It is the responsibility of Chief Digital Officers to lead healthcare’s digital transformation. They must align the C-Suite, frontline staff, and the ecosystem of technology suppliers so that there is mutual benefit as they collectively march towards the health system’s digital goals. According to Raj Aggarwal, Chief Growth and Strategy Officer at Panda Health, this makes them as important as the CEO.
Role of a Chief Digital Officer?
Healthcare IT Today recently had the opportunity to sit down with Aggarwal to discuss the role of Chief Digital Officers in health systems, the concept of digital transformation, and why both are so critical for healthcare at the moment.
When asked “What does a Chief Digital Officer (CDO) do?”, Aggarwal responded with: “It’s someone who can understand the clinical enterprise – the service lines of the organization – and be able to align the business model of technology companies with the business model of healthcare systems to create a win-win.”
Clinical or Frontline Experience
Aggarwal believes very strongly that a CDO must have a clinical background or have spent years working on the on the frontlines. Why? Because that is the best way to gain empathy for the patients and staff that need the technologies that enable digital transformation. It is also the best way to gain insights into the day-to-day operational and clinical challenges faced by the frontline.
“To be successful in healthcare,” explained Aggarwal. “You have to really have to understand healthcare.”
To put this another way, you can’t just drop in a technology executive into healthcare and expect a good outcome.
As important as the CEO
Healthcare is in need of a technology overhaul. The pandemic has highlighted the shortcomings of years of insufficient investment in critical technology infrastructure and digitization of clinical processes.
“We spent a lot of time, energy and money implementing electronic medical records,” said Aggarwal. “And then we said ‘job done’.” However, that was just the beginning of the digital transformation, not the end of it.
Now, we need to leverage the investment in EHRs by layering on advanced technologies that will improve the patient experience, the clinical workflows, and the overall health of the industry. Leading charge will be Chief Digital Officers.
From this perspective, Aggarwal sees the CDO as someone who is just as important to a health system as the CEO: “I would even go further to say that maybe Chief Digital Officer is even more important than the CEO to the healthcare system. We really need to transform and improve our healthcare system. We need to move from the brick and mortar and end-to-end care that has gotten us here. We know that won’t get us to where we want to go. The Chief Digital Officer in my mind, is really a strategy job AND an operations job. They have to lay out the transformation strategy with the CEO and then work to execute on that.”
Watch the full interview with Aggarwal to learn:
- Why understanding the incentives for digital health companies is important
- Why healthcare is like “Undercover Boss” every day
- How digital incrementalism is insufficient
- If hiring a Chief Digital Officer in healthcare is a good idea
Panda Health is a supporter of Healthcare IT Today. To learn more about them, visit https://panda.health/
Panda Health will be at ViVE 2022, visit them at booth 620.
TRANSCRIPT
0:00 Colin Hung – Introduction
Today we’re going to examine the question: Is hiring a Chief Digital Officer the right move for hospitals? Sitting down with me today is Rajesh (Raj) Aggarwal, the Chief Growth & Strategy Officer at Panda Health.
Raj is a clinical surgeon, a PhD scientist, and a health system executive with extensive experience in the UK, US and Canada. Most recently he led innovation and strategic ventures at Jefferson Health System.
Raj, welcome to the program.
0:51 Raj Aggarwal
It’s great to be here. Thank you for the time and thank you for the kind introduction. I think this topic is not an easy one which is what I love. I enjoy doing hard things because they are hard. So let’s get on with it.
1:08 Colin Hung
Before we dive into that question, can you give me your definition of what a Chief Digital Officer does in healthcare? What should that person be doing?
1:17 Raj Aggarwal – What is a Chief Digital Officer in Healthcare?
The short answer is I don’t know…but that’s not a good way to engage your audience.
My career has always been centered around healthcare innovation and healthcare technology. I did my PhD in virtual reality and robotic technologies twenty years ago. Really it was around the clinical validation of those technologies. Then I realized that those clinical validations end up in a scientific paper. If you then want to drive that into the clinical area of a health system, there needs to be a commercial model – a business model. There needs to be a derivation of outcomes beyond 100 patients or 200 patients. Not only does there need to be that liaison with the commercial entity, but there also needs to be buy-in from the leadership team as well as the front line.
