Hospital executives have awakened to the need to improve their information systems. They know it will take more money, more time and more executive-level attention than they've given it until now.
Pressure for action comes from all directions. There's an impetus to improve clinical care and to be able to prove that it's better. There's a need to connect with outside facilities and string a financial lifeline to claims processors. There's a quest for patient information on demand, from immediate test results to chronicling the history of patient care in the hospital and other healthcare settings.
But by far, the biggest force behind plans to spend more on information technology is the pressure from the government and payers to control costs. No other influence even comes close.
The decision to pick one vendor over another is starting to involve much more than simple cost and vendor support concerns. Factors such as a system's ability to talk to other vendors' products and its clinical sophistication were crucial to four out of every 10 buying decisions by facilities last year.
Those are some of the key attitudes detected in the fourth annual survey of information systems trends conducted for MODERN HEALTHCARE by Zinn Enterprises and the healthcare practice of Coopers & Lybrand.
Of the 688 hospitals in the sample, 60% were hospitals with fewer than 201 beds, 13% had 400 beds or more, and 27% had from 200 to 400 beds. A little more than half of the respondents were chief financial officers; 24% were top information system executives, 17% were chief executive officers and the rest were senior managers.
During the next three years, 93% of the respondents expect to increase their spending on information systems by an average of 10% a year on operations and almost 12% on capital projects. One in five respondents said they expect an average annual jump in capital spending of more than 20% (See chart, p. 63).
Singular preoccupation.Asked for thebiggest impact on increased use of computerization, 55% of respondents identified government and payer pressure to control costs. A distant second at 10% were those who said their installed systems were outdated and unable to respond to change. Fewer than 10% mentioned such factors as pressure to improve clinical care and the need to connect to outside facilities or payers (See chart, this page).
So even though executives are embracing information technology as a solution to healthcare challenges, "it looks like we're only doing this because we have no choice," said Frank Cavanaugh, an information systems consultant with the Chicago office of Coopers & Lybrand. "It surprised me that it's so dramatic" an emphasis on cost control.
It's something of a turnabout to look to information technology as a vehicle to control costs, considering that a primary concern until recently was computerization's capital cost vs. benefits. In the last Zinn/MODERN HEALTHCARE survey in November 1992, 60% of the respondents said the biggest deterrent to buying clinical information systems was difficulty in justifying their cost.
But that was before President Clinton and employer coalitions brought momentum to the principles of managed healthcare and fixed-price contracts for health services. Suddenly, hospitals are facing the prospect of having to bid their price in advance and then shepherd their patients and resources to make good on performance without spending more than they get.
Reform changes the game."The
Clinton reform plan has forced people to look inward and ask, `What is the biggest single thing we're worried about?'*" said Tim Zinn, president of the Chicago-based consulting and research firm that bears his name.
More than half of the respondents said they had to make changes in their information system to address the proposed healthcare reform plan-outdistancing in significance organizational, payment-system and facility-design changes. Only healthcare alliances and affiliations, mentioned by three in four respondents, rated higher as a reason to change information systems.
"External pressures are causing internal concerns that only information systems can begin to address," Mr. Zinn said.
Those internal concerns involve improving productivity. Asked about information-system priorities for the next two years, productivity received the highest ranking, with almost 50% of respondents identifying it as important (See chart, p. 68).
"People are thinking about spending more money to make themselves more efficient," Mr. Zinn said. "We still want the computerized patient record, but we're retrenching and saying there's some things we need to do first ... what will help operations instead of what's the latest technology available."
That doesn't mean executives are ignoring innovative clinical information tools and advanced technology. In fact, they appear to be taking a keen interest in some of the emerging technologies.
For example, clinical decision support and integration of data bases ranked second and third, respectively, among priorities envisioned for the next 24 months. Comparing physician practice patterns against standard protocols ranked highest among information system capabilities considered useful in enhancing the hospital/physician business relationship.
