A new study from Orem health care research and consulting firm KLAS Research and Bain & Co., a Boston-based consultancy firm, shows U.S. health care providers and payers are boosting their investment in AI, cybersecurity and other IT areas to support innovation and improve operations. The survey of about 150 U.S. health care provider and payer executives found 75 percent have increased IT investments over the past year, a trend that is likely to continue. These are among the findings of Bain and KLAS in their “2024 Healthcare IT Spending Study.”
“Payers and providers are continuing to place a premium on technology, a sentiment that has become increasingly true in the aftermath of the COVID-19 pandemic,” said Eric Berger, partner in Bain & Co.’s Healthcare & Life Sciences and Private Equity practices. “While the focus on ROI has increased, we’re also finding these organizations are more inclined to experiment with technology, especially with advanced solutions, such as AI and natural language processing, to improve outcomes.”
“The need is there,” said Adam Gale, CEO of KLAS Research. “Providers and payers are making it clear that there are tremendous opportunities for vendors who are committed to providing innovative, secure, and reliable solutions that drive real outcomes and can show a real ROI.”
The study found providers are focusing IT spending on IT infrastructure and services, such as cybersecurity, clinical workflow optimization, data platforms and interoperability and revenue cycle management. IT infrastructure and services emerged as a top priority as providers seek to strengthen cybersecurity to mitigate the risk and impact of attacks and improve the integration of current IT applications. Cost management and electronic health records integration and systems interoperability remain provider IT pain points.
Payer organizations are prioritizing IT investments in care coordination and utilization management as well as in claims processing and payments. The study found payers are investing in provider payment tools, modernizing their core administrative processing system infrastructure and purchasing more payment integrity solutions.
More than 65 percent of payers cite legacy technology as a key problem. Aging infrastructure limits scalability and flexibility; maintaining these systems imposes significant cost. While legacy tech has been a long-standing issue for payers, significant system modernization entails a multiyear effort and poses operational risk that many chief information officers are loath to assume.
Cybersecurity has emerged as an imperative for payers as well, with IT leaders citing cybersecurity as a reason for increased technology investment.
AI technologies have made inroads across health care, with providers and payers exploring AI-supported solutions to enhance decision-making, improve operational efficiency and deliver care and engagement. Providers have made strides over the past year, with about 15 percent of providers in the survey saying they have an AI strategy today, a stark increased from just 5 percent in 2023. Roughly 25 percent of payers say they have an established AI strategy in 2024.
