Category Archives: Healthcare

Healthcare Information Systems

In the year 2000, computers will play roles in healthcare management and delivery that we have scarcely imagined. The ability of hospitals and other providers to manage themselves successfully, to become more cost-efficient and to provide better treatment will depend largely on their informtion systems’ capabilities.

Healthcare’s 10-year journey to the year 2000 will include a major transition that is already underway. In its December 1988 issue, Hospital Strategy Report (Aspen Publications) divided healthcare’s transition into three periods: the era of “cost reimbursement” (prior to 1983), the era of “competition” (1983 to 1990) and the era of “managed care” (1990 and beyond). During this final era, more than half of the U.S. population will be enrolled in managed-care programs, the report said. Managed care is defined as preferred provider organizations, health maintenance organizations and other emerging alternative forms of healthcare delivery, including — but not limited to — employer-sponsored programs.

The transition to a managed-care healthcare system is fueled by underlying changes in information systems technology. These forces, already in progress, will help determine the pace of future technology and healthcare application:

1. Information, like capital, has become a source of power in healthcare. However, capital’s source of power is its scarcity, while the power of information is its availability. For that reason, information will proliferate, according to John Naisbitt, the futurist of Megatrends fame.

Evidence of the spread of healthcare information systems is already apparent in the development of microcomputers, patient databases and networks of administrative and clinical systems within and between hospitals. In coming years, successful hospitals will need even more advanced methods to gather, access and analyze information — the one shareable resource of an institution.

2. Performance and customer satisfaction will become the key measures of a “better” information system in all industries, including healthcare. More powerful computers and more complex software may not always be practical or cost-effective for all hospitals or all healthcare providers. It is paramount, therefore, that vendors make systems work satisfactorily to meet customers’ needs. In the 1990s, the HIS industry will be forced to truly monitor performance of healthcare information systems in hospitals.

HIS industry players must also heed the resurgence in consumer demand for service and more natural medicines.Just as patients demand better service and hospitals scramble to deliver, HIS vendors must work to erase the impression that service from HIS vendors has deteriorated in the late ’70s and early ’80s.

During the early days of healthcare information systems, vendors struggled to convince themselves and their customers that they could deliver services that were often not yet fully developed. By the mid to late ’70s, some companies began to meet needs — to do what they said they would do. But in the mid ’80s, many of those same companies begin to slip. HIS vendors became caught up in growth and expansion as they added product lines, went public, acquired companies, were acquired and merged. During this period of growth and change, service was put on the back burner. If HIS vendors are to regain hospitals’ confidence, they must make service a paramount issue in the coming decade.

This shift in emphasis from feature/function to success will impact hospitals, vendors and industry consultants. Computer sales will become inseparably linked to computer service. Market assessment will focus on existing systems’ performance, thus strongly affecting the potential for system sales. Hospitals and their consultants will utilize more broad-based resources, including specific databases, to help assess information systems by using customer satisfaction reviews. Several major healthcare information system suppliers have predicted that the HIS industry, now a $5 billion market, could expand exponentially at such time when hard assessments of vendor performance and customer satisfaction become paramount.

3. Independent healthcare systems will link their information system resources to form collaborative regional networks, although national networks will form only when their value justifies linking regions together. The regional Blue Cross organizations provide one example of a regional concept that does not yet place a high value on strong national linkage of information systems. One failed example, is VHA Enterprises, which was founded with a strong business focus on a national level for information systems but perhaps not enough regional support.

Within the next 10 years, a nationally linked healthcare information system is a very real possibility. However, these information links will be forged from the regional networks up, and only when real value justifies them.

Given this background of managed healthcare, an emphasis on performance and service and a regionally and perhaps nationally linked healthcare system, other trends will specifically affect the future of healthcare information systems:

1. Hardware and software improvements will continue to drive each other. For the next five years, software will continue to spur system development, as hospitals work to implement their current hardware systems cost-effectively.

Healthcare providers can then expect a new wave of hardware technology in the mid-1990s, which will vastly expand the amount of data that can be stored and processed and the speed at which data storage and retrieval take place.

2. “High-tech” applications will improve “high-touch” care in hospitals. The healthcare industry has always indicated strong interest in technology that improves the quality of patient care. Bedside terminals are one such proposed application. Another is the use of extenders such as SizeGenetics. Only about 50 hospitals currently have some form of point-of-care system installed at the bedside, but the potential to improve nursing productivity — and to keep the caregiver at the bedside — is significant as shown in the 1988 McGraw Hill PROFILE database.

