Five key success factors for digital transformation in healthcare

07 October 2020 8 min. read

The healthcare sector is increasingly turning to digitisation to add value to patients, internal operations and innovation. Driving digital-driven change is however easier said than done – experts at Roland Berger outline five key success factors for making digital transformation a success. 

Cultivate a willingness to change

While there is obviously a technological dimension to digitalisation, its cultural dimension is equally important. The two sides need each other: If companies are not open to radical change, they will never successfully master the digital transformation. The biggest challenge is therefore to foster a culture that welcomes and enables the transformation to a digitally mature organisation. 

Innovative change management strategies that put people at the centre and encourage new ways of working on all levels simplify the process of adaptation. To do so, encrusted structures and silos must be broken up, hierarchies must be dismantled and agility must suffuse the way people think and work 

At Roland Berger, our experience shows that a digital transformation project only delivers lasting success if management and employees alike make permanent changes to their behaviour. The most powerful source of motivation is a sense of belonging to a group – in this case, a team comprising the staff and their boss. If everyone is convinced by the case for transformation, it will work.

In 2025, digital health will account for 8% of the overall healthcare market

But beware: Before new behaviours are introduced, it is vital to clearly define how the company as a whole plans to develop in the future. The new value proposition mapped out by a health insurer or an industrial company could, for example, see them transform into a data or tech company.

An open view and dare to think radical

Companies and providers in the healthcare sector must develop more sensitive ‘antennas’ for the changes going on around them. Building on that sensitivity, they also need early-warning systems. Scenario planning tools help players better assess the consequences for the market and their own competitive position. For example, one consequence could involve acquiring technological skills in certain areas. Another could entail teaming up with pioneers, or systematically setting up a dedicated ecosystem so that ideas can be developed more quickly and fast tracked to market readiness. 

As a basic rule, companies should work on the assumption that their markets will experience radical, disruptive changes. Tech players could emerge as direct competitors to incumbent firms, be it in research, diagnostics, therapy or the operation of a dedicated healthcare platform. That is why companies must also be willing to radically alter their business models. Do they need to occupy new or additional links in the value chain, for instance? 

In other words, do they need to rethink entire processes? As things stand, few players can yet match up with one leading healthcare company whose stated aim is to digitalise all its processes. 

Providers in best position to own patients

Focus on customer and use cases

Faced with a converging multiplicity of options, healthcare players must ask themselves which ideas and projects are really going to drive digitalisation and should therefore be prioritised. When doing so, providers must align themselves more closely than they have done in the past with the needs and wants of both healthy and sick patients: They must focus on concrete applications and use these as a launch pad for a rigorous reorientation. 

The B2C segment – such as the consumer goods industry, where very frequent customer tests are commonplace – shows the way forward: Projects that fail to deliver must be wound up quickly and without complications. At the same time, simply trying things out and gathering experience – especially through failure – needs to become more normal. In a healthcare context where strict regulations and quality assurance combine with many standardised processes, it is not always easy to take this path in practice. 

Prioritised applications should be defined, complete with standardised descriptions for all their many facets. This is important because, for the time being, a generally valid solution to interoperability issues in healthcare remains unrealistic. Health insurers need to go digital not only with their core competencies: They also need to develop new services and business lines – in data analytics, for example, and in the modelling and development of innovative services based on data analytics. 

Private health insurers must continue to focus on risk selection and underwriting. And in the pharmaceutical industry, vast potential for R&D in particular is being opened up by big data and artificial intelligence. Accordingly, companies that conduct research must in the future factor more parameters into their study designs and produce more meaningful analyses of these designs. One reason is that they ultimately need compelling arguments for new developments, in line with the principle of value-based medicine.

Global data volume growth in healthcare

Despite all the forthcoming changes, it is critical to ensure that healthy and sick people alike retain sovereignty over their data. That, at least, is a clear finding from most of the empirical studies conducted to date in Europe. Amazon and Google could play a prominent role in bringing together hitherto unused medical and consumer data. But European players too will catch up: One health insurer in Germany for instance is already charting this course by linking tracking data to routine data. 

Make use of cooperative ventures

Experience shows that the more radical the transformation, the more pressure will be placed on roles that have become ingrained over the course of decades. The mobility transition in the automotive industry, for example, has created a situation where former rivals now work together in many areas.

The same thing will happen in healthcare. And this means that the various players must operate more as trend scouts, keeping a lookout for cooperation partners who usefully complement their own capabilities. Alternatively, it is also conceivable to adapt procedures and models that have already become established as the standard in other disciplines. 

Incumbent stakeholders too must increasingly think in terms of ecosystems, even with hitherto unaccustomed partners – not least in order to selectively accumulate technological and data skills that let them cooperate to scale up new business models. This approach can be compared to that of public transport associations in Germany that create joint platforms for all timetables and tickets and regulate access to customer data. A central delivery platform could conceivably provide a similar service in the healthcare sector: a database in which anonymised patient data are stored and analysed in order to facilitate the best diagnostics, therapies and aftercare. 

The healthcare platform landscape is highly fragmented

Initial practical approaches already exist as innovative forms of cooperation and networks in healthcare. One focus in particular is on occupying the interface to the customer and tapping new areas of business. Cooperative networks with doctors would be one possibility in the pharmaceutical industry, but so too would partnerships with major tech players to improve access to patients. In medical engineering, the issue is to join up the entire supply chain: Companies could look for integrated solutions together with healthcare service providers, using this strategy to better establish services relating to the product in question. 

Stay realistic

For all the euphoria, it is important not to lose sight of economic necessities. As in the past, many interesting and/or innovative ideas in the realms of healthcare will not be implemented simply because they yield no measurable benefits. It is therefore all the more critical to expose each and every digitalisation project to regular reality checks. Good ideas will evolve into lasting success stories only if both providers and customers stand to benefit.

Using a Digital Maturity Index to evaluate ongoing digital projects is a good starting point for this kind of review cycle. Such an index records operational and strategic project outcomes and benchmarks them against similar projects.

Authors of the key success factors for digital transformation are Peter Choueiri, Morris Hosseini, Thilo Kaltenbach, Karsten Neumann and Oliver Rong – all five are partners at Roland Berger in Europe.