With the need to link their disparate parts growing more acute, healthcare systems allocated 3.7% of their operating budgets last year to management information systems, according to a recent survey by MODERN HEALTHCARE.
Healthcare still lags behind industries such as banking and telecommunications, where as much as 10% of operating and capital budgets goes to MIS, industry observers say.
The MIS spending data were compiled as part of the 1998 Multi-unit Providers Survey (May 25, p. 35).
The survey, which relies on self-reported data, had responses from 139 systems about their MIS spending in 1997.
While the overall percentage of money systems allocated was less than the 3.9% reported by 155 systems in 1996, a strict comparison cannot be made between the two years because the respondents vary.
"It's too low in the sense of what we know we need to do," says Frank Cavanaugh, a principal at Coopers & Lybrand in Chicago.
Cavanaugh says an increase in future spending could be spurred by the problem of computers not recognizing the year 2000, a potential troublemaker in many systems. The year-2000 problem could just be a problem, or it could be an opportunity for healthcare systems to upgrade their entire systems not only to solve the potential glitches but also to integrate their systems, he says.
On the other hand, Scott Decker, vice president of information services at Irving, Texas-based VHA, says year-2000 problems could delay the advance of information systems as healthcare systems first try to make sure that current hardware and software keeps working.
"It's not going to be a very fun year for new investment," Decker says.
According to the Multi-unit Providers Survey, 15 non-Catholic religious hospital systems were the biggest spenders when it came to information systems last year. Those systems reported allocating 4.9% of their annual operating budgets to MIS. That's an increase over 1996 when 16 non-Catholic religious systems reported setting aside 4.7% of their budgets.
Coming in a close second in 1997 were 23 Catholic systems that reported setting aside 4.5% of their operating budgets. Once again, that's an increase over 1996 when 18 Catholic systems reported spending 3.7% of their budgets.
The 70 secular not-for-profit hospitals that responded to the survey said they allocated 3.3% of their annual operating budgets last year, a slight increase over 1996 when 75 systems reported spending 3.2%.
The 19 for-profit systems that reported figures in 1997 were among the lowest spenders, allocating only 3.5% of their operating budgets to MIS. Compare that with 1996 when 30 for-profit systems reported spending 6.1%.
Columbia/HCA Healthcare Corp., the huge Nashville-based healthcare company, didn't report figures for either year. Neither did another for-profit giant, Santa Barbara, Calif.-based Tenet Healthcare Corp.
Despite the apparently low spending on information systems in healthcare, executives say they are striving for that pie-in-the-sky ideal when all their system's components-from back office operations to patient records-are interconnected.
But much like it did 50 years ago, the practice of medicine still means putting pen to paper.
While the MIS proliferation has helped standardize and link some business and clinical tasks, healthcare systems still have a way to go.
The pace of consolidations in recent years has just complicated matters.
Standardizing and interconnecting systems, however, must be the ultimate goal, says Bob Boysen, vice president of information services at Des Moines-based Iowa Health System.
Boysen says the seven-hospital system spent about 2.1% of its 1997 operating budget on MIS. He declined to provide more specific financial data.
He says he expects the system's MIS spending level to increase as it works to standardize its information systems, everything from laboratory to financial to physician practice management systems.
"It costs you money to get to that strategy," Boysen says. "However, if you don't do that and you try to patch things together, you will never get economies of scale."
Executives of Iowa Health System hope to have its core systems standardized by September 2000.
By the end of this year, Chicago-based Catholic Health Partners will finish linking its three acute-care hospitals clinically through an information system. On the business side, the three are linked already.
Once the clinical link is complete, a doctor at one hospital will be able to access some information on patients treated at either of the other two facilities.
The goal is to one day have all the healthcare system's information systems feed into a central repository where clinical, demographic and financial information on patients can be accessed.
The hospital system has been buying software, but it will be at least three years before such a repository can take shape, says Dave Furst, vice president of information services at Catholic Health Partners. In its response to the MODERN HEALTHCARE*survey, the system reported spending 2.1% of its 1997 operating budget on information systems.
Furst says he has a motto about information systems. The key, he says, is being able to provide "the right information to the right person at the right time for the right cost."