To witness the paradox of health care technology, take a stroll down the hallway of any hospital or medical centre.

The contrast could hardly be starker. Wander through many an Australian hospital or medical centre and you'll see clinical examination rooms and theatres chock-full of state-of-the-art diagnostic and surgical equipment. You'll also see clinicians struggling to access clinical and dietary information - not to mention patient data - and clerks battling antiquated IT systems. If you manage to see a hospital-wide, enterprise-wide or area health service-wide application, you'll be viewing a rarity. For the Australian health care sector, IT has never been a priority. When Collaborative Health Informatics Centre (CHIC), a not-for-profit organisation set up to make it easier for IT companies and the health care industry to do business with each other, conducted its initial survey of the Australian IT&T health market in 1999, the picture of both supply (IT&T vendors) and demand (health care organisations) could only be described as depressing.

"E-Health: An Exploratory Study of Health IT in Australia and New Zealand", was the first comprehensive snapshot of the IT spend in the nation's health sector. It revealed local health care providers seriously trailing their overseas counterparts in IT investment. The sector was spending just 1.5 per cent of total expenditure on IT at a time when the finance and banking sector was spending more than 9 per cent of their annual operating budgets on IT. The health sector was therefore way down at the bottom of the spending pile. Not only was growth in the sector being stifled by poor investment by health care providers, executives had so little appreciation of the strategic value of IT that some observers were claiming patient care was in danger of being badly compromised. For instance, Douglas Barnard, the business development manager for Australian HealthSolve, a specialist medical software company, claimed Australia's high rate of medical errors - at three to four times that of the US, one of the highest in the Western world - could be directly blamed on the health care profession's reluctance to invest in information technology. "There is a direct correlation between IT spending and medical error rates," he said in an April 2000 press release.

Barnard's comments followed an earlier call by South Australia's Human Services Minister Dean Brown for the introduction of legislation to mandate medical standards and procedures in reaction to another study suggesting about 16 per cent of hospital admissions result in "adverse effects", including permanent disability or death. Barnard used the figures to claim a greater IT focus throughout the Australian health system would enable clinicians to utilise an evidence-based medicine (EBM) approach and to monitor various treatment protocols for specific diagnoses. "As we all know, health care is not an exact science because of the diversity of treatment protocols for every type of diagnosis," he said in the release. "However, by using the right technology to capture a broad range of practice protocols for a specific diagnosis, you can compare outcomes and results and make informed decisions about the most appropriate protocols for a specific diagnosis. "If you manage on that basis, you significantly increase the quality of health care, reduce costs and improve medical error rates, although human error will always play a part," he said.

Australia has been negligent in doing all three. While things are changing, it is only slowly. For instance, the 1999 CHIC report concluded health organisations had to deal with the dramatic IT under-spending that occurred from the early to mid-1990s. It urged health organisations and IT companies to collaborate and "risk-share" product development and system initiatives. "Only when all participants in the health IT sector are able to work together will an increase in the uptake of IT occur and better health outcomes be achieved," the report's foreword concluded. The survey found that as health care organisations moved from being organisation-centric to more patient/customer-centric there was a concomitant requirement to increase operating efficiencies and decrease operating costs. At the same time, IT spending was moving from an ad hoc, discretionary spend to a more strategic, enterprise-wide solutions spend. It cited change management and business process issues as significant health IT challenges, finding IT increasingly being relied upon as the tool to reduce costs and improve efficiencies based around the review and change of business processes.

However, the survey also noted difficulties in attracting and retaining appropriately skilled IT staff. CHIC CEO Anne McGill says the perception was, and remains, that remuneration for IT staff in the health sector is below market rates. Around 20 to 25 per cent of IT staffing budgets is spent on outsourced or contract staff. This percentage is expected to increase. In addition, health care providers had a real problem demonstrating the value of IT in an environment with static budgets and a need to reduce costs and increase efficiencies continues to be a challenge. But the situation is improving - if only slightly.