conventional processes. To ensure that these tools are leveraged to deliver maximum value, a handful of companies (and private equity groups) have developed solutions to ease the use of EMRs and other electronic healthcare platforms for providers. Recognizing the opportunity to assist with the integration process, many private equity groups have channeled funding into companies developing EMRs usability solutions: CitiusTech Inc. (General Atlantic), Hayes Management Consulting (Primus Capital), Nordic Consulting Partners (Silversmith Capital Partners) and Sagacious Consultants (acquired by Accenture).

MHT Partners, a leading healthcare services investment bank, believes that more complete patient information available from EMRs will enable providers to make educated care decisions quickly, improving patient care while mitigating safety risks. If you would like to learn more about MHT’s healthcare services advisory practice, please e-mail Taylor Curtis (tcurtis@mhtpartners.com), Patrick Krause (pkrause@mhtpartners.com), or Alex Sauter (asauter@mhtpartners.com).

Source: The New Yorker, Why Doctors Hate Their Computers

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