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Discover everything you need to know about digital transformation in healthcare, including its benefits and challenges.


The Significant Role of Digital Transformation in Healthcare

Posted by Angela Davis on February 22, 2023
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The impact digital transformation in healthcare will have on healthcare services and patient care is widely expected to be revolutionary. But we’re not quite there yet.

According to Deloitte, 92% of survey respondents said they hoped digital transformation would lead to improvements in the patient experience. Yet 60% described themselves as being only midway through their digital transformation journey.

It’s clear that integrating digital technologies into the existing healthcare ecosystem poses specific challenges. Nevertheless, it’s also evident that there are huge benefits to be reaped from successfully implementing digital innovation in healthcare.

In this article, we explore some of those challenges and benefits in more detail. We also look at a few practical examples of digital transformation in healthcare, which are already used by many healthcare providers.

What is digital transformation in healthcare?

Digital transformation means moving from using old legacy systems to modern digital technologies that enable new ways of delivering enhanced services. For the healthcare industry, this could mean a new era of improved patient care via healthcare services such as telemedicine or providing wearable medical devices to improve diagnostic protocols.

More generally, leveraging the power of Big Data and the Internet of things (IoT) has the potential to revolutionize the patient experience and vastly improve efficiencies in the delivery of patient care. Not only does this imply meaningful improvements in real-world patient health outcomes, but it also means a significant reduction in costs for healthcare organizations.

Given the advantages to be gained from implementing a digital transformation strategy, why is it taking so long to achieve? Let’s take a closer look at the biggest challenges faced by healthcare organizations on their digital transformation journey.

Challenges involved in transforming to a digital healthcare industry

Cost of transformation

New technologies aren’t cheap. For many healthcare companies, the prospect of investing in new digital technologies can seem difficult to justify within their business models. Executives sitting at the decision-making level don’t always have real-time feedback from those on the ground delivering patient care.

So, it’s understandable that many are unwilling to commit the financial resources required to achieve the kind of digital innovation healthcare can deliver. This is particularly true during increased inflation and sharply rising costs. 

A recent study found that 63% of healthcare and pharmaceutical industry professionals in North America expected rising inflation to slow down the pace of digital transformation.

Infographic showing the impact of inflation on digital transformation initiatives.

Image source

However, in the healthcare industry, it doesn’t pay to stand still. As medicine becomes more and more specialized and tailored to the individual patient, established healthcare providers will face increased competition from startups that put digital strategy first.

Healthcare organizations may think they can’t afford to invest in digital transformation initiatives—but in the long term, they can’t afford not to.

Fear of moving forward

We’re all human, and many of us find change difficult. There’s no doubt that the prospect of starting your digital transformation can seem overwhelming. That applies to all stakeholders—not just healthcare professionals but patients too.

After all, we’ve grown used to how healthcare services have worked in the past. Bringing advanced information technology and other new technologies into the mix can seem intimidating at first. This can be particularly tricky when it comes to older patients, many of whom may feel a little uncomfortable at being exposed to radical changes in their patient experience.

However, with sufficient guidance and support, many older patients can adapt very well to digital innovation. In fact, many embrace it and eventually thrive on it. For example, how many seniors do you know who managed to learn to use video conferencing software to keep in touch with their grandchildren during the COVID pandemic? 

Establishing new processes

A large part of the challenge in implementing digital transformation in healthcare successfully is that it’s not just about buying flashy new equipment. It requires a complete shift in mindset as well. That means adapting your workflows to accommodate entirely new processes.

Take the appointment-booking system, for example. Legacy systems are often set up with a focus on face-to-face appointments, but in the tele-health era, you may find a much larger percentage of routine appointments are conducted remotely.

This has all kinds of implications for care delivery. Since patients no longer need to travel, you may find there are fewer cancellations. It also means that when cancellations occur, it might be possible to fit other patients in at very short notice. Taking advantage of these new digital healthcare possibilities means putting in place entirely new ways of working. 

Shortage of software integrations

Ideally, different software systems should work well in tandem to deliver a flawless user experience. In the healthcare industry, this could mean being able to pull health data from laboratory results or insurance data from medical insurance providers and automatically updating electronic health records.

In practice, it’s not so simple. Unfortunately, the lack of standardization across healthcare market systems makes it difficult to achieve perfect integration.

That said, things are changing. As the healthcare industry moves toward adapting to the new digital technologies becoming available, more and more life sciences and healthcare tech companies are springing up to cater to the digital needs of healthcare organizations.

Within any individual healthcare company, another challenge can be how to update legacy systems that work well enough for old processes but appear difficult to update for the new digital healthcare era. 

If a healthcare provider is reliant on old systems for its day-to-day operations, the potential disruption caused by the downtime required to update the system may seem like an insurmountable problem.

