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Why digital adoption remains low in private health providers

The report, Pathways to Scale Adoption of Digital Health in India, which was produced in association with consulting firm Arthur D Little, is based on a survey on 30 private healthcare providers. The report said that 93 per cent of the respondents agreed that digitalisation is beneficial for the healthcare ecosystem and 80 per cent recorded using digital tools for the most common use case, i.e., to register customer data (demographic and clinical).

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

The report, Pathways to Scale Adoption of Digital Health in India, which was produced in association with consulting firm Arthur D Little, is based on a survey on 30 private healthcare providers. The report said that 93 per cent of the respondents agreed that digitalisation is beneficial for the healthcare ecosystem and 80 per cent recorded using digital tools for the most common use case, i.e., to register customer data (demographic and clinical).

However, only 7 per cent of the providers have adopted digitalisation across all operational use cases.

As a large and growing healthcare market with a sizeable 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 the benefits of ABDM integration is a major deterrent across the board. “Larger players are nervous about the implications of sharing internal digital systems and data, including the possibility of security breaches of confidential customer data,” the report noted.

“The resistance from smaller players originates in their outlook towards digitalisation as an additional cost rather than a worthy investment. Some smaller players are reluctant towards investing in digitalisation to avoid regulatory scrutiny,” said Barnik Chitran Maitra, Managing Partner, Arthur D. Little India & South Asia.

Taking account of the benefits cloud adoption can provide, the report said that broadly, 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. Benefits for players range from capturing cost efficiencies in procurement, clinical operations, reducing revenue leakages in pricing or discounting and increasing revenue realization by bundling more value-added services e.g., wellness programs to the overall offerings, the report said. It further said that providers using ABDM-compliant systems from the outset of digitalisation can capture more than 80% of the benefits of digitalisation with a 60 per cent reduction in Capex as compared to on-premise systems.

At least 40 per cent of the respondents in ADL’s provider-side survey, the report said, believed that high financial cost is the key barrier to digital health adoption. Small players are also resistant to digitalise despite having the resources to do so. For instance, 80 per cent of the surveyed providers reported that they had enough financial capabilities to expand digitalization efforts but only 53 per cent are planning to or have already digitalised end-to-end. “This resistance stems from efforts to avoid regulatory scrutiny resulting from increased transparency brought about by digitalisation,” the report said. Business Today

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