A Paperless Health-Care System?
____________________________________
SPECIAL REPORT: TECH & MEDICINE
BusinessWeek
JULY 7, 2004
businessweek.com:/print/technology/content/jul2004/tc2004077_8164_tc_171.htm?tc
At some hospitals, like Evanston Northwestern in Illinois, digital records are saving money and possibly lives. It's the start of an IT boom
-----------------------------
Mark Neaman doesn't like pens, paper, and ink. He gets especially irked when he sees doctors or nurses using them in his hospitals. Neaman is the CEO of Evanston Northwestern Healthcare. A 6,200 employee health-care provider with annual revenues of $1 billion and three hospitals and a research center in the Chicago suburbs, Evanston Northwestern is one of a small number of health-care institutions in the U.S. to go completely paperless. The $30 million project puts virtually ever process in the hospital online, from purchase orders and prescriptions to scheduling surgical bays and transcribing medical records. Even the foot-thick charts full of illegible physicians' scribbles are now neatly captured in electronic form.
The project took three years, finishing in late May. All three hospitals and 50 affiliated doctors' offices are now paperless. It's very early, but Neaman says the results are promising. Doctors now receive patients' mammogram test results in a single day, compared to a three-week wait before. Errors in transcriptions and prescriptions have fallen significantly. And late administration of medication to patients has dropped by 70%.
Before the big technology overhaul, Neaman's nurses spent one-third of their time reading and writing paper charts. Now they spend less than half that time on electronic charts. According to Neaman, the organization could save $10 million per year. "We think we can continue to improve that efficiency by doing things right the first time, reducing errors, and freeing up our people," he says.
MISERLY IT SPENDING. Evanston Northwestern has realized the dream of the U.S. health-care system, a future where no one uses paper, test results move from lab to doctor to the medical records quickly, and where docs, nurses, patients, and insurers can easily swap info electronically. It's a future where neurosurgeons can read X-rays and test results at home and decide whether a case merits emergency surgery before rushing to the hospital. And for a host of technology companies, it's a future where hospitals and doctors become big tech buyers.
Today, that future is still more vision than reality. Annual health-care spending in the U.S. will hit $1.8 trillion in 2004, according to the Centers for Medicare & Medicaid. But less than 5% of that will go into information technology -- far short of what's found in financial institutions and most other service-oriented industries.
Today, health care is paying a price for its miserly tech spending. Disparate computer networks at hospitals, doctors' offices, and health insurers are incapable of sharing information. Highly trained, highly paid personnel spend significant portions of their days performing manual chores, such as writing by hand in case files and dictating case histories for transcription.
RAPIDLY RISING COSTS. The situation isn't only inefficient, it can also be fatal. In 1999, the Institutes of Medicine issued findings that from 44,000 to 98,000 deaths per year occur in the U.S. health-care system due to errors by physicians or other providers.
Worst of all, the soaring price tag for the creaky health-care system is growing far faster than the U.S. economy -- and becoming a potential drag on businesses burdened with rising costs. Over the past five years, annual health-care cost increases for U.S. employers averaged 11.5%, according to human resources consulting firm Hewitt Associates. In 2004, that's expected to hit 12.6%.
That's why hospitals such as Evanston Northwestern are receiving intense scrutiny, as the medical Establishment and U.S. regulators eye information technology as their best chance at cutting costs and saving lives. "It's actually embarrassing [that] we're practicing health care without the benefit of sophisticated information technology," says Blackford Middleton, director of clinical informatics at Boston hospital network Partners Healthcare Systems and a professor at Harvard Medical School.
WHO'S SAVING? The majority of insurance companies and other entities on the financial side of the medical sector use advanced info tech to run their businesses. But its use inside doctors' offices, nursing homes, hospitals, and clinics remains shockingly low.
Basic economics explains some of the disparity. Hospitals and other health-care institutions lack the necessary capital to invest in costly IT overhauls. And efficiency gains from IT usage don't add to the providers' revenues. Rather, insurers capture those gains, because they benefit from less costly care and services per subscriber. "The fundamental reason why health-care IT hasn't been adopted is there has been a misalignment of incentives," says Middleton.
