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Chief digital officers are now healthcare innovators

Two major health systems hired chief digital officers recently. Analysts say the decision could signal a shift in how healthcare organizations are tackling innovation.

Prat Vemana is closely studying hospital operations at Kaiser Permanente, where he was hired to create better digital experiences for both patients and staff and lead new technology adoption as the organization's first chief digital officer.

Vemana is bringing 10 years of experience to his new role after leading digital strategies across retail, travel, finance and defense industries. At Kaiser Permanente, he is establishing the organization's digital vision, a part of which is to make mobile and digital experiences more seamless for its more than 12 million members, patients and customers.

Vemana is not alone in his quest to transform how health systems operate and interact with patients. Within the last year, the Mayo Clinic has also hired its first chief digital officer. Mark Gilbert, senior research director at Gartner, sees the hires as signifying a shift away from supporting pockets of innovation to adopting an innovation mindset across the organization.

"Healthcare providers are looking at those CDOs as somebody who can both help achieve the existing business strategy by using digital capabilities, but, more importantly, craft a new business strategy that centers around those digital tools or capabilities," Gilbert said. "That's a breakthrough, and that's what Mayo and Kaiser hired."

Kaiser Permanente chief digital officer Prat VemanaPrat Vemana

The chief digital officer trend is not new to healthcare, but it could be gaining ground. According to a Gartner survey, 32% of healthcare organizations said they had a chief digital officer already. Of those that didn't, roughly 56% said they planned to hire a chief digital officer within the next 12 to 36 months.

Evolving role of chief digital officer

Most chief digital officers in healthcare today are using digital technology to improve an organization's business models or operating processes and are not often in charge of building new business models.

That's partly because the healthcare industry has been more inclined to create innovation centers, according to Gilbert. He said there are more than 50 different healthcare systems with innovation centers and that they've been tremendously successful. They are often led by chief innovation officers who focus on creating new business models and investing in startups and new technology.

That is slowly changing, Gilbert said.

Gartner senior research director Mark GilbertMark Gilbert

While innovation centers have been successful, they are often siloed from the day-to-day operations. Healthcare organizations are starting to realize that chief digital officers may be useful in breaking down that silo, according to Gilbert. CDOs are being asked to do more than improve on existing processes -- they're now being asked to craft new business strategies grounded in digital capabilities.

"The key sea change that you're seeing is that we're now hiring chief digital officers that report to the CIO who have responsibility for business transformation," he said.

At Kaiser Permanente, Vemana is charged with modernizing the organization's internal and external digital platforms and enhancing the patient experience in 2020.

He's looking at tools to help patients access care, ways the organization can accelerate virtual care offerings, how it can enhance in-person care experiences, as well as how it can enable seamless transactions.

Additionally, he said the cross-functional teams he oversees will be responsible for Kaiser Permanente's enterprise architecture, as well as adopting new technologies such as artificial intelligence, blockchain, IoT and cloud. Vemana reports to Dick Daniels, Kaiser Permanente executive vice president and CIO, with joint accountability to Kaiser Permanente CEO Gregory Adams.

"I'm part of the leadership team, and our digital journey is intertwined with the work of my partners in all of the other functions of IT, as well as our partnerships on the business side at the direction of the CEO," Vemana said.

Better digital experiences

Nigel Fenwick, senior vice president and principal analyst at research and advisory firm Forrester Research, said patient expectations are driving the push for better digital experiences.

Forrester vice president and principal analyst Nigel FenwickNigel Fenwick

"The expectations of patients are evolving because they're being set by their experiences with Amazon, Netflix, Uber," Fenwick said. "People become more acutely aware of what should be possible, so there's increasing dissatisfaction with organizations that don't deliver."

Delivering on those expectations has been a struggle for health systems and providers, which must adhere to strict regulatory and privacy requirements. But health systems may have to figure out how to do so soon, as federal regulators are in the process of mandating that health systems and providers adopt standardized APIs to make it easy to share health data. Fenwick said it will only take one or two healthcare organizations to change the perception of what the industry can do, which in turn "puts pressure on those that are not up to their game."

When that happens, the healthcare industry will need leaders like chief digital officers to enhance an organization's digital capabilities and provide a better digital experience for patients and providers, he said.

Gilbert said the skill set a chief digital officer possesses will be a critical skill set for healthcare organizations going forward.

"As we move more toward a digital health model that's more involved with preventative wellness, risk identification prior to a typical medical encounter, and chronic care management after a clinical encounter, the more we need those digital products and services," he said. "We need the skills of an individual who can understand how to build a business model around this and how to run a business around this type of non-face-to-face, virtual type of healthcare delivery model."

Hiring the right person for the job will likely fall to healthcare CIOs, since 70% of chief digital officers in healthcare today report to the CIO, according to Gilbert. 

Filling the CDO role

When filling the chief digital officer role, Gilbert said healthcare CIOs should look for someone with a strong background in technology, as well as in business.

A chief digital officer should have an IT background and a solid understanding of data management and analytics. CDOs will also need to know how to engage with patients and staff on digital platforms, an experience that could come from a CDO's past experience as a chief experience officer or another similar role.

For healthcare organizations, an ideal chief digital officer would also have some industry experience, although Gilbert believes having a medical background won't be as vital as IT and business experiences.

"Mastery of IT and digital IT is going to probably be No. 1," Gilbert said of a chief digital officer's skill set. "No. 2 is mastery of running and managing a business. Understanding, being willing to take on a revenue target. Then I think the aspect of engagement is going to be a critical skill set."

The title and role meant having the opportunity and the accountability to help shape the strategy and future of Kaiser Permanente as a digitally enabled organization.
Prat VemanaChief digital officer, Kaiser Permanente

Indeed, Kaiser Permanente's Vemana believes his experience building digital products and leading the digital strategy at Fortune 100 companies will come in handy as he incorporates current technologies to build better digital experiences at Kaiser Permanente.

He also cited his passion for artificial intelligence and machine learning, along with his experience building data science teams, as useful skills in his new role.

"The title and role meant having the opportunity and the accountability to help shape the strategy and future of Kaiser Permanente as a digitally enabled organization," Vemana said. "This includes having modern digital tools to drive efficiency for the organization's operational capabilities, as well as providing superior digital experiences at every touch point for customers, members and patients."  

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