15 December 2022

Digital health not just a cost to be recouped

Investors Money Technology

Spending in healthcare is a tricky line to straddle. When lives and health are at stake, justifying funnelling money into one area over another can be a minefield.

And when it comes to digital health, decision makers have traditionally viewed it as a cost that needs to be recouped, according to a perspective paper published in the MJA this week.

But, the authors argue, this is a short-sighted and incomplete way to understand the value of digital health.

“Recouping the costs from an information technology investment in the short to medium term is unlikely due to the large upfront expense and the limited efficiencies that can be delivered in the short term,” the authors wrote.

The paper calls for a shift away from the business case model of evaluating the value of digital health, as the benefits of digital health far exceed financial recoupment.

“The traditional business case approach, which many existing digital health evaluation models adopt, fails to consider the value of the downstream effects of a connected digital health ecosystem, which enables sophisticated technological advances such as artificial intelligence, machine learning and precision medicine,” they wrote.

Instead, the authors advocate using the “quadruple aim” framework to measure health system performance:

  1. Enhance patient experience
  2. Improve population health
  3. Reduce cost per patient
  4. Improve work-life balance for staff

Not all of these aims are easily measurable like profit and loss evaluations. However, the authors argue that they offer a more comprehensive and sophisticated view of the value of healthcare initiatives.

To illustrate this, the authors used EMR implementations as a case study.

Despite EMRs being widely understood as quality improvement platforms – not just information technology – their implementation in hospitals is still controversial as they are disruptive, lead to slower workflows, and can contribute to clinician burnout, according to the authors.

They argue that traditional business cases evaluating the impact of these EMRs only evaluate the short term (within three years), which only includes building consistent and sustainable capability.

They also fail to assess the longer-term value:

  • Within five years – optimising; integrating, growing and expanding digital health and digital workforce capabilities;
  • Within 10 years – transforming; scaled digital health.  

It is easy to measure efficiencies in the short term, the paper argues, giving one example of the reduction in printing costs.

But long-term benefits such as quality and safety enabled by data, analytics and new models of care are not captured in traditional business cases.

But, when using the quadruple aim framework, the authors were able to evaluate other elements of value that, “…do not yet have a market price but have a definite economic value, whether positive or negative, for the stakeholders.

“This includes items such as workforce satisfaction, which can be negative in the short term due to disruption and positive in the long term due to learned improved work practices,” the authors wrote.

They argued that the upshot of not measuring the value of digital health implementations properly was that digital investment may not be prioritised over competing health care demands.

And when health systems are starting to understand the quality and safety benefits of digital health implementations – factors such as reduced unwarranted variation in care, reduced preventable harm, improved patient centredness, and enhanced opportunities for monitoring, risk management, and quality improvement – decision makers may do well to understand the full value of their investments.