How to Respond to the Great Digital Disruption

Thought leaders, business experts and scholars alike have written and spoken volumes about what health care’s digital transformation will mean to the field. And with the continued influx of outside disruptors employing tech-based solutions from retail, insurance, tech, data and other fields, speculation has run the gamut as to the long-term impact on traditional providers.

For those wondering whether these new tech-savvy entrants will somehow displace or demolish incumbent health systems, the answer is no, according to a recent essay co-authored by several health care leaders in the Harvard Business Review.

The report was written by John Glaser, executive-in-residence at Harvard Medical School; Sara Vaezy, executive vice president and chief strategy and digital officer at Providence; and Janet Guptill, president and CEO of the Scottsdale Institute, a not-for-profit organization that helps more than 60 large, integrated health systems leverage information and technology to create more effective and equitable care.

Blending ‘Phygital Care’

Far from being dismissive of these new market entrants, the authors argue that providers and tech companies need to work together more closely to fully capitalize on their respective strengths.

Health care providers enjoy a “superpower of incumbency.” This will make it difficult for outsiders to displace traditional providers who have often served their communities for decades and in some cases more than a century — building up significant trust and local brand loyalty with patients.

Still, many health care providers could face an uncertain future if they refuse to transform themselves, the authors warn. Digital innovators can offer hospitals and health systems technology and insights to help solve their most challenging problems.

Traditional providers and tech companies need to meld into what is sometimes called “phygital care” — the blending of the physical and digital.

A more symbiotic partnership between providers and tech companies may be what’s needed to address the clear and present challenges facing health care. This includes high costs, improving quality and increasing access for the millions of people who live hundreds of miles from the nearest hospital or don’t have a primary care doctor.

To remain financially viable and thrive in this evolving era, those who deliver care need to follow a playbook that incumbents in other fields like banking developed when their businesses were being disrupted, the authors note.

3 Lessons for Thriving in the Digital Era

1 | Accelerate transformation.

Providers have shown great resiliency in transforming themselves when dealing with changing reimbursement models, the pandemic and moving beyond delivering care to address issues like social determinants of health.

2 | Explore mutually beneficial strategic partnerships.

Some health systems are forming deep technology partnerships with electronic health record companies, artificial intelligence (AI), big data and other firms. Four years ago, Mayo Clinic and Google entered into a 10-year strategic partnership using Google’s cloud services and tech skills and Mayo Clinic’s care delivery and medical research expertise. Providence St. Joseph Health is working with Microsoft to use AI to ease the administrative burden on clinicians.

3 | Establish digital innovation programs.

Invest in digital health companies and incubate your own digital innovators. Providence, Boston Children’s Hospital, Mass General Brigham, Cleveland Clinic and others have followed this path with success.