The Healthcare CIO of 2025

EXECUTIVE INSIGHTS: HEALTHCARE

Nine in ten healthcare chief information officers (CIOs) expect revenue-generating responsibilities to be part of their jobs by next year, according to a new global Forbes Insight study.

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Table of ContentsDeployment of Emerging Technologies Drives Cultural Shifts 4

Expecting Greater Strategic Accountability 5

Accelerating Innovation with Emerging Technology 6

Overcoming Challenges 7

Converting IT from Cost Center to Profit Center 8

Maintaining the Role of Cyber-Dragon Slayer 9

Acting as a Moral Compass for the Enterprise 9

The Healthcare CIO of 2025 10

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Within 5 years, healthcare CIOs will turn to emerging technologies such as artificial intelligence and machine learning (AI and ML), Internet of Things (IoT), and blockchain to drive revenue for their organizations.

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Deployment of Emerging Technologies Drives Cultural ShiftsThe healthcare industry is reinventing itself at a breakneck speed. Increasing regulatory mandates and pressure to move to a consumer-like, patient-centered model of care are among the fast-moving market forces causing healthcare CIOs to accelerate their digital transformation initiatives.

Already navigating change—87 percent of recently surveyed healthcare CIOs see themselves as the primary leaders of change management within their organizations—the healthcare CIOs of today can expect to grow into roles where they have even more responsibility. And they are preparing. Nine out of ten healthcare CIO respondents expect to have revenue generation built into their job descriptions a year from now.

To stay ahead, healthcare CIOs must continue to aggressively adopt emerging technologies such as artificial intelligence (AI), machine learning (ML), and Internet of Things (IoT), as well as prepare to guide their organizations through enormous cultural shifts arising from deploying nascent technology.

At the same time, healthcare CIOs must undergo personal transformations into leaders aligned with business stakeholders and boards of directors, capable of steering their organizations through uncertain economic and technological waters. One telling fact demonstrating that healthcare CIOs are ready to embrace the opportunity: More than half of healthcare CIOs surveyed expect to be CEOs by 2025.

These are some of the critical results of a global Forbes Insight survey of 75 CIOs from healthcare organizations with revenues of $1 billion or more. The research was done in partnership with VMware.

This brief explores

87 percent of recently surveyed healthcare CIOs see themselves as the primary leaders of change management within their organizations.

The expectations of and realities facing

healthcare CIOs, as well as key opportunities

and obstacles.

How CIOs see themselves personally, and how they feel about the technology

and social order.

Ways CIOs can meet the challenges and seize the opportunities to achieve

both professional and personal success.

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Expecting Greater Strategic Accountability Healthcare CIOs already enjoy considerable responsibility and power. A significant majority (83 percent) surveyed say they are the primary drivers of corporate innovation. Interestingly, 86 percent also report they are the primary decision makers on corporate acquisitions, highly significant in the heavy U.S. merger and acquisition (M&A) environment of today’s healthcare industry.

Yet healthcare CIOs expect their authority to increase even more. Nearly two-thirds (64 percent) believe they will be on their organizations’ boards of directors within 5 years, compared to 59 percent of CIOs from other industries. This makes sense in an industry where CIOs are expected to drive innovation through software.

CIOs in healthcare will be responsible for delivering new clinical and patient care services, mobile applications, and other digital solutions. Many will drive new revenue streams that take advantage of trends such as telemedicine, proactive health and wellness, and the need to serve aging populations. Indeed, 64 percent of healthcare CIOs surveyed believe that technology will drive “large” or “very large” changes in product development within their organizations.

Big data and advanced analytics are already impacting everything from diagnosing diseases to finding cures to personalizing medicine. CIOs will have increasing influence in these areas as well. And when it comes to sales and marketing, where data is now king, more than half of healthcare CIOs say they will have stronger relationships with the executives leading those functions (53 percent and 52 percent, respectively).

Compliance is already an area healthcare CIOs monitor closely. In more than any other industry, the privacy of customers—patients—is paramount. With established U.S. mandates such as HIPAA and the passage of stricter regulations such as the European Union’s GDPR, healthcare organizations must be even more vigilant about patient data protection and privacy. Not surprisingly, more than six in ten (65 percent) healthcare CIOs surveyed expect to be even more deeply involved in and responsible for their organizations’ compliance efforts over the next 5 years.