That is what I think the role of a Chief Digital Officer needs to be.
Firstly, it should be someone who understands the clinical enterprise: “This is how the surgical service line or health service line works.” They don’t necessarily have to be a clinician, but I feel strongly that they need to have a clinical background. They don’t have to be a doctor, they can be a nurse, a physiotherapist, a social worker. They just have to understand, end-to-end, how healthcare works.
Number two, [a Chief Digital Officer] needs to understand the value of the technology. When a company comes to you and says: “I have this technology that does this, this, and this”, they need to be able to appraise the evidence. The reason why is because that’s exactly what clinicians are going to do. If you can get ahead of that as a Chief Digital Officer, that’s really important. They need to be able to say: “This doesn’t work because of this or this does work and let’s engage.” There is a lot of credibility at stake here.
[The Chief Digital Officer needs to] know how to align the business model of the company with the business model of the healthcare system. “We’ll pay you this, because we’ll get this value in return.” And what does that look like in a 3 or 5 year period.
I always say that it’s really really hard to do business with a healthcare system, but once you are in, they will never throw you out.
Most healthcare systems don’t do 1 year deals. Every 3 or 5 years, on renewal, the terms of the deal can change, so understanding that is important for a Chief Digital Officer.
A lot of the companies in the digital health space are venture backed early-stage companies. So understanding their incentives [is important]. Not only do they want to do a deal with your health system, they want your help to do a deal with other health systems. So how do we align those incentives.
The final piece [of the job for a Chief Digital Officer] is to have the executive presence, executive leadership, empathy, and engagement with other leaders of the health system as well as front line staff. They also need to have this same presence with the companies that they are working with.
When I was Jefferson, I would say that my job was to work for the leadership of the company and the leadership of my healthcare system. It’s almost as if I have two people to report to: the CEO of the company and the CEO of the health system…and if both of them are happy, I’m doing a good job. That means, coaching, translation of what needs to happen in order for value to be created in that partnership.
Those are the handful of attributes and qualities that are really important [for a Chief Digital Officer].
6:10 Colin Hung– Chief Digital Officer and Healthcare Complexity
To me it is clear you are in favor of having someone in that role who has a clinical background. You’re saying it doesn’t have to be a doctor, but certainly someone who is familiar with various service lines…and knowing what is going on in those clinical processes rather than treating it as a black box.
6:40 Raj Aggarwal
I think this goes to the complexity of healthcare.
I grew up in the UK. I did all my training in the UK. I worked here in the US. I worked in Canada as well, not quite in your part of the world, but in Montreal, Quebec. Three very different healthcare systems.
When you think about the Chief Digital Officer in other verticals, like consumer verticals. There are a lot leaders of startups in other verticals, whether it’s travel or shopping that are a lot younger than the leaders in startup health tech companies. It’s not that I espouse them to be younger or older, but to really be successful in healthcare you need to understand healthcare. That means spending a good amount of time working in healthcare.
I am certainly on the side of the fence where being a clinician, being on the frontline is important. When I was at Jefferson, I was still seeing patients. I was still operating. It gave me so much insight into the day-to-day. I was using Epic everyday. I was seeing the challenges day-to-day.
One of my colleagues David Ashe at Penn used to always say: “Healthcare is unique. You have leadership in the C-Suite that is also working on the frontline.” In any other industry, that doesn’t happen. You don’t have the CEO of Walgreens or Walmart, regularly doing shifts on the shop for. That’s unusual except in the healthcare industry.
So if you are not able to do that, then you are missing out in terms of the knowledge gathering, and the listening that needs to happen. It’s that perspective that you need rather than having gone to medical school for four years and then residency for four years. It’s about being on those frontlines.
You should have been on those frontlines for many, many years and should continue to be on the frontline to really think through how best to serve the needs of the healthcare system.