In this case, the stumbling block for digital transformation usually turns out to be the so-called “middleware.” This term refers to existing integration layers of software that developers have piled on top of the original mainframes. 

This can lead to the mistaken belief that there’s simply no viable way to implement digital transformation initiatives without suffering serious business interruption. Fortunately, there are solutions. 

That’s because most legacy systems themselves are actually quite flexible. With the correct information technology expertise, making the shift to digital healthcare can be achieved without hurting the bottom line or damaging patient trust.

Data protection and privacy policies

When implementing any kind of digital strategy, data privacy and cybersecurity have to be placed front and center. That’s true in any business sector, but nowhere more so than in the healthcare industry. The value of sensitive health data cannot be overstated, and keeping it secure is of paramount importance.

Healthcare providers know that complying with legislation such as HIPAA (the Health Insurance Portability and Accountability Act) is essential. But progressing along the digital transformation journey can mean facing new compliance challenges. 

If you plan to share information and healthcare data across systems, for example, you need to put sufficient guards in place to be able to do so without risking the security of that data.

Benefits of digital transformation in healthcare

We’ve established that there are a number of challenges to implementing digital transformation in the healthcare industry. For quite a few healthcare organizations, the difficulties inherent in committing to the process can appear overwhelming. 

Gartner estimates that 63% of healthcare companies are facing unprecedented disruption to their business caused by issues such as internal organizational changes, cost pressures, compliance difficulties, and shifting consumer demand. 

Infographic showing responses to the question “Disruptions looming, are healthcare organizations prepared?”. 41% answered “Fragile”. 22% answered “Fit”. Image source


So, when weighing up the pros and cons of investing in digital transformation, it’s crucial to remain focused on the positives. And there are many of these, both for patients and healthcare organizations.

For patients


The cost of healthcare in the US weighs considerably on household budgets. That’s not only via insurance premiums. According to the Centers for Medicare & Medicaid Services, total national health expenditure reached $4.1 trillion in 2020, of which 9% was paid by households as out-of-pocket expenses.

The potential for digital healthcare innovation to deliver excellent value is, therefore, a huge plus for patients. Maximizing efficiencies in the delivery of patient care via the use of new technologies and processes will mean fewer dollars wasted.

That’s before you consider how using artificial intelligence and wearable tech will herald a new era of disease-prevention-led care. Stopping a health problem before it manifests as illness represents the best value of all in any healthcare system.

Streamlines processes

The lack of joined-up thinking in traditional patient care delivery can often be detrimental to the overall patient experience. Time lags in accessing test results or obtaining a referral to the chosen clinician can complicate what should be a smooth and straightforward process.

With the advent of digital innovation in the healthcare market, these problems will ultimately disappear. The end goal of digital transformation in healthcare is to provide a seamless patient journey from start to finish.

Improved patient experience

But that’s just one way in which digital innovation will improve the patient experience. More generally, healthcare providers will be able to offer new ways of working that deliver previously unheard-of benefits for patient health.

The ability to use new digital technologies will enable patients to monitor their health metrics on an ongoing basis. This means they’ll have more freedom to manage self-care in concert with their physicians, becoming true stakeholders in terms of their health.

Secure medical data

Putting effective systems in place to secure patients’ medical data may seem challenging at first. However, modern cybersecurity software offers a higher level of data security than many traditional storage methods.

With modern digital tools, healthcare organizations can ensure crucial health information, such as patient EMRs, is stored safely and shared only when necessary. Patients should have no fear their records will go missing or fall into the wrong hands.

Better communication among teams (clinical and otherwise)

Digital innovation has led to a plethora of new communication options. Not only can patients continue to see their physicians face-to-face if they wish, but they’re also able to connect via other platforms, such as online chat or video calls. Prescriptions can be sent digitally to a pharmacy or dispensary for easy collection or delivery at the patient’s convenience.

Because communication across clinical teams will improve as a result, it should be much easier to keep the patient informed in real time at every stage of the care delivery pathway. 

A recent report by Grandview Research forecasts that the use of digital healthcare systems in the US will grow at around 10.7% per year until 2028. This highlights the importance of digital experience platforms in healthcare delivery.

Chart showing the US healthcare digital experience platform market size in USD million between 2018 and 2028. 

Image source

Additionally, digital transformation initiatives can help improve communications with stakeholders, such as insurance companies and other payers. These new technologies will facilitate speedy approvals and reduce bureaucratic hiccups, allowing patients to manage their healthcare and treatment schedules without it taking up most of their day.

Enhances time management and decision making

Ultimately, the time and effort saved for patients will be considerable. Being able to access healthcare services via a variety of digital platforms will simplify the process of obtaining care.

The fact that all relevant health information and patient data will be readily available in digital format will also make it easier to reach the right medical decisions quickly. For many patients, this will have a hugely positive impact on their peace of mind.

