Healthcare information technology shows no quantifiable ROI (return on investment). This is not simply because people don’t measure ROI – many research studies objectively have shown IT to have none to poor impact on healthcare metrics. It is such a massive problem that the National Institutes of Health (NIH) recently poured out millions of dollars to fund projects that may potentially show quantifiable value. Some studies show benefits of IT (i.e. electronic medical record) if its use is projected out several years into the future. This is not the time horizon hospitals are interested in – they want quantifiable results in weeks to months. Existing vendors offer “data” which turns out to be nothing more than anecdotal information or case studies – it cannot withstand rigorous analysis. If vendors focus on measures at all, they only focus on a small subset of measures that hospitals are looking to improve. This practice leads to different applications for different classes of measures in the hospital (e.g. financial systems versus clinical systems) -- all of which are poorly integrated. Hospitals are keenly aware that all ROI measures are ultimately linked and impact each other, but there is no company that takes a holistic systems-level approach to improving hospitals in an objective manner.
Platform-specific characteristics exacerbate the
ROI problem. That the existing platform
(i.e. electronic medical record [EMR]) has enormous negative
impact on provider (e.g. doctors, nurses) workflow makes
this ROI problem worse. Ultimately one cannot have
any impact on ROI if one cannot get users to use the system. This
negative impact is extremely common and in many cases has
caused physician uproar; hospitals have often had to completely
remove the installed system (e.g. Cedar-Sinai Medical Center’s
removal of a $34 million system three months after it was
installed). In
some cases, the impact on workflow can worsen patient safety
(i.e. increased medication errors).
Finally, there are no standards defining what data or applications belong in the EMR; each hospital has its own collage of applications that it collectively defines as an “EMR”. Potentially there are 5,000 (the number of hospitals in the US) different combinations of EMR infrastructures in the US alone. Such lack of standards prevents the ability to begin research (e.g. benchmarking and comparisons) on how applications can impact ROI. Because of that inability to extract tangible value from existing IT infrastructure, hospitals hesitate in simply continuing to add applications. These problems have limited IT penetration into healthcare: Gartner estimates penetration into US hospitals is approximately 10%, and in sub-sectors like the ED (7%) and outpatient clinics (5%) is even less.
However, hospitals have recently accelerated spending on IT. In our own backyard three large hospital systems (Catholic Healthcare West, Sutter Health, and Kaiser Permanente) have already allocated close to or over $1billion to IT. Kaiser Permanente is in fact spending over $3 billion. Why? They are being pressured by the convergence of overwhelming drivers. The strongest driver at this point is the interest to improve patient safety. Other examples of drivers that have become stronger include the federal government’s increased involvement (e.g. increased funding, created standards, and increased reimbursement for use of IT), pay-for-performance incentives (hospitals get higher reimbursement for using IT), and staffing shortages. IT is seen as the logical solution for most of these problems. However, CEOs of hospitals still are still very uncomfortable with this spending because the ROI problem has yet to be solved. For hospitals, IT has now become a reactive “cost of doing business” -- not a proactive strategy that improves patient care and institutional viability. |