Healthcare CIOs who say they are the primary drivers of corporate innovation.

83%

79% “Seventy percent of the world’s consumers want to take more control of their health, and technology can put that power in their hands. A company’s board needs the expertise of the CIO to unleash this potential to serve consumers and drive business growth.”

SHIVANI SAINI, CIO OF ASIA-PACIFIC HEALTHCARE FOR GLAXOSMITHKLINE

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Accelerating Innovation with Emerging Technology Technology is transforming virtually all aspects of healthcare—from clinical diagnostics and treatment delivery to back-office operations to patient-facing processes. Because outcome speed matters, current CIOs are accelerating investments in leading-edge technologies such as AI, ML, and IoT (or more specifically in healthcare, the Internet of Medical Things [IoMT]).

For healthcare CIOs, the top emerging tech priority for development today is machine learning—hardly surprising, given the hundreds of gigabytes of data healthcare organizations generate, collect, and store daily. ML algorithms combined with advanced analytics can take clinical data, identify patterns invisible to the human eye, and come up with early diagnoses of serious diseases, catching them soon enough for effective treatment. ML initiatives can delve into healthcare operational data and find more efficient ways of performing routine tasks, saving money and time while improving care quality and delivery—all goals for most healthcare organizations.

The second most critical emerging technology according to healthcare CIO respondents is IoT. This refers to the proliferating number of medical devices: wearables and portables, as well as those inserted surgically into patients, plus the increasing number of sensors positioned throughout health facilities to monitor care environments. With IoT feeding information back to technicians and scientists who can use the data to provide more effective—even preventive—care, healthcare CIOs can help move medicine from a reactive to a proactive discipline.

Looking ahead to 2025, AI ties for first place in importance, with 63 percent of healthcare CIOs surveyed expecting it to be either “very important” or “critical” to their businesses within 5 years. Healthcare CIOs thus know that although AI is a fairly new development only now being put into production, it will mature fast enough to dramatically impact healthcare operations in the near future.

Blockchain equaled AI as the technology cited to be most critical by 2025, with 63 percent of CIOs expecting it to dominate their operations by then. Because blockchain at its core is a distributed system capable of recording and storing transaction data, this technology has the potential to transform healthcare by ensuring the security, privacy, and interoperability of health information. This is especially critical when considering the increasing importance of patients’ electronic health records (EHRs) as the healthcare ecosystem continues its digital transformation.

The high priority of blockchain correlates to the immense amount of data healthcare is accumulating and the need to keep it secure and private. Of all industries interested in this technology, the priority placed on blockchain by healthcare CIOs was significantly more than any other. On average, only 54 percent of companies in other industries felt it would be a critical technology by 2025.

Today, ML and IoT are the top technical priorities for healthcare CIOs. By 2025, AI and blockchain will have replaced them as the most urgent priorities.

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Overcoming Challenges Successfully implementing any innovative technology requires the right combination of people, process, and technology. The chief obstacle will be finding people with sufficient expertise and hands-on knowledge. One-third (33 percent) of healthcare CIOs surveyed expect that AI will be the most challenging of all technologies to implement for this reason. One in four believe AI is “overhyped.”

Healthcare CIOs will find they have to grow their own expertise, hire third parties to aid them in their innovation efforts, or both, to manage leading-edge deployments. At the same time, they will need to champion the cultural shift to come.

AI, ML, IoT, and other technologies are poised to significantly change the way clinicians work and interact—with each other and with patients. Some old and new jobs will involve interacting more with intelligent systems to complete complex tasks. This will require training, collaboration, handholding—and patience.

The CIO 2025 survey showed that among healthcare organizations, CIOs believe that gaining employee buy-in and collaboration is the single most important aspect of managing a successful technology implementation. Aligning employees to the new mission of IT is followed closely by keeping the company moving toward a strategic vision.

Success in this area will be achieved by engaging with knowledgeable and trustworthy partners. Currently, no off-the-shelf AI, ML, or blockchain applications exist. Each system must be custom built to meet the specific needs of a particular healthcare organization. Vendors that offer quality solutions and possess deep technical expertise can be the answer.