For the healthcare industry and organizations within it

Reliable services

The ability to access timely and accurate data will enable healthcare organizations to deliver a vastly improved customer experience. No longer will physicians and other healthcare professionals have to juggle piles of paperwork. This will also allow for a reduction in administrative costs across the board as processes become more efficient.

It’s a little-known fact that the US spends five times as much per capita on administrative costs in the healthcare industry than the average for other wealthy countries. Digital transformation will create opportunities to tackle inefficiencies in healthcare delivery, leading to more consistently reliable services.

Improved communication between healthcare professionals

Too often, diagnosis and treatment are held up by delays in communication between healthcare professionals. Perhaps a lab report takes too long to come through to the primary physician’s office, or maybe one person in the chain is on vacation, so important health information sits on their desk until they return and pass it on.

At best, this can be frustrating for patients. But for some more serious conditions, where a timely diagnosis is of the essence, the outcome can be disastrous. With digital procedures in place, these problems can be avoided. Healthcare providers and other stakeholders will be able to implement automated protocols that ensure high-quality, rapid communication every time.

Accessible health records

The federal government began using an early version of EHRs (electronic health records) as far back as the 1970s. At the time, the Department of Veteran Affairs started using a system named VistA, originally known as the Decentralized Hospital Computer Program (DHCP).

Several decades on, electronic health records have evolved to become more sophisticated, but they’re sometimes unreliable in practice. Clinicians often report poor system response times, and a single system crash has been known to effectively shut down clinics for hours at a time as patient data cannot be retrieved.

It’s no wonder, then, that EHRs have still not been universally adopted throughout the healthcare system. Indeed, in the 2019-2021 period, only 75% of specialty hospitals were using them.

Chart showing the adoption of electronic health records by hospital service type between 2019 and 2021.

Image source

Digital transformation will enable the creation of new systems to facilitate the sharing of critical health information. Using a cloud-native hybrid approach, existing data can be integrated with new cloud-based infrastructure to allow clinicians ready access to patient health data on demand.

Easy appointment setup

One of the most obvious advantages healthcare professionals will encounter on a day-to-day basis will be how easy it is to work with a digital booking system for appointments. Although many clinics already use some form of digital booking, existing systems are often centralized and not well integrated into other processes.

An important goal of any digital strategy is optimizing systems for ease of use. Cloud-based booking tech allows for appointments to be made in multiple locations using a variety of devices. This makes for a much slicker and more responsive booking system. 

Patients will be able to select the appointments they want at a time that suits them with only minimal involvement from administrative staff. And, as we’ve already mentioned, the increased use of telemedicine in patient care will enable appointments to be created, deleted, or rebooked in a more efficient way, ultimately reducing wait times and allowing healthcare organizations to serve more patients.

Real-time health metrics updates

The analog patient experience goes something like this. You make an appointment to see your physician either when you have symptoms that need to be investigated or else for a check-up to make sure everything is as it should be. Between those appointments, neither you nor your healthcare provider has any idea how your health is developing.

Digital transformation means moving toward a world where regular monitoring of patient health becomes commonplace. Wearable devices will feed back real-time data to clinicians, who will be able to use advanced analytics tools to make more accurate diagnoses and more timely interventions.

Platform optimization

Digital healthcare platforms bring every aspect of patient care delivery together in one place. From accessing EHRs to tracking medication and monitoring health conditions, all of this can be done via one unified gateway.

Digital innovation enables the optimization of these platforms for high-quality care delivery. Healthcare providers will thus spend much less time accumulating all the health data required to make care-related decisions. 

This is good news all around. Clinicians will benefit from being able to make better use of their time while patients can rest assured they’re receiving the very best in high-quality care.

Digital health transformation trends

We’re already seeing new technologies having an enormous impact on care delivery. Here are a few of the most promising trends emerging across the healthcare market today.

On-demand healthcare

In the 21st century, we expect many services to be available to us on demand. For our entertainment, we might fire up Netflix or Amazon Prime Video and choose whatever takes our fancy. Or, for those nights out when we want to leave the car at home, there’s the Uber app. It’s understandable, then, that as consumer tastes and expectations evolve, many patients are seeking out a similar approach to healthcare.

On-demand healthcare is an umbrella term used to describe anything that puts healthcare within patients’ control. This could mean, for example, being able to book appointments or access health information using their preferred platforms, such as websites or mobile apps. The focus is on smart, easy access to healthcare when we want it and how we want it.

Big Data 

The potential for leveraging Big Data to transform healthcare is a genuinely exciting prospect. On the level of individual patient care, being able to draw on large banks of relevant data enables enhanced patient engagement, earlier diagnosis, and more effective intervention.

On a larger scale, Big Data has huge implications for vital healthcare industry sectors, such as drug development. Improved access to healthcare data makes it much easier for researchers to do genuinely groundbreaking work.

