Private healthcare providers reluctant to invest in digitalisation

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Private healthcare providers reluctant to invest in digitalisation

A recent report released by NATHEALTH Healthcare Federation of India noted that digital adoption remains nascent in private healthcare providers even though preliminary acknowledgment of the benefits offered by digitalisation is high.

The report Pathways to Scale Adoption of Digital Health in India, produced in association with Arthur D Little, is based on a survey of 30 private healthcare providers. According to the report, 93 per cent of the respondents agreed that digitalisation is beneficial for the healthcare ecosystem and 80 per cent of the respondents used digital tools for the most common use case, i.e. Only 7 per cent of providers have adopted digitalisation across all operational use cases, according to the customer data demographic and clinical provider.

As a large and growing healthcare market with a large demand for digitalisation and sufficient government backing in the form of the Ayushman Bharat Digital Mission ABDM, the report aimed to understand the status of adoption of digital health.

The report said that the lack of awareness about benefits of ABDM integration is a major deterrent across the board. Larger players are concerned about the implications of sharing internal digital systems and data, including the possibility of security breaches of confidential customer data, according to the report.

The resistance of smaller players comes from their view towards digitalisation as an additional cost rather than a worthy investment. Some smaller players are reluctant to invest in digitalisation to avoid regulatory scrutiny, said Barnik Chitran Maitra, Managing Partner, Arthur D. Little India South Asia.

The report said that digitalization using cloud-based solutions could add 3 -- 6 per cent to provider bottom-line with a payback period of less than 18 -- 36 months, and could add up to 3 -- 6 per cent to provider bottom-line with a payback period of less than 18 -- 36 months. Benefits for players range from capture cost efficiencies in procurement, clinical operations to reducing revenue leakages in pricing or discounting to increasing revenue realization by bundling more value-added services e.g. The report said that wellness programs are part of the overall offerings. It said that providers using ABDM-compliant systems can capture more than 80% of the benefits of digitalisation with a 60 per cent reduction in Capex as opposed to on-premise systems.

In ADL's provider-side survey, at least 40 per cent of respondents believed that high financial cost is the key barrier to digital health adoption. Small players are unable to digitalise despite having the resources to do so. 80 per cent of the surveyed providers said they had enough financial capabilities to expand digitalization efforts, but only 53 percent are planning to or have already digitalized the end-to- end. The report said that the resistance stems from efforts to avoid regulatory scrutiny due to increased transparency brought about by digitalisation.