In the past few months I've talked to a lot of people about the year-2000 computer problem. Everyone seems to agree that something is going to happen, but you a hear wide variety of opinions about how serious it will be.
Modern Healthcare has run many stories on the issue, reporting not only on the mounting cost of trying to fix the problem at hospitals and health systems but also on the looming legal liability. A recent cover story, headlined "See You in Court," describes what a nightmare the problem could be for healthcare executives and what a dream it could be for lawyers. In a recent issue of Business Week, articles stress how much addressing the Y2K bug will cost corporate America. One headline blares "Y2K is Worse Than Anyone Thought." The article then goes into detail about what the related problems and costs could be. For instance, back in early 1997, AT&T Corp. said it might spend $300 million to fix the Y2K problem. Now company executives are saying they could spend $900 million before the year 2000. Chase Manhattan claims it will probably spend some $363 million to fix the problem, a 21% increase from its original second-quarter estimate.
Edward Yardeni, chief economist at Deutsche Bank Securities, claims that a lot of organizations are just beginning to "wake up" to Y2K's potential for damage, and he thinks the impact could be dramatic. That prediction also applies to many healthcare organizations, as our reports have shown. Yardeni puts the chances of a recession in 2000 or 2001 at 70%, because he believes the flow of information will be interrupted.
But the problem isn't confined to the U.S. The cost of dealing with the Y2K dilemma is escalating around the world, so much so that the Gartner Group, a respected technology consulting firm, warns that Y2K glitch costs worldwide could exceed $1 trillion. David Wyss, an economist at Standard & Poor's, offers this warning: "It's like that Hitchcock film `The Birds': Each time you look, the threat-the cost-just seems to loom bigger."
Something definitely is happening, even though I personally have really never put much stock in some of the scariest scenarios we've probably all heard, such as air-traffic-control nightmares or massive power failures. I've always believed there are highly trained individuals out there who are working hard to make sure these things never happen. But maybe I, like a lot of other people, should start worrying.
For instance, a recent story in the Chicago Tribune profiled a meeting of some fearful citizens who believe a cataclysm is about to strike. Some 2,000 people attended the meeting in a Chicago suburb. One family, the McKoons from Kenosha, Wis., is preparing for all the contingencies that could come along because of Y2K failures. They have stocked up on dehydrated and canned goods as well as gardening and hunting items. They've even sold their suburban house and are urgently looking for a place in a secluded section in the rural South. Mrs. McKoon is direct: "Some people think we are nuts and should be in an insane asylum. But it's going to be much more than people think. Much more." Another attendee is quoted as saying, "It's like a storm coming." According to the article, "Pessimists believe the computer meltdown will cause a domino effect of doom: Electrical power grids will fail, 911 emergency services will shut down, stock markets will crash, governments worldwide will collapse, food production will cease, and anarchy will ensue."
Where are we headed? Some industries appear to be better prepared than others. I've talked to some healthcare CEOs who don't believe the industry is prepared for the disruptions that may occur as we head into the year 2000. One CEO said simply: "It's already too late to do anything about it. We've got a real situation on our hands."
I hope that isn't the case. In any event, we need to use the next few months to solve the problem as best we can.
Get involved,
Charles S. Lauer
Publisher
