Saving Money, Saving Lives

Saving Money, Saving Lives

A Special Two-Part Report on IT & Health Care | Part 2: Paperless Medicine Health-care CIOs face intense pressure to install electronic medical records and order-entry systems, in spite of physician resistance and large up-front costs. Here's how early adopters are overcoming the obstacles.

On a gritty Boooklyn block cluttered with automobile body shops, a janitorial supplies outlet and a truck depot for Gino's Italian Ice sits a one-storey building with corrugated metal siding the colour of pistachio ice cream. It's an unlikely setting for a hospital IT department and an even unlikelier setting for a revolution in American health care. Yet inside, that's precisely what's going on.

Ten blocks from the 705-bed Maimonides Medical Centre, senior vice president and CIO Ann Sullivan has finished a $US44 million technology transformation that in seven years has taken the hospital from punched cards to a sophisticated system of electronic medical records (EMR) and computerised physician order-entry (CPOE).

Today, every one of Maimonides's doctors - not only its 277 employed physicians but also 978 community physicians with hospital privileges - log on to order medications and tests, check lab results, and track treatment. One in every five prescriptions is flagged by the system for a possible problem - an allergy or an adverse drug interaction. The average turnaround time for administering medicine to inpatients now has been cut from five hours to 90 minutes. Physicians receive all reports online from the radiology department within 24 hours (formerly, it was five days), and they no longer have to reorder tests for the estimated 15 per cent of film records that used to get lost. Last year, revenue increased $US50 million, and hospital officials attribute a fourth of that jump in revenue to the new IT systems. In addition, the annual cost of the hospital's malpractice insurance just dropped $US1 million, a savings largely credited to the new systems.

Advanced systems like these could reduce US hospitalisation costs by $US2 billion a year. And if similar systems were used in doctors' offices and clinics as well as hospitals, they could prevent thousands of deaths from medical errors and save the US health-care system a whopping $US44 billion each year - taking a significant bite out of the $US1.4 trillion America annually spends on health care. Health-care costs, which in 2001 constituted 14 per cent of the gross domestic product, continue to soar, slicing into business profits and exacerbating state and federal deficits. An increasing number of employers are cutting back on health coverage or offering none at all. The enormous efficiencies of electronic medicine could ameliorate this deepening crisis.

The good news is that this push toward paperless medicine seems inevitable. In the US, insurance companies have begun rewarding physicians and hospitals for using IT to reduce errors. And a 2002 survey found that 46 per cent of physician executives work for organisations that have invested in EMRs or plan to do so in the next year - more than double the number reported in 2001.

The bad news is that there's still enormous resistance to these systems. At present, Maimonides Medical Centre is among only 10 per cent of US hospitals that have implemented inpatient order-entry systems that check for errors. Most health-care entities are moving much more slowly, both because of the tremendous up-front costs (Maimonides has been spending one-third of its capital expenditures on IT) and resistance from physicians who see no reason for changing the way they practise.

CIOs are at the centre of this tug-of-war. They're the ones who must drive this transformation, delivering systems without incurring dangerous downtime or allowing medical files to fall into the wrong hands.

"The pressures in health care are such that in the next two or three years we're going to have to achieve a new level of efficiency," says David Pecoraro, vice president and CIO of the Jewish Hospital HealthCare Services, which has installed systems similar to those at Maimonides.

"CIOs are feeling the heat."

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