New payment models will pressure IT spending, AHA chief says

Information technology spending, already a hefty investment for the nation's hospitals, could come under intense scrutiny as payers shift more financial risk to providers, said Richard Umbdenstock, president and CEO of the American Hospital Association, speaking in Chicago at the annual meeting of the American College of Healthcare Executives.

One way to manage pricey information technology investments may be for systems to work more closely together on purchases that will be compatible inside and outside hospitals, medical groups and other settings, he suggested.

Information technology too often fails to connect hospitals to providers outside their walls, he said. “I think we have spent two decades building intercoms that only ring inside,” he joked.

When payers shift financial risk to hospitals and doctors for the total cost of patient care, overhead such as information technology “becomes a four-letter word,” he warned.

Umbdenstock was referring to new payment models that seek to hold spending within a budget or award hospitals and providers a fixed amount per procedure or patient, also known as capitated payments.

Under those payment models, providers have an incentive to hold down costs because losses accrue when expense exceed fixed payments. Capitation will bring the most expensive overhead sharply into view, he said.

Follow Melanie Evans on Twitter: @MHmevans

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