When C-suite leaders are aligned, health systems can improve technology transformation

Key drivers of success in health systems’ tech initiatives

When asked about their health system’s successful technology initiatives, 61% of respondents chose C-suite alignment and collaboration as the top driver, and 80% included it among the top three drivers (figure 1). The C-suite collaboration during the COVID-19 pandemic is a recent example. Before the pandemic, many health systems’ virtual health offerings and the underlying technology infrastructure were at a foundational level. However, the pandemic prompted close collaboration between health systems’ C-suite executives and tech leaders to rapidly enhance their virtual health capabilities. As a result, many health systems quickly developed the capacity to support a significant increase in the use of virtual health services.³

Additionally, 64% of surveyed executives reported that involving end users, including providers, nurses, and administrative staff, in designing the tech initiatives is an important driver of success. A post-pandemic study conducted by Deloitte revealed that challenges with technology adoption can occur when end users are not involved in the design process. While C-suite collaboration was effective during the pandemic, only 38% of frontline clinicians were consulted about integrating digital health into their workflow. This lack of involvement may lead to dissatisfaction and underutilization of digital health tools among clinicians.⁴

The survey indicates that 41% of respondents believe technology transformation is more successful when business functions, rather than IT, lead the initiative. This approach suggests the need for business leaders to work closely with technology leaders in defining, executing, and measuring how technology enables clinical and business operations and strategies. In fact, 68% of respondents said C-suite and IT leaders collaborate as partners across all phases of their health systems’ technology initiatives.

Interestingly, funding of tech initiatives did not feature among the top three drivers, in contrast to the belief that budget, or lack thereof, defines a tech initiative’s impact.⁵

Measuring the effectiveness of C-suite collaboration

What appears to be working well: Greater collaboration in the planning phase

We asked respondents how effectively C-suite leaders in their health systems are collaborating across various stages of technology initiatives. Respondents generally agreed or strongly agreed they are collaborating well in the planning phase. For instance, 91% of respondents reported working together on top opportunities or challenges that technology can solve and 86% said they have a clear allocation of budget and clear roles and sponsorship (figure 2). These findings show progress, especially considering that budget allocations and clear demarcation of roles have been long-standing challenges in technology implementation for health systems.⁶ In fact, a study conducted by the Deloitte Center for Health Solutions and the Scottsdale Institute in 2021 found budget, lack of ownership, and lack of transparency on technology initiatives to be the biggest barriers to digital transformation.⁷

What can be better: Improving financial incentives and measurement

Financial incentives: Organizations can create a direct link between leadership performance and technology initiatives’ outcomes by linking C-suite leaders’ financial incentives with technology milestones.⁸ However, only about one in four respondents reported tying their own financial incentives and bonuses to the value gained from tech initiatives (figure 2). Research on the role leaders play in digital transformation showed that aligning senior executives’ financial incentives with company strategy and technology transformation can help motivate them to deliver superior results.⁹ For example, a regional health system established a long-term incentive plan, making a third of leadership compensation contingent on technology transformation progress. According to the health system’s CEO, this approach ties C-suite accountability and economic rewards to the transformation project’s success.¹⁰

Emerging technologies are becoming increasingly ingrained in business models.¹¹ This prompts health systems to consider reevaluating their executive compensation practices to reward successful technology adoption. Incorporating digital capability objectives into compensation designs also tends to signal to both internal and external stakeholders that technology is a core strategic priority, potentially transforming the role of leadership in driving overall organizational performance.

Broader measures for better accountability: Increasing accountability from functional C-suite leaders, such as chief financial officers, chief strategy officers, chief marketing officers, and chief human resources officers, is another area of opportunity to enhance the impact of technology initiatives. Only about half of the respondents said that non-tech leaders of the C-suite (that is, excluding the chief information and chief technology officers), are accountable for measuring the impact of technology initiatives (figure 2). Accountability can foster greater collaboration not only between IT and functional leaders but also among different functional leaders themselves, helping accelerate overall business goals.

