Healthcare IT

Jodie Humphries

Healthcare IT is big business in America, especially under President Obama's plans to deploy electronic health records for every clinician and hospital in the US. As such, many hospitals are planning on boosting their healthcare IT spending, but in reality, is this happening?

A report this year found that three quarters of small to mid-sized hospitals in the US plan to increase their IT budgets this year, with clinical point-of-care systems being the top healthcare IT priority, as they are driven by the goverment's health IT stimulus programs.

Government regulatory matters, followed by financial incentives, were named as the top issues driving healthcare over the next two years, said the respondents to a survey conducted by the Healthcare Information and Management Systems Society (HIMSS) last October and released in January.

HIMSS' phone survey of 202 IT executives at small to mid-sized hospitals included 125 CIOs, CTOs, VPs and directors of IT in the US and 77 in other countries, including Canada, the U.K., Germany, France and China.

Of those surveyed, the hospitals ranged from 100 to 400 beds and did not include US hospitals run by the federal government, such as VA facilities.

About 76 percent of US hospital IT executives surveyed said they planned to increase healthcare IT spending this year, while 17 percent expected no change in spending and only eight percent predicted reduced budgets.

Overwhelming, hospitals in the US are focused on an explosion in clinical data, including images, over the next two years.

Much of that data is expected to come from deployments of e-medical record systems as these hospitals race to participate in the US federal government's $20 billion stimulus program that rewards healthcare providers for their meaningful use of healthcare IT systems starting in 2011.

Overall, US hospitals have more complex IT hardware environments than hospitals in other countries. US survey respondents have an average 75 servers in their hospitals and one-third of US hospitals have not yet begun to virtualize their data centers.

Often, there is one server per applications at US hospitals, said Jamie Coffin, VP and general manager of Dell Computer's healthcare and life sciences business, which sponsored the HIMSS survey. As hospitals plan for the explosion of data and storage needs, virtualization can help the proliferation of multiple underutilized servers and storage devices and reduce costs, he said.

Lagging behind

Technology can play an important role in minimizing overall health costs by improving efficiency and reducing mistakes. But despite the report saying that spending onhealthcare IT is increasing, US healthcare industry lags in healthcare IT spending, behind not only its competitors internationally, but also other industries domestically. Jeffrey Rideout, a medical doctor and former head of the Internet Business Solutions Group at Cisco Systems' Healthcare Practice says the average company outside the health industry spends seven times as much as US healthcare companies on IT, and companies in some wealthier industries like banking spend up to twenty times as much. US competitors abroad have also consistently outspent the US government on healthcare IT investment.

One of the most commonly cited goals that could be spurred by increased investment is the shift to electronic medical records (EMR's). Though critics worry about privacy, digitizing patient records achieves a number of ends at once: it cuts paper costs and also reduces the likelihood of errors in prescriptions and in the transfer of data between hospitals - flaws that can cause medical errors and prompt the need for expensive ongoing care, Council on Foreign Relations states. The new law aims to improve coordination among health providers electronically, including requiring all medical paperwork and billing transactions to follow uniform standards.

President Obama's Stimulus program

President Obama designated $19.5 billion to expand the use of EMR'S in the February 2009 stimulus package. Under the stimulus program, hospitals and physicians can claim millions of dollars for healthcare IT purchases, and will be penalized if they do not go digital by 2015. Obama has said the changes will save billions and will minimize medication errors.

The percentage of small physician practices that are planning to implement an EMR has grown in the last six months, according to a new vendor survey. But while the percentage of respondents who said the American Recovery and Reinvestment Act (ARRA) was driving technology adoption more than doubled during this period, most are still unaware of requirements and nearly half say it will not impact their buying decision.NaviNet compared its March 2010 survey with one conducted in August 2009 and found that EMR implementation was higher than expected among this segment. In 2009, only nine percent of respondents from provider practices with 10 or fewer physicians reported that they planned to implement EMRs within the next six months. Six months later in 2010, 12 percent are currently implementing, Healthcare IT News states.

The survey found that 17 percent of respondents say their offices will implement a new EMR by end of 2011. Of those, 68 percent will do so within the next 12 months. If EMR adoption follows previous growth rates, the industry can expect an even higher percentage of practices implementing EMRs than predicted.

Healthcare IT in America still has a way to go, but steps are being made to implement it.