It's no surprise, then, that less than 5% of hospitals in the U.S. have computerized physician order entry systems (CPOE), says Middleton. And less than 10% have replaced paper charts with electronic records systems, according to an October, 2003, report by the U.S. General Accounting Office.
MILITARY INITIATIVES. Middleton believes that better and broader use of IT could slice at least $130 billion off health-care costs annually. For many institutions, this will mean jump-starting IT investments that have lagged for decades. "Most of the nursing homes we work in don't even have Internet capability," explains Bob Chaput, IT director for Geriatrix, a Brentwood (Tenn.) company that sends nurse practitioners to convalescent homes to provide additional care for 2,000 institutional patients across three Southern states.
Slowly that's starting to change -- and ironically, the U.S. government has led the charge. President George W. Bush has mandated that all medical record keeping at the Defense Dept. and the Veterans Administration shift to paperless systems, a process that should be close to completion in 2005. To make this happen, the military has launched a new series of tech initiatives. That includes the Central Credentials & Quality Assurance System, an electronic repository that stores and manages personal information covering the 140,000 employees in the military health-care network.
"When a surgeon gets called up from reserves to go to Iraq, we can check right away what his readiness is," says U.S. Navy Captain Ben Long, program manager for the Resource Information Technology Program Office, the IT development arm for the U.S. military health system.
NEW INCENTIVE. A far more ambitious Bush Administration goal is to move all health-care records in the U.S. into an electronic format by 2014. That might prove difficult, but an increasing number of private-sector health-care organizations have begun to plan for or install new IT systems. They've been spurred on by a growing number of insurance companies that are willing to pay a premium to providers that digitize large chunks of their records, which allows insurers to process claims far more easily.
That's providing a new incentive for many hospitals and doctors to get with the IT program. In a February, 2003, survey of 287 health-care IT execs conducted by the Health Information Management & Systems Society, 68% of respondents said their operating budgets would increase in the next two years.
The bulk of this money will go toward four big-ticket items: CPOE, electronic medical records, clinical information systems used to manage and standardize disease treatment, and bar-code management of medication and laboratory samples. While installing these systems is expensive -- ranging into the millions and tens of millions of dollars -- the results are promising. An October, 2003, study by the General Accounting Office found that each of the 10 hospitals or health-care organizations it visited realized significant savings and improved patient care from advanced IT initiatives, with the annual savings ranging into millions of dollars.
QUICKER INSIGHTS. The ultimate promise of a digitized health-care system is not only better efficiency but improved service. Consider Evanston Northwestern. When a doctor there noticed one of his post-operative patients had extremely weak blood pressure, he adjusted her medications and realized the trouble probably came from a pain killer called Dilauid. Because all the medical records were in digital form, the doctor was able to quickly search other patient records for similar adverse reactions. He found evidence that Dilaudid was responsible for other instances of this problem and helped the hospital adjust its dosage recommendations accordingly.
That type of insight might never have come to light in the old days, says Neaman. What's more, it's only the beginning. Because it's easy for computers to strip personal information from electronic records, physicians, pharmaceutical companies, and researchers will gain an enormous body of information that will be ready to slice and dice.
That could mean faster warnings about side-effects from new drugs. Or it could allow epidemiologists to more quickly spot cancer clusters among people living near an abandoned chemical dump. "It becomes essentially data heaven. You can find millions of people with specific symptoms and have the statistical power to determine what's happening," says Middleton of Partners Healthcare Systems.
"A MATTER OF WILL." Of course, the new technology is only as good as the people using it. Neaman spent $5 million on staff training to prepare them for the transition to paperless records. And Evanston Northwestern required a minimum of 16 hours practice time before employees could go live on the new system. Still, while Evanston Northwestern is internally paperless, it resorts to printers when sending out bills and records to companies that can't accept them in electronic format.
"That has been our one big disappointment," Neaman says. "But we are envisioning a day when we can have online verification of benefits in real time and send all bills electronically" he says.
Now, Neaman says, the hospital wouldn't know how to go back to doing business the old way nor would it want to. He's betting that other health-care institutions will soon follow suit. "It's not a technology issue. It's more a matter of will," he says. That will has been a long time coming, but it finally appears to be gathering enough critical mass to propel the U.S. health-care system into the Information Age.
--------------------------------------------------------------------------------
By Alex Salkever, BusinessWeek Online Technology editor |
