The New Era of Health Care IT

Wheeler Coleman, SVP and CIO, Blue Cross Blue Shield of Michigan

It’s an exciting time to work in health care information technology. Health care reform and the constant cycle of new technology are compelling health care organizations torethinkand refocus their long-term IT strategies. Is your company prepared for the new wave of emerging technology? Will your company survive or thrive in the new digital age? Will cloud, analytics and mobile technologies enable your company to not only be competitive, but win in the future?

"The adoption of emerging technology is the only way established companies will survive in the future"

The Digital Era

We are beginning an era where emerging technologies are converging, and having a profound impact on every industry and company, large and small alike. Health care organizations are continually analyzing their operations to meet the ever-changing demands of the industry and of consumers. The digital era will generate new opportunities, expand and create new markets and revenues.

Mature companies, many of which have been around for decades, will have to transform existing processes, operations and capabilities to leverage the new generation of digital technology. This necessary transformation will allow them to compete with new companies and new business models. The adoption of emerging technology is the only way established companies will survive in the future.

Unsustainable Health Care Costs

At a time when demands for technological capabilities to support business transformation are at an all-time high, health insurers are operating in an environment where expenditures must decrease. Rising health care costs are one of the industry’s most immediate challenges. The United States spends approximately $3 trillion on health care per year, representing 17 percent of the total U.S. gross domestic product. The U.S. has the most expensive health care system in the world, yet often scores poorly when it comes to health outcomes, quality and efficiency.

The underlying issue of unsustainable health care costs has driven rapid change in the industry. Health care is increasingly becoming a consumer-driven industry, leading traditional insurance organizations to rethink how to continue to offer an attractive portfolio of insurance benefits to members. As consumers take a more active role in purchasing their coverage, there’s increased demand for transparency around costs and quality.

In order to compete, health insurance companies cannot just do technology for technology’s sake alone. Insurers have to lower costs while increasing value, and bring competitive products and services to market. One way to reduce infrastructure costs is by removing inefficient and misaligned programs, in order to be more nimble and quick to respond to market demands. Organizations need to road map their existing information technology capabilities to meet the current and future demands of their business and industry. As they prepare to implement new technology solutions, they must ensure the right measures are in place to provide proper security, integration and scalability, while reducing complexity and duplicate solutions.

Digital Data gets Larger

At a recent Gartner conference, IBM CEO Ginni Rometty spoke of the exponential growth of digital data.

"Digital data will double in two years,” said Rometty.“Eighty percent of that data is dark and will never be used.” Rometty sees every company as a technology company. If companies want to win, they will have to get really good with analytics to make key business decisions.
This idea of leveraging data to make key decisions is critical to the health care industry. We’ve all heard of the “internet of things,” the network of physical objects collecting data. Imagine a world where everything from your treadmill to your shoes is collecting data. Not only would this give individuals a 360 degree view of their own health and behavior, but it could also be shared with doctors, enabling the medical community to make more informed recommendations to patients. Advanced analytics drives this type of innovation.
As digital data grows, the opportunities are endless. At the same time, this increased volume of data creates new challenges for IT operations responsible for storing, managing and mining that data.

The Rise of Cloud Computing

Oracle CEO Mark Hurd estimates that in the next few years more computer servers will be purchased for cloud computing than for corporate data centers. This is a significant change in how consumers and businesses will purchase their future computing power.

The shift from premise data centers to cloud computing will significantly lower costs. Cloud computing is often compared to “utility computing.” You pay as you go, and can scale accordingly. This frees up capital for other uses, which will drive additional innovation and creativity within the industry.

Rather than dealing with the complexity and costly disadvantages of managing a physical data center, businesses will be able to purchase comprehensive data solutions. This will allow new companies to compete against incumbents without large investments in software, hardware or platforms. On the other hand, mature organizations will either have to start from scratch or retrofit and leverage their existing assets to take advantage of emerging technologies.

However, Rometty explains that “cloud computing is no longer about cost, it is about innovation and speed. It enables innovation to be quicker than ever before."

As the health care industry changes, so must health care organizations. Investing in emerging technology and more importantly the talent needed to create and manage that technology is no longer optional. It is critical to a company’s ability to lead in providing solutions to the challenges they face, and win in the new digital age.

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