If I may, let me just add something.
Those clinicians on the frontline are very powerful. If they don’t want something to work, they are powerful enough to say “I’m not going to use this”. Whereas you look at a company like Walmart, they will be told to “use this” [and they have to ]. In healthcare we still have a fair amount of autonomy in how our providers deliver care.
9:50 Colin Hung – Empathy and Understanding
There is a certain empathy and understanding that is needed. At the very least if you had the knowledge of healthcare, you would be able to hit the ground running rather than having to learn healthcare. We have all gone through that [steep] learning curve.
For some it is four or five years. For someone like me that came into this industry from the outside, it’s even longer to learn all the nuances and acronyms that we use in healthcare.
10:19 Raj Aggarwal
I’ve actually spoken about this and given talks on this: healthcare can learn from other industries. How can healthcare learn from Amazon in terms of being better at supply chain. How can healthcare learn from American Express on how it monitors data to say ‘this is a fraudulent transaction’ and apply that to medication errors. How we can use supply chain technologies like what Amazon uses to make sure we never have a transfusion error – the blood bank never gets the wrong person.
I do think we need the help of other industries, to improve healthcare. Having experience, or maybe exposure is a better word, to other industries, is absolutely relevant here. I don’t want Chief Digital Officers to be in silos saying: ‘All I know is healthcare. All I’ve ever worked in is healthcare systems.’
My last boss at Jefferson, Stephen Klasko, spent six months working at Apple. So he really tried to understand how Apple when from being a hardware business to a software business. It’s those kinds of [experiences] that are helpful.
In my career I’ve had the opportunity to be exposed to the big tech players, the arts and how we can learn from them to improve the quality of healthcare.
So I want to make sure I make that point: it’s not all inward looking. We need to look outward as well. And to bring that ‘outside-in’ we need to understand the healthcare system.
12:27 Colin Hung
You mentioned this right at the top. You used a phrase we have heard a lot: digital transformation. You said that is a key component of what a Chief Digital Officer should do. Why is that so important for healthcare in this moment?
12:48 Raj Aggarwal – Digital Incrementalism
The simple answer is: COVID happened, but this has been going on for more than a decade.
With the release of the iPhone. With broadband technologies. All of that has really been transforming healthcare. The problem is, this transformation has and continues to happen at incremental levels. We still believe that our healthcare systems are brick and mortar and can do everything they need to do. They believe they can do primary care, they believe they can give you flu shots, they believe they can do all the post-acute, they can do all the back-end revenue cycle…all that stuff.
We’ve also spent a lot of time, energy, and money putting in electronic medical records. I do not want to go back to write paper notes and having to read them. That is just the base layer. If you think of a software stack diagram, that’s just data layer.
Let’s be blunt about it. A lot of us in healthcare think ‘that’s it’. Job done.
But over the last few years there has been this emergence of digital health companies that all sit on top of the EMR. At Jefferson we would have hundreds of digital health companies come to us each year saying ‘we can do this for you or that for you’. Engaging with them has lead to many, many point solutions and they are not stitched together.
It goes back to something I said earlier. We run healthcare from a clinical pathways perspective or a service line perspective. If all those things are not connected, and now someone is getting their primary care over here, their post acute care over there, and they are going to an ambulatory surgery center to have their gall bladder removed, it’s not delivering the patient experience in the way they want.
That to me is not digital transformation. That’s digital incrementalism.
How we need to put this together is really the job of the Chief Digital Officer.
The Chief Information Officer is the one that ensures that the base layer is put in place and runs day-to-day – everything from cybersecurity, to orders, to HIPAA compliance. I’m not trying to dumb down the role of a CIO, but that is a key piece of what they do and they do it extremely well.
The Chief Digital Officer in my mind, leverages the technology and the digital tools, in a transformation. It is really a strategy job AND an operations job. You’ve got to lay out the [transformation] strategy with the CEO, the rest of the C-Suite, the leaders of the service lines, and the frontline staff. Then you have to work to execute on that.
