2023 Healthcare Technology Industry Trends: Top Challenges for CIOs

The healthcare industry began to breathe again in early 2022. As the environment became more stable, IT investments increased and organizations further integrated telemedicine into the care delivery model. CIOs resurrected backlogged investments in IT and started addressing high priority items, and CISOs continued their daily challenges fighting the ‘out of control’ cyberattacks. However, the recent economic downturn has slowed the pace of activities and the investment outlook remains uncertain for 2023. Once again, healthcare IT leaders will need to call upon their creative genius in order to balance the need for increased technology investment as a way to solve healthcare IT challenges.  

Top challenges for CIOs 

In the year ahead, I believe these three challenges will demand the attention of CIOs and require continued IT investment: 

1. Cloud. Many organizations recognize that cloud services promise highly available, fast and secure infrastructure. However, achieving these results from major cloud services providers has not been straight forward or easily attained. Instead, applications, infrastructures and networks may need to be re-architected to take full advantage of the cloud environment. What’s more the Total Cost of Ownership (TCO) can be ambiguous. 
2. Predictive analytics. Healthcare operators face mounting pressure to take advantage of volumes of internal and key external data sources. Providing usable analytics and predictive analytics can assist physicians and clinicians in the diagnosis and treatments of patients. The challenges in this discipline are many. For example, organizations find selecting the right vendor products and partners perplexing, solutions lack the sophistication needed to be effective and delays creep into internal development efforts.
3. Workforce alliance models. With the shifts in workforce, organizations are looking for creative ways to attract and retain talent while staying within budget. Now is the opportunity to reexamine strategic partnerships between external firms and healthcare organizations. However, the key to success is for alliance models to be well-designed and executed. 

While addressing the trends above are critical for establishing a solid foundation for innovation, we should keep an eye on machine learning, artificial intelligence, and precision medicine, because they will be agents that push digital transformation forward, too. Of course, cybersecurity takes priority and demands vigilance when it comes to reducing the risk of an attack and reinforcing detection and response plans to prepare for cybersecurity threats.   

A closer look: 2023 healthcare IT trends 

1. Cloud. As discussed in the 2022 trends forecast, cloud migration accelerated post-pandemic to achieve high availability, easy access, and more. However, cloud migrations are not easy but present a unique set of challenges like these: 

• Application architecture. An assumption by developers has been that data sources and application code, including any interfaces, reside in the same environment such as a data center. Based on that assumption, some applications are very chatty and will require constant interactions between the application, data and external sources. Depending on the cloud environment selected, transaction fees can exponentially increase the cost of applications hosted in the cloud versus on-premises. In these cases, many of these applications have to be re-architected to reduce these transactional chatters between applications and data sources. That task is not easy.  
• Network and other infrastructure. By the same token, some modifications to the network and other infrastructure may be needed to allow for improved interactions with the applications and data sources that are no longer on-premises. This may even require some cache servers to be installed at local levels, especially locations with poor Wide Area Network or Internet bandwidth. While these types of infrastructure modifications are not as complex as the application space, they still may require additional investment and time to accomplish.   
• Long-term contracts. Organizations may have existing long-term contracts with vendors (applications and infrastructure) that need to be considered. Contract changes could add redundant costs for a duration, making the move to the cloud even more expensive than originally estimated.   

None of these are deal breakers and they certainly do not take away from the justification to move to the cloud for strategic reasons. However, these complexities need to be considered carefully to avoid surprises when calculating the total cost of ownership (TCO).  

2. Analytics. Analytics really encompass distinct types of activities:  

• Descriptive analytics document what’s happened in the past and are great for analysis, performance improvement, and so on. Most organizations have done a good job of creating general analytics tools and reports for clinicians and administrators. These tools allow team members to make better and informed decisions on anything from diagnoses to management.  
  
  What may be missing in most cases are general data governance models that aid in managing the vast demand on analytics and use of data. There exists some level of confusion regarding the numerous vendor tools that claim to achieve extraordinary results for organizations so thoroughly vet vendor claims during the selection process.  
• Predictive analytics help forecast trends or depict what might happen in the future. The second and more challenging is the area of predictive analytics whereby systems will use both internal and external data to predict potential future outcomes and provide meaningful information to the end users to address an impending situation.
  This discipline has been more difficult to achieve than organizations accounted for because it often requires advanced coding knowledge and development expertise that most organizations do not have internally. Also, vendor products are not readily available in the market. Products on the market are in their infancy with either limited use or unstable companies backing them. The best application of advanced analytics that we have witnessed are taking place in retail and these players are starting to dip their toe in the healthcare market. This area is ripe for accelerated growth in 2023 and beyond. 

3. Alliances. Outsourcing became a craze in the 80s and 90s until companies began to realize it did not work for all cases. We observed some common pitfalls with traditional outsourcing arrangements for both parties: 

• Loss of intellectual property 
• Reduced customer satisfaction 
• Cost reduction didn’t meet projections — the arrangements just weren’t as cost effective as expected  
• Outsourcing companies with weaker contract arrangements lost money and either had to negotiate their way out of the deal or use low-cost labor, which degraded the quality of the work. 

All in all, these challenges didn’t leave a good impression on the industry and the demand for outsourcing started to cool. As a result, CIOs started building up their local IT teams with resources and systems to accommodate insourcing. However, this created duplicate organizations across the industry at every healthcare system. Multiple help desk environments, shared services support organizations and if you happened to have one of the primary EHR vendors, an army of support team members.   

CFOs were dismayed but didn’t have enough knowledge to find alternatives. The labor shortages post-pandemic has brought the discipline of outsourcing back into focus.   

Today, organizations are smarter about outsourcing, and they are looking at flexible staffing models that are more tailored to their needs. Several key factors make the modern flexible staffing model different: 

• Measurement-based contracts incentivize both parties. This means there’s skin in the game for both sides to collaborate and be successful in achieving determined metrics and key performance indicators (KPIs). 
• Organizations retain intellectual capital with the outsourcing company  
• Flexible resourcing at every level is built in to the model 

4. Cybersecurity. So what do all of these trends seem to have in common? Moving data centers to the cloud. Using internal and external data for analytics. Increasing interactions with external companies. (Don’t forget trends from previous years like more online interactions with patients through telemedicine and patient portals, etc.) All of these trends mean one thing: More opportunities for exposure and for the bad actors to take advantage of healthcare data. 

In 2023, we will continue to see increased investment in cybersecurity in the following areas:   

• Threat and vulnerability management 
• Risk assessment 
• Identity and access management 
• Supply chain risk management 
• Monitoring and incident response 
• Disaster recovery and business continuity 
• Backup and recovery, including a backup strategy to preempt ransomware attacks  

Although many cloud platform providers offer certain cybersecurity services as part of their package, those alone will not be sufficient. Healthcare organizations must continue to invest in cybersecurity tools and processes. A trend that has perhaps gone unnoticed for too long is the stress and burnout experienced by many cybersecurity professionals and chief information security officers (CISOs).  

Bottom line: Cloud, analytics and alliances are HIT trends that hold the promise of more reliable, useful, and scalable technology. Change in technology should not be taken lightly but carefully evaluated for the benefit it delivers to healthcare providers, care teams, patients and communities. Some trends come and go, but those technologies that remain true to the tenets of helping ensure patient safety and delivering quality patient care are worth a closer look.