Bad Medicine: Healthcare Struggles With Poor Technology

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By Eric Wicklund

Healthcare organizations are losing $8 billion a year to ineffective and outdated IT, and few have the money to improve that technology.

That’s the key takeaway from a new survey of more than 900 healthcare professionals by Black Book Research. The study, the third in Black Book’s “What’s Hot and What’s Not in Healthcare IT Investments” series, finds that bad IT investments have jumped significantly since 2017, when those costs were estimated at $1.7 billion, and budget limitations are keeping healthcare leaders from correcting those problems.

“Three-quarters of IT leaders surveyed indicated that they have no plans to allocate funds for replacing these flawed systems in 2025, reflecting a broader trend of financial constraints across the sector,” Black Book President Doug Brown said in a press release.

“CIOs are understandably cautious about replacing underperforming systems when the ROI is uncertain, given the track record of many healthcare IT vendors failing to meet expectations. Without clear evidence that a new investment will deliver tangible financial or operational improvements, justifying the expense becomes challenging.”

The findings will disappoint healthcare leaders who are counting on their IT platforms—especially their EHRs—to support innovations like AI and virtual care. An ineffective tech platform not only cuts into the ROI of a new program, but adds to the stress and frustration that haunt nearly every health system and hospital and cause burnout and workforce shortages.

Black Book’s study lists eight IT adventures that have plagued healthcare leaders the most:

  • Overly complex or unintuitive EHRs. Either a scapegoat or a savior for healthcare organizations collecting and managing their data, EHRs haven’t yet fulfilled their promise. According to Black Book, more than three-quarters of those surveyed are still having issues, often with navigation or workflow design, leading to “click fatigue.” In addition, at a time when many smaller health systems and hospitals are being acquired by larger, more stable networks, 91% of small medical practices in the survey say the haven’t been able to transition smoothly to the larger system’s EHR.
  • Bad telehealth. Virtual care saw a surge in popularity during the pandemic, but in many cases those platforms were adopted quickly and without due diligence. As a result, more than 80% of survey respondents said those telehealth tools are not synching with their EHRs, creating dreaded data silos and duplicate information, and impeding workflows.
  • Clunky RCM systems. Healthcare organizations have for years tried to automate their revenue cycle management operations to improve efficiency, capture lost reimbursements and reduce manual administrative tasks. Unfortunately, the technology has met expectations. Some 70% of executives surveyed said their RCM tech is either outdated or unable to integrate new tools like AI, leading to longer claims processing times and higher denial rates. Also, just more than 60% said poor claims scrubbing and denial management capabilities are resulting in lost revenue.
  • Uncooperative HIEs. Health information exchanges offer the potential to connect health systems and enable data sharing. But 28% of medical practices said their EHRs aren’t synching well with the HIE, and 23% cite a lack of data standardization and integration.
  • Poorly integrated CDS tools. Providers often rely on clinical decision support tech to improve their decision-making and boost clinical outcomes. But according to the survey, 80% say their CDS tools don’t integrate with the EHR, and first-generation tools often generate excessive or unnecessary alerts, leading to “alarm fatigue.”
  • Lack of patient engagement support. Patient engagement technology, including portals and messaging platforms, are designed to improve the patient-provider relationship. But 77% of hospital executives surveyed said their portals aren’t meeting the needs of their patients, resulting in ineffective communication and engagement. And 88% of those surveyed said smaller, niche products don’t have the integration or mobile-friendly capabilities they need.
  • Hyped-up AI. AI might be able to address many of healthcare’s biggest pain points, but the technology isn’t there yet. A whopping 96% of executives surveyed said they are facing challenges with ROI, and 92% said they can’t yet rely on the accuracy of the tools and find actionable results. Some 85%, meanwhile, said the tools they’re using to automate diagnostics or treatment planning aren’t yet capable of handling complex or real-world clinical environments.
  • Interoperability issues. Finally, 31% of the executives surveyed said they’re not happy with their data interoperability vendors, the chief complaints being slow updates and poor API support. This despite federal efforts to create a nationwide interoperability grid, through TEFCA. Many are struggling to adopt (FHIR) Fast Healthcare Interoperability Resources standards, and 8% say they’re stuck with technology that isn’t, well, interoperable.

Eric Wicklund is the associate content manager and senior editor for Innovation at HealthLeaders.