Tying the impact of technology to business key performance indicators (KPIs) can be important for improving accountability. More than 70% of survey respondents reported that technology initiatives help achieve financial and clinical goals such as revenue and margin growth, quality of care, and process of care (figure 3). However, some respondents indicated that the impact of technology on KPIs such as consumer indicators like patient engagement and satisfaction, workforce indicators like productivity, burnout, and administrative indicators like process efficiencies, are either not measured or not meeting goals. When the C-suite defines and aligns on broader organizational goals beyond financial metrics for technology initiatives, it may enhance accountability.

For example, the chief financial officer of a large academic medical center discussed how they collaborate closely with their functional counterparts to extract greater value from their tech transformation initiatives. As stewards of tech investments—from clinical platforms and enterprise resource planning tools to workforce scheduling technologies—they work with functional leaders to define the value created by these technologies. In areas where finance has subject knowledge and experience, such as revenue cycle, procurement, and business insights, they own and are accountable for measuring the impact of technology investments. In other areas, they serve as advisors to create metrics of measurement.¹²

The survey findings are consistent with what Deloitte uncovered in a 2024 study on generative AI in health care. The study explored how insufficient attention to consumer and workforce considerations and measures can be a blind spot for health systems. This oversight can hinder the effective implementation of promising technologies and potentially prevent health systems from realizing their full potential.¹³

Broadening KPIs can be important for demonstrating the full value of technology impact beyond just financial and clinical metrics. For example, a regional nonprofit health system launched a digital medicine obstetric program a few years ago to improve pregnancy health outcomes.¹⁴ By using their evolving remote monitoring technologies, the health system provided digital, hospital-at-home services to mothers, helping them manage their pregnancy journey between in-person obstetric visits. While the program showed increased success in health outcomes, with 20% lower odds of delivering preterm as a key KPI, the health system broadened the measures to include:

• Patient satisfaction: Of the program enrollees, about 11% are re-enrollees; and the enrollees feel more connected to their care team.
• Physician experience: Physician capacity increased by about 0.6 full-time equivalents.
• Purpose: Greater reach, with 30% of enrollees from Medicaid program.

Similarly, an independent rural access hospital uses AI-based coding to improve its revenue cycle management.¹⁵ Since adoption, the technology has generated 10 times the return on investment, as measured by its impact on operating profit. The hospital also broadened the metrics of impact to include:

• Fewer discharged-not-final-billed cases: 50% reduction
• Improvement in coder productivity: 40% improvement
• Better case mix index: 4.6% increase

As business leaders tend to increasingly rely on technology to help achieve their functional objectives, it is important to consider structurally tying the impact of technologies to their KPIs. Performance dashboards that integrate multiple performance indicators, including financial, consumer, clinical, operational, marketing, workforce, and others, in one place can help correlate the impact of technology initiatives on these KPIs. This approach can provide C-suite leaders with actionable insights that facilitate strategic alignment, continuous improvement, and proactive decision-making.

Establishing and meeting strategic imperatives

Health systems’ technology needs and opportunities have shifted in recent years and will continue to change with the rapid evolution of emerging technologies.¹⁶ Two in three surveyed executives say they are investing in technologies for their immediate needs (one to three years) with a focus on emerging technologies such as cloud, AI and gen AI, and virtual and augmented reality. To help them achieve greater value from these technologies, organizations should consider developing strategies that involve greater C-suite collaboration. Important enablers include enhancing technology capabilities, focusing on data modernization, ensuring interoperability, strengthening cybersecurity, and implementing workforce transformation initiatives that include change management efforts. Adopting these often-expensive technologies can be a complicated and lengthy process. However, increased C-suite collaboration can drive greater value for the organization, fostering growth and improving margins. As their role continues to evolve, health system CIOs are likely to be well positioned to achieve this value as change agents for the C-suite and the boards.