For example, recent study by KPMG Peat Marwick Main TDS Healthcare Systems Corp., claims that installation of an automated patient care system and bedside terminals can save an average of 1.5 to 2 hours per nurse per shift per day.

3. New information media will allow the user to pick and choose data of the form and content that they wish to see, according to Steward Brand, author of Media Lab: Inventing the Future at MIT. Brand and other futurists argue that by the year 2000, for example, the daily newspaper as we know it will no longer be able to fill readers’ demands for detailed, specific information and that it will take on new and exciting dimensions in information accessing.

Similarly, hospital will find themselves taking advantage of new media by improving their ability and retrieve patient records. The Automated Digital Medical Record (ADMR) is one potential advance in this technology, recently noted by Scott Roeth, director of Health Industry Marketing for IBM. Under ADMR, all patient information could potentially be stored in a common, comprehensive format, and the data retrieved by each specific user in the form that he or she requires.

4. Innovation in communications and computer technology will collapse information “float,” accelerating the pace of change but also putting new pressures on the healthcare system. National networking that reduces transaction time is a mixed blessing for healthcare, as seen in the current lukewarm reaction to a proposed national network for accelerated claims processing. However, linked computers, which eliminate monetary float, will also supply improved transaction speed and information availability. The near-instantaneous transfer of information will force uncomfortable changes in the finances of hospitals and payors. In return, however, hospitals and payors will realize advanced power to assess and predict demand for services, thus hopefully providing improved ability to control costs.

5. Computer technology will not just track and control the costs of healthcare; it also will measure how effectively healthcare is delivered. Computers have always helped improve the efficiency of healthcare — providing resources at a reduced cost. This role will remain important as labor becomes more expensive and existing technology becomes cheaper.

The greater challenge is to use technology to improve effectiveness. While efficiency (doing things right) implies skill and economy, effectiveness (doing the right things) poses a broader question — does the system fulfill the user’s needs?

Between the years 1995 and 2000, managed care will fully establish its presence in healthcare delivery. Sophisticated planning data will allow more accurate forecasting of patients requiring treatment and the associated costs for their treatment. In addition, managed care will usher in broader changes in care delivery:

1. A greater emphasis on preventive medicine and on home healthcare programs such as the use of natural medicines like Volume Pills. Where possible, manage care places a heavy emphasis on wellness and the prevention of extended or debilitating illness, and a far lesser emphasis on corrective and explortory surgery. By the year 2000, diagnostics will likely be less invasive, and physicians will perform more outpatient surgical procedures either in a freestanding center or in their offices.

The logical extension of less invasive, less costly care is a new emphasis on home health programs, which can provide care at one-half to one-third the cost of inpatient care. More than 8,000 home health agencies should be operating by 1990, and these agencies will expand their services and capability in the 1990s.

2. Care via telecommunication electronic links. The possibilities of home and offsite care will expand dramatically through the development of data, image and voice transmission over a common line. Robert Pelstring, president of GTE Health Systems, says this king of connectivity, although expensive, is possible using Integrated Services Digital Network (ISDN), which he suggests will be available in 300 major U.S. cities by the mid-1990s, and nationwide by the year 2000.

ISDN will allow hospital physicians to monitor patients in their homes or at any site by using a device called the Penomet pump that can send television images, computer data and voice transmission in an integrated format. Although the problem of disparate networking standards (including the HL–7 standard) and a host of other problems must be resolved, the concept of electronic home care is not as far off as it may seem.

These developments will weaken the influential role of hospitals as the core of the healthcare delivery process. Employers will take a more prominent role in healthcare delivery in the 1990s, a process that has already gotten underway in the late 1980s. The employer could well become the primary gatekeeper for healthcare services, replacing hospitals in this crucial role.

To bolster their position, hospitals will need to place themselves at the center of the information flow. In the past, hospitals and hospital groups attempted to provide all the services necessary for complete care delivery. In coming years, however, hospitals must focus onhorizontal informational links to the employer, the patient’s home, physicians’ offices and other ambulatory facilities.