The way I think this execution happens, in my opinion, is you lay out that strategy for the enterprise – ‘this is how we are going to do it over the next 3 to 5 years’.
Let’s say we have a dozen service lines across the enterprise. We are not going to transform all of them at one time. We’ll start with one or two where the people are more engaged. Let’s learn from them and then let’s work on another two or three after that. That’s where the 3 to 5 year roadmap comes from. That’s how I would think about it in terms of this role.
The other piece of digital transformation is measurement. We need to ensure we are measuring the clinical, operational, and financial metrics of success. We need to report this to the clinical side as well as all of the partners, the digital health companies.
Again because a lot of these companies are venture backed, if we can prove that XYZ health system that brought these digital health companies in, this is how they work, this is where it work in the service lines, these are the metrics of success…then guess what? Every other health system across town, across the region, across the country will ask ‘Can we have that? We want that too.’
That is the responsibility of the Chief Digital Officer. Along with the C-Suite they need to say: ‘If this works we need to be able to scale this to other health systems’. And if it doesn’t work, then we need to kill this because the worst thing that can happen is that it bumbles along and isn’t fit for purpose. That’s where the executive leadership qualities of the Chief Digital Officer come in.
19:06 Colin Hung – Hire a Chief Digital Officer?
So let’s answer the title question. Is it a good idea for healthcare systems to bring on a Chief Digital Officer?
19:18 Raj Aggarwal
I know that’s a loaded question. The loaded part of that question is that you can’t think of a Chief Digital Officer in the same way you think of a Chief Financial Officer or a Chief Legal Officer. A CFO does the books. Chief Legal Officer manages the contracts and makes sure the system is on the right side of the law. The Chief Digital Officer, does all the digital technology – NO!
This is a strategy and operational role across the enterprise. I believe firmly that this role needs to be in partnership with the CEO and the other leaders of the organization because if they are not, then not only will that individual not be successful, but that entire organization won’t be successful.
I would even go further to say that maybe Chief Digital Officer is as important or even more important than the CEO to the healthcare system. We really need to transform and improve our healthcare system. We need to move from the brick and mortar and end-to-end care that has gotten us here. We know that won’t get us to where we want to go.
Providers are fed up. Patients are telling us that they won’t put up with this anymore. Rather than look down, we need to look up and say to ourselves: ‘this is something we need to do’.
Here’s a better way to put it, every CEO of every health system in this country needs to think of themselves as the Chief Digital Officer, and look at the qualities they have – then need to look at the team they can hire around them to be their thought-leader, operationalizer, in order to get the job done.
21:17 Colin Hung – Panda Health
Before we go, what does Panda Health do and how does the company help with this digital transformation?
21:24 Raj Aggarwal
I joined Panda Health right after I left Jefferson. It was a company of five people with a few million dollars in seed funding. I remember people were congratulating me and me telling them not to do that yet. Now just sixteen months later, we are a company of almost thirty people.
What we offer is a digital health marketplace. There are health systems on one side that want support, advice and guidance on digital transformation. [On the other side] are best-in-class suppliers of digital health solutions.
If every health system said: ‘we want to go buy a patient scheduling solution or a revenue cycle management solution or a wayfinding solution’, they would be starting from scratch. Panda works with health systems to source, evaluate, contract, and manage digital health solutions. That’s the four functions that we undertake.
We enable health systems to do that with safety and at speed.
When a healthcare organization comes to us and wants to engage with a digital health solution, we can get it up and running in 3 months. We want to get that down to 3 weeks with pre-negotiated contracts, [a completed] RFI, the tech evaluation, the security checks.
From a supplier perspective, why would they want to start from scratch every time they land a new prospect. It cuts a lot of the friction with this approach.
23:26 Colin Hung
Where can people go to find out more information about Panda Health?
23:41 Raj Aggarwal
The best place would be the website: www.Panda.health.
We’ll also be at the upcoming ViVE 2022 conference in Miami so you can connect with us there as well.
And feel free to reach out to me directly as well.
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