For several decades, healthcare modernization followed a familiar playbook: create a roadmap, secure funding, launch a large transformation program and work toward a future-state technology environment. That model made sense when technology and business requirements changed slowly enough for a multi-year plan to remain relevant.
That is increasingly difficult today. Healthcare organizations are navigating financial and workforce pressures, regulatory change and rising consumer expectations while AI is rapidly reshaping what technology can do. Gartner’s 2026 CIO and Technology Executive Survey found that 94% of CIOs expect significant changes to their plans and outcomes within the next two years, while only 48% of digital initiatives meet or exceed their business outcome targets.
The challenge, then, is not simply executing the roadmap more effectively. It’s that the environment an organization is modernizing for can change while the modernization itself is still underway. A program designed around today’s priorities and today’s margin pressures may be solving for a different set of requirements — financial, regulatory, technical — by the time it’s finished.
Why the Traditional Model Keeps Falling Behind
The conventional approach is straightforward. Firstly, the organization makes a detailed plan, then it gets funding and implements the transformation plan, hoping that its systems will be modernized in the next few years. This worked when technology and business needs changed slowly enough for a plan to remain relevant until the project was completed.
In today’s world, companies must deal with pressures on their budgets, new legislation, limitations in staffing, changes in consumer preferences and fast-paced technology development – all at the same time. That is no longer the world US healthcare operates in. Whatever roadmap you draw up will face a different challenge than the one you’re addressing right now, since systems begin deteriorating from the moment of implementation. Moreover, companies are consistently behind schedule when it comes to making fundamental changes every five to seven years.
The key issue here is that of not having the necessary resources and perseverance. The “big bang” type of transformation takes an extraordinary budget, gets sidetracked during the process due to changes in business priorities, and sometimes lasts so long that by the time the results appear, leadership has already lost faith in the effort.
A Different Operating Modernized Model
This approach is not like the previous one, but it is a completely new sequencing method. Rather than trying to renew all at the same time, companies are finding they can manage the transition better by focusing on one end-to-end business capability at a time, from people to processes, to applications, to data. And then moving on to the next. This is the equivalent of remodeling a house one completed room at a time instead of completely renovating the whole building at once. The objective is to build momentum: deliver something tangible, learn from that experience, and grow into something larger.
Where AI Fits and Where It Doesn’t
The rise of AI triggers an intriguing, if not a profound, philosophical question once more: should technology optimize the current processes or make them obsolete?
The rise of AI makes this distinction even more important. Gartner found that 80% of CEOs believe AI will force operational capability overhauls. That suggests the opportunity is larger than applying AI to make existing processes faster. Applying AI to an inefficient process may improve speed, but it does not remove the underlying inefficiency.
At the same time, organizations cannot simply walk away from core processes overnight; many still need to run while change is underway. The real value of AI, then, lies in using it to identify which processes should be redesigned, which should be simplified, and which may no longer serve a purpose.
Stop Measuring the Project. Measure the Outcome.
Modernization can no longer be driven simply by the fact that technology is outdated. With US healthcare organizations under constant financial pressure and little room for error, every initiative needs to demonstrate clear business value.
This requires a different approach to prioritizing modernization. The largest programs are not necessarily the most valuable. Value is defined by improvements in business processes that lead to operating more efficiently, strengthening revenue cycle and clinical workflows, and enhancing the experience of the patient or member and providing flexibility for the future. It all boils down to this – we must measure our modernization efforts by the value they bring, and not by the scale and size of the initiatives.
US Healthcare will always have to operate in an environment of constant change – new regulations, technologies, business models, as well as ever-growing demands from members, patients, and providers. The goal was never a single state of being ‘modern’.
The winners in this environment will not be organizations that bet on big transformations and big budgets for these transformations and big revenues for these budgets. The winners will be those who will be able to constantly adapt, constantly transform, constantly deliver on value without killing the business in the process.
That is the shift healthcare needs to make: modernization is no longer a periodic effort to catch up with the future. It is becoming a core business capability for responding to it.
