That pesky year-2000 computer bug won't wait for the millennium. It will be peeking out before the spring thaw.
Lax preparation for the Y2K problem in healthcare will produce consequences early, setting off a collective shudder over the industry's tardiness in meeting the bug head-on with remedies and contingencies.
The flaw, which will arise as computers are unable to read the year 2000, will hit first in medium-range healthcare planning: budgeting, chronic-care management, maternity timelines and contracts of a year or more.
From there it will spread to every foundation and floorboard of the industry, affecting hospitals, HMOs, physician practices and payers.
Look for effects in these areas first:
* Capital expenditures. The replacement of multimillion-dollar information systems is already tying up hospital budgets, assuming executives were farsighted enough to figure that some systems weren't salvageable and that the purchase and implementation would take more than a year. But other unforeseen expenses are bound to crop up. Also, the costs for medical devices won't be clear until 1999.
* Operations expenditures. Preparing contingencies, planning implementation of new systems and training work forces for both require a lot of personnel. The Y2K labor cost is likely to be severely underestimated at first, leading to lots of budget rejiggering later in the year.
* Cash flow. There's a real chance that claims and payments will be slowed or even cut off by glitches in electronic data interchange systems. Consultants and Y2K experts are advising healthcare organizations to set aside reserves and contingency funds to prevent cash-flow crises.
* Project lineups. The thing to remember about all this cost spiraling and cash stashing is that providers have only so much money. If they're spending to troubleshoot the Y2K problem while storing a lot to ride out its consequences, some initiatives will have to be delayed or killed.
* HMO provider panels. Managed-care plans depend mightily on assurances they are sending their enrollees to providers who are well prepared to provide quality care. But if patients suffer Y2K-related complications, HMOs are liable, especially if they restrict where enrollees can and can't go. Physicians are among the groups that are least prepared for Y2K. If HMOs start auditing hospitals and doctors on Y2K preparedness and don't like what they see, the ax may fall.
* Physician practices. A half-dozen information systems predominate in physician practices, but nearly 1,800 vendors sell or maintain systems. If small vendors go out of business rather than pay the costs of repair, doctors will be in the lurch.
Ultimately, the cost of the Y2K problem will be measured in lost opportunity. Healthcare is finally on the threshold of improving the support for operational and clinical systems, which would enhance the management and delivery of care. But instead, executives are forced to solve immediate problems and divert capital that could have been used to innovate.
The healthcare organizations that find a way to solve problems and innovate during this year of reckoning will get a running start on the future and a market lead that will be difficult for less-prepared competitors to overcome.