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Why healthcare IT spending needs to shift its focus

Brian Eastwood | July 9, 2014
Large healthcare organizations spend millions annually on IT. Most of it pays for technology that moves or stores data. That's been especially true in the last five years, as meaningful use has triggered significant investment in electronic health record (EHR) technology.

Large healthcare organizations spend millions annually on IT. Most of it pays for technology that moves or stores data. That's been especially true in the last five years, as meaningful use has triggered significant investment in electronic health record (EHR) technology.

Little of that capital spending adds value, though. Healthcare IT implementation has occurred where frustration is highest but the benefit is lowest, says Dr. David Levin, chief medical information officer (CMIO) with the Cleveland Clinic Health System. For transformation to occur, the opposite must be true.

Levin and several other speakers at the recent Institute for Health Technology Transformation (iHT2) Health IT Summit Chicago addressed the interconnected issues of healthcare IT spending, evolving business models and the types of innovation that can succeed in such an embattled industry.

ACA, Meaningful Use Aren't Disrupting Healthcare

Healthcare consumers aren't afraid of innovation, says Scott Lundstrom, group vice president at IDC Health Insights, citing the increasing numbers of patients who bypass primary care physicians for retailers such as CVS or Walmart when they need to treat minor ailments.

On the other hand, healthcare organizations struggle with disruptive innovation. That means shaking up the status quo, one which has made a lot of money for a lot of hospitals for a long time. What's more, Lundstrom says, the Affordable Care Act isn't shaking things up as some had hoped, and meaningful use isn't fixing anything.

As Lundstrom sees it, six factors drive the real disruptions in healthcare:

  • Industrialization, which tends to hit industries in 20-year cycles. It happened to manufacturing, and it's happening in healthcare.
  • Changing business models, which will integrate clinical, financial and patient data to focus on wellness and, in the process, cause a lot of hospitals to fail.
  • Consumer-facing technology, a market that Google, Apple, Samsung and WebMD each aim to conquer. Connecting to and collaborating with patients may frustrate doctors, Lundstrom says, but they must understand that the money they don't spend on doing so will fall to the bottom line.
  • Organizational changes, which increasingly add IT hires with governance and management skills.
  • New roles in care delivery, which (given that focus on wellness) may involve a "referral" to the gym instead of the doctor. Lundstrom's warning to skeptical healthcare leaders: If you aren't willing to adapt to this role, to spend a little to save a lot, rest assured that your new owners will be.
  • New IT architecture options, which mean embracing agility, trusting the cloud and decommissioning all those apps that only a handful of employees still use. Providers must use analytics to turn IT inside out; critically, Lundstrom says, they can't rely on one single EHR system for this purpose.

 

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