The friction of progress: Why modernization is stalling for healthcare providers

The healthcare industry has reached a critical juncture. For years, the narrative has been one of digital transformation: a broad, often vaguely defined goal of moving from paper to glass and from intuition to data. But as we move through the current fiscal year, that narrative is shifting. The era of digital experimentation is over, replaced by a much more demanding era of operational realism.

Alithya’s recent deep-dive survey of over 125 US healthcare executives spanning clinical, financial, and operational leadership reveals a profound paradox. On one hand, there is an undeniable appetite for growth and a belief that advancements in technology, specifically artificial intelligence, is the key to unlocking it. On the other hand, organizations are hitting a ceiling of structural friction. Workforce shortages, aging infrastructure, and an increasingly sophisticated threat landscape are creating a drag on even the most ambitious modernization plans.

To navigate the quarters ahead, leaders must understand not just what technologies to buy, but how to overcome the systemic friction that prevents those technologies from delivering real-world value.

The growth paradox: ambition vs. ability

The survey data highlights a surprising level of optimism among healthcare leaders. Despite the well-documented pressures of thin margins and rising costs, more than half of the executives surveyed expect their organizations to outperform the broader industry growth rate. This suggests that the sector is no longer in survival mode but is actively looking to capture market share and expand service lines.

However, this ambition is being met with a new kind of resistance. We call this "Structural Friction." It is the gap between wanting to scale a new service line and having the integrated data, secure infrastructure, and stabilized workforce to actually do it. For many providers, growth is considered expensive because it requires disproportionate effort and manual workarounds to overcome legacy systems.

The question for leadership is no longer "Can we grow?" but "Can we grow efficiently?" The full report explores the specific KPIs executives are using to measure this efficiency and identifies the primary bottlenecks currently holding back departmental expansion.

The AI value chain: moving beyond the hype

Artificial Intelligence has dominated the conversation for the last 18 months, but our research shows a significant shift in how healthcare leaders are approaching it. The focus is moving away from generative chat tools toward agentic AI systems capable of performing complex, multi-step tasks within a clinical or administrative workflow.

There is a growing realization that AI is not a plug-and-play solution. It is the final link in a complex value chain. To get to the point where an AI agent can accurately predict patient no-shows or automate a complex billing dispute, an organization must first solve for:

1. Data integrity: Moving from fragmented silos to a "clean" data layer.
2. Infrastructure: Transitioning from rigid legacy servers to elastic cloud environments.
3. Governance: Establishing the guardrails that allow for innovation without compromising patient safety or privacy.

The survey highlights a massive surge in foundational investments, specifically in data modernization and cloud enablement. Executives are recognizing that skipping these steps leads to "AI Debt," where tools are deployed but fail to scale or provide accurate insights. The full analysis details the specific stages of AI maturity and where the most successful organizations are placing their bets right now.

The security imperative: when risk becomes a growth constraint

In previous years, cybersecurity was often viewed as a defensive cost, or a "tax" paid to prevent a worst-case scenario. Our research indicates that this perspective has fundamentally changed. Security is now viewed as a primary business risk, tied directly with AI-driven disruption as the top challenge facing the industry.

The financial stakes have become too high to ignore. With the average cost of a breach in health systems now reaching nearly $10 million, a single incident can wipe out an entire year’s operating margin. This has moved security from the server room to the boardroom.

However, a significant execution gap remains. While executives acknowledge the risk, the integration of security into the broader business strategy is still lagging in many organizations. The report dives into the specific governance deficits found across the provider landscape, including:

• The disconnect between IT security and corporate risk management.
• The reliance on reactive incident response rather than proactive threat hunting.
• The critical shortage of cyber-literacy among non-technical leadership.

Bridging this gap is no longer optional. For an organization to be innovative, it must first be resilient.

The workforce crisis: technology as a stabilizer

Perhaps the most persistent source of friction is the workforce. The shortage of physicians and nurses is not a temporary trend; it is a structural reality that will define the next decade of care delivery.

In this environment, technology's role has shifted. It is no longer just about efficiency; it is about preservation. Every minute a clinician spends on administrative "pajama time" charting, responding to low-level alerts, or navigating non-interoperable systems is a minute lost to patient care and a step closer to burnout.

The research shows a high demand for solutions that provide direct workflow alignment. Leaders are no longer interested in cool features; they want tools that remove the heavy burden of manual tasks that keep staff from working at the top of their licenses. The report examines how the most forward-thinking providers are using automation not to replace humans, but to protect them.

A new mandate for strategic partnerships

The era of the software vendor is ending, replaced by the need for strategic partners. Healthcare leaders are increasingly frustrated with fragmented tools that don't talk to each other and vendors that don't understand the unique clinical and financial pressures of the provider environment.

Our survey identified a new set of criteria that executives are using to evaluate their partners. Interoperability and ease of use are now fundamental requirements. To win in this market, partners must prove they can:

• Align with complex clinical and operational workflows.
• Provide a clear and safe roadmap for AI adoption.
• Translate raw data into verifiable financial outcomes.

The roadmap to resilience

The insights gathered from this cross-section of US healthcare leadership point toward a clear conclusion: The providers that thrive over the next 24 months will be those that prioritize operational resilience over digital experimentation.

The full Healthcare Provider Report provides a deeper dive into the specific metrics and maturity models that are separating industry leaders from those struggling with structural friction. For those looking to refine their strategies for the quarters ahead, understanding these executive sentiments and execution priorities is a necessary step in navigating the complexities of the current healthcare environment.