By working and collaborating with trusted vendors, healthcare organizations can explore the potential—and limitations—of leading-edge innovations, and come out the other side of digital transformation with high-ROI solutions. More than one-third of healthcare CIOs surveyed believe that working closely with vendors (39 percent) and using partners’ professional services (33 percent) were the biggest determinants of a technology project’s success.

AI will be the most challenging technology to implement, say one-third of healthcare CIOs.

One-third of healthcare CIOs believe that strong vendor relationships and using partners’ professional services are the most important drivers of technological success.

89%

34%

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Converting IT from Cost Center to Profit Center Cost savings has long been the number-one driver of IT innovation. But that’s changing. Today’s CIOs are focusing more on revenue-generating opportunities, as technology is increasingly viewed as a key driver of business growth rather than just a way to squeeze inefficiencies out of operations.

A shining example in healthcare is telemedicine, the practice of caring for patients remotely. It can include everything from a routine videoconferencing check-in between a doctor and patient to discuss a fever or a rash, to complex surgeries done remotely because a specialist can’t be physically present. These services all lead to new sources of revenue.

When asked how technology could contribute to healthcare organizations’ top-line financial results, CIO respondents said that managing third-party sales of internally generated apps would be an important source of new revenue, followed closely by providing IT services to third parties. In short, CIOs surveyed expect the technical expertise they develop internally will be useful on the market to other healthcare companies going through their own digital transformations.

Not surprisingly, healthcare CIOs are less enthusiastic about selling data to third parties as a means of generating revenue compared to CIOs from other industries. This is likely because of strict privacy concerns and regulations.

Within 1 year, 90 percent of healthcare CIOs surveyed expect to have revenue-generating responsibilities in addition to their traditional IT responsibilities.

90%

34%

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Maintaining the Role of Cyber-Dragon Slayer Defending organizations against hackers and cybercriminals is a never-ending job. CIOs across all industries continue to invest millions in cyber defenses, but ongoing losses from leaks and breaches far outpace spend. Most healthcare CIOs surveyed say they can’t keep up. Radical changes in tactics and tools are needed.

Nearly nine in ten healthcare CIOs (87 percent) believe the Internet requires a cybersecurity overhaul—more than any other industry CIOs. And more than one in three (35 percent) healthcare CIOs believe that cybercrime has the capability to actually shut down the Internet.

Although this sounds ominous, technology can also be used for good. Healthcare CIOs can help secure the privacy and security of sensitive systems and data by deploying modern strategies such as intrinsic security.

Acting as a Moral Compass for the Enterprise Recent disclosures about personal data and information being used improperly across commerce, government, and social realms has the potential to sour consumers on technology.

CIOs are acutely aware of this situation, and feel a social and moral responsibility to respond. Only 15 percent of healthcare CIO respondents view their responsibility as solely supportive of the profitability of their organizations.

Most healthcare CIOs (75 percent) believe they should avoid using technology that does harm. Yet almost as many (73 percent) believe they should do more—that they should harness technology for social good. These numbers exceed the averages from other industries.

Healthcare CIOs are adamant about a number of specific social issues. Among others, they believe CIOs will be pivotal in helping their organizations succeed in navigating socio-economic issues over the next 5 years, including ensuring privacy for individuals (65 percent) and easing the digital divide in young peoples’ educations (74 percent).

Healthcare CIOs exceed the average of other industries’ rankings of social activities in four out of the six categories surveyed.

Nearly nine in ten healthcare CIOs surveyed believe the Internet requires a cybersecurity overhaul.

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The Healthcare CIO of 2025 To become a healthcare CIO of 2025 requires championing change and becoming an increasingly visible leader across the organization. These executives must master the deployment and management of existing and emerging technologies for better patient outcomes, take responsibility for finding new lines of business, and become accountable for generating revenue through them. They also must continue to thwart cyberattackers while protecting the privacy and security of health data and systems—all while helping drive corporate social responsibility.

They will not be alone on this journey. Cooperative caregivers, reliable partners, and expert vendors will help them transform the cost, quality, and delivery of patient care on their digital transformation journeys.