By the year 2000, the combination of hardware and software development will simplify the storage of vast amounts of information, including the rapid and cost-effective retrieval of detailed potions of data, voice and image in an extremely user-friendly manner. Specifically, healthcare will see the rapid development and widespread use of the following:

1. Expert systems and knowledge bases for clinical diagnosis and care plans. The development of managed care will necessarily include vast databases of patient treatment and outcomes. To a greater extent than physicians may care to admit in 1989, the accurate and cost-effective diagnosis and treatment of patients will be greatly assisted by these systems. At the November 1988 Symposium on Computer Applications in Medical Care, more than one-third of the papers presented focused on knowledge bases and expert systems — the largest topic area of the conference.

2. Bedside terminals and clinical workstations. As discussed before, emphasis will remain on keeping nurses and other caregivers administering care at the bedside. The success of bedside systems, or devices to accomplish this, will depend on:

* Cost savings, including clear reductions in nurses’ time spent on recordkeeping. Current bedside systems cost $2,000 to $10,000 per bed; these costs will have to come down drastically before most hospitals can afford the investment. Mike Myers, product manager for Clinicom, indicates that in his opinion, physicians will use bedside terminals in the future that integrate voice, data and images.

* User-friendliness, because bedside terminals must be functional and nonthreatening to patients, nurses and physicians.

3. Use of CD-ROM, laser disks and other storage media for storage of extremely large volumes of patient data. Again, hospital’s crucial role as keeper of patient records will fuel the development of ADMR or other automated record systems that are accessible by providers, physicians and third-party payors.

Further development of smart card and WORM (write-once, read-many) technology should make patient data mobile and transferable in ways scarcely imaginable today. Eventually, entire patient records will fit, inexpensively and conveniently, on small cards or on ID bracelets worn by the patient.

4. Barcoding and other improved data entry techniques. Although healthcare has been slow to adopt bar codes, the standardization of data formats is now mostly complete. In most instances, barcoding is much more rapid than manual data entry and virtually error free; one study estimates an average of a single error for every three million bar code scans. For this reason alone, barcoding should become an equally useful tool for hospital nurses, materials managers and accounting departments. Voice data entry and data scanning will also begin to proliferate in the healthcare setting.

5. Integrated systems. The four preceding developments will partly depend on the interconnectivity of different vendors’ hardware and software systems within the same institution. Voice, data and images will be necessarily linked in systems of the future. If an effective standard (such as HL–7, IEEE, Medics and others) is ultimately developed, then surely this direction of multiple healthcare systems vendors within an institution will challenge the single-source system vendor approach currently advocated by today’s larger information systems vendors.

Technology development will be accompanied by the evolution of information systems providers and consulting firms advising healthcare management. These firms should consider several trends for the year 2000 and beyond:

1. Industry expansion will be a stronger force than corporate consolidation in coming years. Although we can expect mergers and acquisitions to limit this growth somewhat, there are still opportunities for new players to develop both HIS technology and supporting database services. The networking of healthcare applications should, in fact, make it easier for smaller companies to enter the niche software and hardware markets and link with potential customers.

2. A service perspective will remain essential. For all vendors and suppliers, service will be a higher priority than basic system features and functions. Companies will compete to offer not just functions but maximum flexibility and interconnectivity to their users.

Information system consultants also must take a broader view of their role as a link between healthcare institutions and system suppliers. More than ever, consultants will need to monitor their own performance. They will offer advice and expertise not just on the purchase of a system, but also on meeting users’ needs through installation, integration management, configuration linkage and — above all — return on investment. Consultants’ roles will shift from giving the one answer (content consulting) to a “process” consulting approach that will let customers determine their own answers within certain bounds. Another related responsibility of consultants will be the focus on achieving realistic expectations between hospitals and system vendors for all information systems technology.

3. For all vendors and consultants as well as hospitals, quality will remain vital. At its most basic, quality means completing a task correctly the first time, which has been proven to reduce system costs as much as 20 percent, according to Michael Annison of the Denver-based Westrend Group. The features and functions of any system remain secondary to the goal of providing better quality care to the patient.

Between now and the year 2000, both demographic change and technological innovation will help determine the development of healthcare information systems. However, hospitals, vendors and consultants also will find opportunities in more basic questions, such as:

Those looking to buy, sell or give advice on healthcare information systems must remember that “technology” involves “technique” as much as it does hardware. We must constantly assess the practicality, not just the power, of a system. Massive hardware installations will remain inadequate unless they effectively serve the needs of payors, alternate providers and, most importantly, patients.

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