A new 2022 Healthcare Provider IT Report from Bain & Company and KLAS Research drew a lot of coverage this week with a headline takeaway that served as a nice break from recent bleak healthcare forecasts:
- Providers are doubling down on software investments, even in the face of macroeconomic turbulence.
The research includes plenty of interesting data that’s worth checking out if you have half an hour to absorb it all, but here are the highlights for the visual learners with 3 minutes to spare.
- Over 75% of providers expect to make new software investments next year, and one-third plan to invest more than usual (Figure 1). This signals a turning point in the provider IT market as many orgs who have stayed on the sidelines are now looking to retool software roadmaps for a “new normal.”
- Of those investing heavily, nearly 80% cite labor shortages, inflation concerns, or restructuring (M&A, change in leadership) as the top catalysts (Figure 2).
- Providers are particularly interested in revenue cycle management, security, and patient intake solutions as they look to address rising margin pressure and improve the productivity of limited staff (Figure 3).
The other main point that the report drives home is that providers are feeling increasingly overwhelmed by their expanding tech stacks and the proliferation of new vendors.
- Over half are struggling with the flood of offerings and 24% believe that their existing tech stack keeps them too busy to stay current on new solutions (Figure 4).
- As a result, providers are actively trying to streamline their bloated tech stacks, with 72% attempting to expand with existing vendors before considering new ones and 63% looking to cut back on third-party software solutions over the next year (Figure 5).
The consensus among providers appears to be that falling behind on software investment isn’t the way to turn around struggling performance, and neither is overloading their staff with disjointed products. That seems like a telltale sign that we’re in for more consolidation, especially with the report concluding that software vendors should pursue bolt-on acquisitions and strategic partnerships to create sticky platform offerings in a crowded field.