E-Commentary -- Eh, What's Up, Doc?

Dec. 21, 2004
Health-care industry finally wakes up to IT.

If you thought manufacturing was slow to embrace information technology, check out the health-care industry. These people are finally starting to find their way after decades of wallowing around in a Sargasso Sea of paper. For a $1.5 trillion industry, you'd think they could afford a GPS or two. Lost records. Misplaced file folders. Records stored at other locations making them largely inaccessible. Paper prescriptions written in an illegible longhand for some harried pharmacist to hazard a guess at. Records that must be physically located, picked up and carried from one location to another. Get the picture? The federal government estimates the savings to the health-care industry -- and by extension, consumers and businesses that must pay for that care -- of shifting from paper to digital records could be $140 billion a year. And that's just the dollar cost. Uncle Sam figures that medical mistakes, some no doubt partially or wholly caused by old error-prone manual processes, take the lives of 45,000 to 98,000 people annually. In July the Bush administration released a report entitled "The Decade of Health Information Technology" suggesting that government and business work together to develop standards for digital storage of medical records. The idea is that a national electronic medical records system would promote security, accuracy and communication of health data. Equally important, doctors would have instant access to a complete, current view of a patient's medical history. As a measure of how far behind health care is in IT, the industry spent about $3,000 per worker on computers, software and services. By contrast, private industry invested $7,000 per worker on average; financial services -- a leader in harnessing IT -- has spent almost $15,000 per employee. Laboring in a catch-up mode over the next few years, the health-care industry is expected to increase IT spending by 7% per year to some $48 billion by 2006. To be sure, big health maintenance organizations (HMOs), large hospitals and medical groups have already made significant gains in the use of electronic records and IT in general. Kaiser Permanente, for instance, maintains computerized patient files and enables physicians to order patients' prescriptions electronically, without fussing with old-style prescription forms. Those are the big outfits with the deep pockets to spend on high tech and the desire to make process and technology changes to achieve efficiencies. Elsewhere in health care, it's a different story. The average physician or dentist in private practice still uses paper records stored in manila folders and continues to write paper prescriptions. According to the government's estimate, less than 10% of physicians use computerized prescriptions. There are even holdouts in the big hospitals. Genesis Regional Medical Center, a 400-bed facility in central Michigan that converted to digital record-keeping about two years ago figures that about 20% of its physicians eschew the digital format. The fact is many doctors in 2004 believe they shouldn't have to spend time becoming computer technicians when they could be treating patients. Maybe, but a change is gonna come. For proof, all you have to do is look around. In this election year, both President Bush and Sen. John Kerry have seized upon health care IT as a key issue. Both favor greater investment in technology to improve record-keeping and care. Kerry has pointed out that the Veterans Administration, with new technology, has cut the cost of retrieving a medical document from $9 to next to nothing. With those kinds of savings, it's only a matter of time before health care gets with the IT program. Doug Bartholomew is a former IndustryWeek Senior Technology Editor. He is based in San Francisco.

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