Hakkoda’s Healthcare State of Data report shows us an industry on the brink of major technological disruption as 51% of data leaders in the space report that they would need to modernize their data stack “a great deal” in 2024.
Migrating to a secure and interoperable centralized cloud platform like Snowflake, tapping the revenue potential of monetization, and developing greater internal data literacy are all crucial steps to data modernization for healthcare organizations, but most orgs face an uphill battle as worries about operating budgets, staffing woes, and growing cyber security risks introduce major obstacles into their modernization pipeline. These organizations need to make the most of their already-limited resources in order to protect their bottom line, but without external data support, they’ll risk falling behind their competitors, or worse—falling prey to their own razor-thin margins.
In this blog, we will walk through three of the biggest takeaways from the Healthcare State of Data, which illuminate the top challenges healthcare organizations will face and shed light on some of the ways that innovators in the space can still come out ahead.
1. Low data literacy rates, staffing difficulties, and system consolidations are major challenges, even as data modernization is becoming more and more urgent.
Even as nursing staffing has begun to rebound post-pandemic, healthcare organizations continue to struggle to remain adequately staffed. Meanwhile, many orgs are weathering consolidations and mergers that will significantly change their existing data stacks, all while contending with the rise in malicious data breaches, such as the ongoing ransomware attack against Change Healthcare, which according to a recent report in Becker’s Hospital Review has many organizations considering a significant increase in cyber security spending.
In the midst of these difficulties, it’s no surprise that creating a data-driven culture is reportedly a major challenge for 46% of healthcare organizations (a figure that led all industries surveyed). Just 28% of healthcare leaders reportedly believe their org maintains a high level of data literacy. Yet 51% of healthcare orgs reported that their data stack will need to be modernized “a great deal” in 2024—a goal that will be all but impossible without the data literacy and data-driven culture that healthcare orgs reportedly lack.
These organizations know that their data stacks are outdated and inefficient, but they lack the internal expertise and resources needed to effectively modernize while reckoning with significant, industry-wide challenges like staffing shortages, merger and consolidation transitions. Consequently, their bottom line suffers, not just from money left on the table by ineffective data systems and practices, but also from costly cyber attacks that threaten their reputation, financial outlook, and legal standing. This trend has many organizations looking to external support to help bridge the data talent gap and keep internal resources focused on the operational goals they are most suited to address—providing high-level care to patients.
When it’s being used right, a modernized data stack will not only help healthcare org’s bottom line as they contend with challenges like staffing shortages—it will help address them, setting up long-term sustainability and efficiency that healthcare organizations desperately need. For more information, check out how Snowflake and Hakkoda have worked together to create a solution for nursing attrition, using predictive models that make real-time decisions to minimize burnout among nursing staffs.
2. 2024 will be a big year for healthcare data modernization, helping organizations who get the help they need address urgent industry-wide concerns while shoring up their bottom line.
The majority of healthcare orgs are looking to modernize their data stack this year—a process that will allow them to tap into the revenue benefits of data monetization, as well as the efficiency and security that comes with a centralized data cloud platform.
Just 24% of healthcare orgs are reportedly monetizing their data currently, but 40% of orgs intend to join them in 2024. Similarly, only 23% of orgs reported that they currently used a centralized data cloud platform, but 74% reported that they intend to transition to one in the next two years, signaling that industry leaders know the need to make the jump is urgent.
These organizations know that in 2024 a modernized data stack will be necessary to navigate thin margins, staffing shortages, data talent gaps, and cyber security risks. But with their staff and infrastructure already stretched thin, it’s no surprise that only 1% of organizations felt they had the internal resources to modernize their data stack this year. That’s why, of the remaining organizations, 84% reported that they will need a moderate to large amount of external data support in 2024.
The urgency of modernization and the limited internal resources that healthcare organizations face this year are simply too great to overcome without outside data support; meanwhile, innovative healthcare orgs are already depending on external support and seeing high ROIs on their data investments, leveraging their data revenue to weather their industry’s brutal margins.
3. At a time when margins remain too thin for comfort for most orgs, data investments are delivering high ROIs, and there is still untapped revenue potential to be harnessed.
According to the same Becker’s Hospital Review’s recent report on emerging healthcare trends, 40% of American hospitals continue to operate on negative margins, with even large orgs like the Cleveland Clinic and the Kaiser Permanente operating on a margin of less than half a percent. The result for many orgs has been closure, bankruptcy, or reducing services in order to cut costs.
Just 11.3% of healthcare organizations surveyed in Hakkoda’s Healthcare State of Data reportedly exceeded their financial goals in 2023—a figure that’s hardly a surprise in an industry where revenue so consistently struggles to keep up with operational costs. And yet, despite their outdated and inefficient data stacks, healthcare organizations reported an ROI of 124% on their data tech investments in 2023—a number that jumped to 164% among Innovation organizations who follow best tech practices across industries. This confirms that data is not just a viable avenue for revenue for healthcare organizations in the current climate: it’s a crucial piece of the financial puzzle for healthcare organizations that truly rewards investment.
Given the low-level of data literacy and the outmoded data systems and practices being used by the organizations, it’s safe to say that by enlisting external support to bridge those gaps, healthcare organizations stand to see even greater returns on their data investments in 2024. The key will be to keep internal resources dedicated to operations while letting outside data experts assist orgs in creating sustainable—and profitable—data stacks that deliver precious revenue in an industry that’s starved for it.
Charting Your Data Innovation Journey with Hakkōda
Hakkoda’s Healthcare State of Data report offers an invaluable glimpse into what data innovation should look like for healthcare organizations in 2024 and beyond.
Industry leaders know data modernization is an urgent need, not just for long-term success but short-term profitability, and innovative healthcare organizations will be making that leap by centralizing their cloud storage, monetizing their data, and bolstering their internal data literacy, tapping into proven ROI potential with the help of external data support.
Ready to begin your Data Innovation Journey, but don’t know where to start? Hakkoda is here to help with cloud data and Gen AI consulting services. With teams that bring rich industry experience and expertise across the modern data stack, we help our customers streamline data transformations and future-proof their data strategies.
It’s time to join the ranks of healthcare data innovators. See what else the Healthcare State of Data report reveals by reading the full report here.