Eventually, it could prove critical to effective public health management. In the case of epidemics, for example, real-time access to the latest information will allow epidemiologists to track the progression of outbreaks throughout the community. In turn, this will give the public health officials responsible for emergency decision-making the best information possible to base their policies on.

Wearable devices

Wearables are already being used to assist patients in monitoring their health and filling gaps in existing health data. According to Deloitte, the global market for wearable tech devices in healthcare is expected to grow to 440 million units per year in 2024. 

Chart showing the number of wearable health units shipped globally between 2021 and 2024.

Image source

The beauty of wearable tech is its flexibility. It can be used to track all kinds of health metrics, including blood pressure, heart rate, eye pressure, and blood sugar level. Because the devices are small, they’re convenient to carry around and don’t interfere with day-to-day activities.

Using Wi-Fi and 5G technology, these devices can communicate continuously with clinical systems to share a huge volume of healthcare data personalized to each patient.


When most people hear the word “blockchain,” their association is with cryptocurrencies. After all, that’s where most of us first came across the concept. So, it might surprise you to learn that blockchain technology is also being used in the healthcare industry.

Essentially, blockchain is a kind of distributed ledger technology. It enables data to be stored and shared in a decentralized way. Some healthcare companies, such as MedicalChain and BurstIQ, are beginning to implement blockchain-driven solutions to meet challenges such as Big Data exchange and EHR systems interoperability.

AI (artificial intelligence)

In 2020, researchers at MIT trained an artificial intelligence model on Big Data. The result? They discovered Halicin, a completely new kind of antibiotic that can cure many antibiotic-resistant infections. We really are at the beginning of a whole new era in medicine.

It’s difficult for us to imagine today just how profoundly AI is going to change the healthcare ecosystem over the next few decades. Machine learning algorithms and other cognitive technologies are set to revolutionize not only drug development but the practicalities of patient care delivery.

In the first instance, we’re likely to see the greatest impact in diagnostics and the formulation of effective treatment plans. That’s because AI tools can be trained on large datasets and will be able to conduct high-quality analyses of healthcare data. All of which means more accurate diagnoses and better treatment choices.

VR (virtual reality)

According to Precedence Research, the global market for healthcare-related augmented and virtual reality tools amounted to $2.3 billion in 2021 and is expected to grow to $19.6 billion by the end of the decade.

Bar chart showing the augmented and virtual reality in healthcare market size in USD billion between 2021 and 2030.

Image source

That’s no surprise since the immersive environments offered by virtual reality technology offer opportunities for working in innovative ways. They’re particularly well suited to training and education. 

Surgeons can now be trained to perform complex procedures using VR software, in much the same way pilots learn to handle different aircraft in flight simulators.

VR can also be used to educate patients about their condition and treatment options. Virtual models use hyper-realistic CGI to enable patients to visualize how different treatments could affect their bodies.

Transform healthcare provision and achieve digital innovation

The reality is that digital transformation is the future. Despite the implementation challenges it poses, healthcare organizations that cannot move with the times will be left behind. The benefits of digital innovation to health industry stakeholders of all kinds are now so clear that there’s no alternative.

Moving from legacy systems to business-first digital architecture can seem difficult at first, but fortunately, help is at hand. OpenLegacy recommends a microservice-based API strategy that allows healthcare providers to continue using the critical parts of their legacy architecture while moving toward a fully digital solution.

The benefit of this approach is it minimizes disruption. Microservices are small, self-contained pieces of code that manage specific business functions. Day-to-day operations can continue as before as microservices are gradually added to the mix.

Whichever approach you decide to take, embarking on your organization’s digital transformation journey is the way forward for all healthcare companies hoping to remain competitive in the modern healthcare industry. It really is now or never.

FAQs about digital transformation in healthcare

Why do we need digital transformation in healthcare?

For too long, healthcare has been delivered piecemeal. The typical patient experience has been one of wasting many hours trying to access appropriate care while dealing with health insurance claim delays and other administrative difficulties. In the 21st century, this kind of healthcare customer experience is no longer acceptable.

The benefits of digital innovation and new health technology for healthcare provision are already proving to be enormous. Advanced software such as machine learning and virtual reality tools are opening up whole new ways of working for clinical staff, and improvements in communication are assisting in the delivery of more streamlined and reliable services.

How will digital transformation impact the delivery of health and care?

For patients, the new era of on-demand healthcare will put them firmly in charge of their health choices. From being able to connect with physicians not only face-to-face but on other platforms, such as video calls, to monitoring their health conditions continuously using wearable tech, patients will find they have complete control over their healthcare decisions.

What’s more, digital transformation in healthcare will enable better and faster communication between and across healthcare teams, which will vastly reduce inefficiencies in the delivery of patient care. The digital healthcare industry of the future will be able to offer faster, better, and more appropriate care, leading to hugely improved patient health outcomes.

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