But that's consistent with the overriding concern of controlling costs, Mr. Cavanaugh said. Keeping costs in line depends on influencing the volume of tests and other services ordered by physicians. If information can be marshaled to reduce volume and duplication, it will pay off for healthcare operations, he said.
At EMH Regional Medical Center in Elyria, Ohio, executives are targeting physicians as the focus of new computerization efforts. Systems that allow physicians to order tests and get results from computers on the hospital floors are a high priority, said James L. Keegan, president and chief executive officer.
The hospital recently bought a clinical cost accounting system from HBO & Co. as part of its attempt to get a handle on expenses. "We need to analyze the care patterns of individual doctors and go after the doctors on the high end," Mr. Keegan said.
Systems that track practice patterns and suggest treatments can narrow the range of options from which physicians can choose. That helps institutions better manage costs, and it promotes medical practices that lead to the best possible outcome at the least expense, Mr. Cavanaugh said.
Just keeping track of previous work can result in savings. For example, physicians who don't have access to or knowledge about previous test results can inadvertently request duplicate tests. Or, new batteries of tests may be ordered for a worrisome symptom identified earlier as normal for that patient, Mr. Cavanaugh said. Systems that record results both in the hospital and elsewhere in an integrated network can prevent duplication and the expense they involve.
Shopping lists.Respondents plan awide range of information-technology implementation in the next three years, reflecting the likelihood that previous computerization wasn't approached with any long-range vision, said Michael Kreitzer, a healthcare consultant with Coopers & Lybrand.
Blanks in the lineup of "feeder" systems are different for individual organizations depending on what they've bought already, usually in isolation. But all the blanks must be filled in before institutions can report comprehensive data to a central data base for integrated storage and analysis, Mr. Kreitzer said.
Bay Area Hospital in Coos Bay, Ore., tried to get everything at once when it bought a system from GTE Health Systems three years ago, said Tim Salisbury, its chief financial officer. The system included patient care, finance, laboratory, radiology, and nursing scheduling and notes.
But now, the 131-bed hospital realizes it needs to develop a two-way remote link with physicians to bring all patient data together in a single data base, Mr. Salisbury said. A handful of physicians are using personal computers and modems to gain access to the hospital information system, but it only works one-way and is a limited solution, he said.
Storage systems such as clinical data bases and optical disk "jukeboxes" are high on most lists (See chart, p. 70). But most healthcare institutions will have to spend $500,000 or more on computerization at the points where patient-care data originate before they can make use of such data bases, he said.
Needs and priorities haven't changed much since the last survey in 1992, although the limited interest in such technologies as voice-data entry and radiology-image storage has waned further, to less than 20% of survey respondents.
When it comes to buying decisions, however, priorities are moving away from traditional preoccupation with price discounts and vendor relationships. Those considerations are still important, but a system's ability to mesh with those of other vendors and integrate future technological innovation is becoming an important rationale in choosing systems, said Mr. Zinn.
That "open architecture" was instrumental in EMH Regional's recent decision to buy an Allegra patient-care system from Shared Medical Systems. "The system had to have the capability of building into it other vendors' software, or we wouldn't have brought it in," said Mr. Keegan.
The hospital is in the process of replacing existing systems that don't have the capacity to link with the Allegra system, he said.
In the survey, 30% of respondents said their choice of vendor for their most recent information system was based on flexible computer architecture. That's a strategy that can protect a hospital's investment by keeping it able to use whatever emerging technology or network linkage eventually develops in the industry. Some 13% chose a system for its clinical capabilities (See chart, this page).
That trend was more pronounced for hospitals operating 200 beds or more. One in three hospitals of 200 to 400 beds identified open architecture as their rationale for choosing a vendor. Clinical considerations were more pronounced among hospitals with 400 beds or more, at 22%.
Nearly one in four smaller hospitals said they picked their vendor based on price, vs. 19% of the overall sample.