The healthcare industry has witnessed significant shifts in IT investment strategies following the Covid-19 pandemic. Both providers and payers have prioritised technology advancements to mitigate operational disruptions and enhance care delivery. With a growing focus on return on investment (ROI), technology solutions such as cybersecurity and generative AI have gained traction, even as regulatory challenges persist. A recent report from Bain and KLAS Research explores the evolving IT landscape in healthcare, examining providers’ and payers’ investment priorities and the impact of cybersecurity and AI on future decisions.
Cybersecurity: A Driving Force in IT Investment
Cybersecurity has become a critical concern in healthcare IT, especially following high-profile incidents like the 2024 cyberattack on Change Healthcare. Providers and payers have ramped up spending to protect sensitive data and ensure compliance with evolving regulations. Providers are directing significant resources toward bolstering IT infrastructure to safeguard patient information and mitigate potential threats, mainly as cyberattacks grow more sophisticated. This includes auditing third-party solutions and building redundancy in critical systems to minimise vulnerabilities.
Payers, who have long grappled with legacy systems' complexity, also emphasise cybersecurity in their IT strategies. The need to protect member data while streamlining IT architecture has led many payers to focus on integration and eliminating outdated technologies. This renewed focus on cybersecurity is expected to continue shaping vendor selection, with organisations prioritising solutions that offer strong security measures alongside operational efficiency.
AI Adoption: Opportunities and Barriers
The healthcare industry is increasingly adopting artificial intelligence (AI) technologies, with providers and payers exploring AI-powered solutions to improve clinical decision-making and operational efficiency. Providers have piloted AI in clinical documentation, reducing administrative burdens and enhancing patient care. Generative AI is being tested for its potential to analyse vast datasets, identify patterns, and generate actionable insights. These applications are particularly promising in clinical workflow optimisation, where they can streamline processes and improve resource utilisation.
Conversely, payers are using AI for predictive modelling, analytics, and member engagement. AI-driven chatbots and predictive tools are helping payers manage contact centre demands and deliver personalised care to members. However, despite the optimism surrounding AI, several barriers hinder widespread implementation. Regulatory concerns, legal challenges, and issues around AI accuracy, such as hallucinations, continue to slow adoption. Moreover, both providers and payers recognise the need for robust governance frameworks to ensure the responsible use of AI in healthcare, particularly in sensitive areas like patient care and privacy.
Streamlining IT Systems for Greater ROI
In the post-pandemic world, ROI has become a pivotal factor in healthcare IT investments. Providers and payers seek solutions that deliver immediate benefits while reducing the complexity of their technology stacks. For providers, clinical workflow optimisation remains a key focus, with efforts to reduce clinician burden and improve the integration of existing IT systems, especially electronic health records (EHR). Revenue cycle management (RCM) also remains a priority, as organisations seek to ensure they are compensated fairly for services while managing labour costs efficiently.
Payers are similarly focused on modernising their claims processing and payment systems to reduce medical loss ratios and improve the quality of care coordination. However, many payers hesitate to overhaul legacy systems due to the cost and risk involved. Instead, they are taking a piecemeal approach to modernisation, often preferring to work with existing vendors to streamline their tech stacks. This trend reflects a growing preference for solutions that integrate seamlessly with current systems while delivering high ROI, especially in payment integrity and member care management.
Conclusion
As healthcare providers and payers navigate the challenges of a post-pandemic world, IT investment remains a top priority. Cybersecurity concerns shape investment decisions, driving both sectors to fortify their defences against rising threats. Meanwhile, although regulatory and technical hurdles remain, AI holds great potential to transform clinical workflows, member engagement, and operational efficiency. With a focus on ROI, healthcare organisations are seeking solutions that offer rapid value and easy integration with existing systems. As these trends unfold, the healthcare IT landscape will continue to evolve, offering new opportunities for innovation and improved patient outcomes.
Source: BAIN / KLAS
Image Credit: iStock
