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Wednesday, April 09, 2008

A Valuable Analysis of the Blocks and Barriers to Heath IT

The following research paper appeared a week or so ago.

Healthcare IT - Time to Shift Into Second Gear…

Date Published: 28 Mar 2008

By Konstantinos Nikolopoulos, Industry Analyst, Healthcare – IT

Email: konstantinos.nikolopoulos@frost.com

It is widely documented that the health care industry has been slow in the adoption of IT and is well behind other industries, such as financial services and telecommunications. The lower level of IT investment and automation has resulted in an industry that continues to rely heavily on paper and manual processes. This lack of automation is seen as one of the key reasons for the increasing inefficiency and quality problems. It is not surprising, therefore, the widespread certainty that a greater adoption of Healthcare IT represents an important element of fixing health care's problems. This piece will highlight the main factors that have served as a barrier to more widespread adoption of Healthcare Information Technologies and discuss why it is time we shift into second gear.


Typically most health care industry participants cannot be classified as being capital rich. Hospitals typically operate at operating profit margins of 5% or less and in the physician market capital is also tight as this segment has characteristics of small business. Private organizations might have a higher degree of access to capital and given the nature of their business are more likely to invest significantly in technology. Also, there is a lot of competition for the capital as IT investments often face challenges going up against other capital investments, such as new facilities and medical equipment.

Uncertain ROI

As with many technology purchase decisions, Return-on-Investment for Healthcare IT solutions can be difficult to quantify both in terms of time and magnitude. Clinical applications (such as electronic medical record systems) typically face more of an ROI challenge relative to financial/administrative applications in which financial benefits such as improved collections and/or reduced costs are more easily quantified.

Apparent Divide Between who Pays and who Benefits

This is most relevant for physician adoption of clinical IT solutions. The key issue revolves around the fact that while physicians are the ones that suffer most or all part of the investment, many of the benefits accrue to other stakeholders, including payers and employers. In addition, most healthcare systems today remain largely based on quantity (number of patient visits, procedures, etc.) with little regard for quality.

More here:


The article goes on to address a range of other issues including:

  • Work-flow disruption
  • Technology Complex and Expensive
  • Security, Transparency and Privacy Issues
  • Lack of standards

The article concludes with a strong suggestion that the time to lift the tempo has well and truly come.

Really well worth a read and distribution to you more skeptical colleagues.


1 comment:

Anonymous said...

Well - it's not the people on the ground who under-invest. It's the policy makers and program implementers who cannot see that their chronic indecision-making has left the legacy of risk-taker to the front-line troops. These are the people who have the vision and the will (and nous) to act with mission- ary zeal to implement. When we have no vision, no strategy, and no framework for investment - why should we wonder about the level of frustration about under achievement - it's all about leadership and the willingness to engage with risk - just where are they in our National Federated System? Quite sad really!!