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Feature Article
April 2004

Healthcare IT: A Means To Improved Effectiveness

Healthcare is an industry at the edge of a chasm. Spending on healthcare in the U.S. reached $1.4 trillion in 2002, is projected to increase to $2 trillion in 2008, growing to 14 percent of the GDP from roughly 11 percent in 2002. It will keep growing given the aging population and increased life expectancy, unless something changes. Information technology in healthcare is one means to an end of addressing the escalating costs, societal, and regulatory pressures and increasing consumer demands faced by the healthcare industry. For example, almost 100,000 people die each year in the U.S. due, at least in part, to medical errors, most preventable (that�s more than traffic death toll!); another 770,000 suffer some form of adverse drug reaction. Could IT help? We are all impacted if we do it right�. And if we do it wrong�?!?

Any visitor to the Centre for Global eHealth Innovation immediately gets the message of the importance of factoring in the end users (doctors, nurses, and hospital staff) into the application of IT. Located above the emergency ward of the Toronto General Hospital, the Centre is a joint initiative of the largest hospital group in Canada, and the University of Toronto. Its mandate is to facilitate adoption of information and communication technologies within the health system. One part of the Centre is the Multi-Tasking Simulation Laboratory (colloquially called a movie set), a flexible space designed to recreate real-world settings to test eHealth innovations. Using props, this space can be transformed into a range of health-related environments, including a hospital waiting room, a consultation room, a nursing station, an intensive care unit, an operating theatre, a classroom, or a home, and manned by nurses, doctors and medical specialists. The scope of the Centre is awesome covering everything from handheld and wearable computing to Telehealth, to biomedical devices and integration of clinical information systems, to international and cross-cultural aspects of eHealth innovation.


Six key business realities across the healthcare industry bring profound implications not only for users of the system and healthcare professionals, but also for network and information management technologists.

Business Reality #1. The portability, health information standards and privacy implications of the Health Insurance Portability and Accountability Act (HIPAA) in the US (and similar legislations elsewhere), change the rules of the game. HIPAA provides a minimum set of security standards to protect individually identifiable medical information. It also specifies a series of administrative, technical, and physical security procedures for covered entities to use to assure the confidentiality of protected electronic health information.

Business Reality #2. Medical errors carry high human and financial costs in the form of extended treatment periods and deaths and escalating punitive settlements and resulting costs of liability insurance. A 1999 Institute of Medicine report estimated that medical errors cost the U.S. approximately $37 billion/year, almost half preventable. An added impact of this problem is that, particularly in the U.S., medical malpractice underwriting losses are exploding, adding about 7 percent to the overall annual increase in healthcare expenditures.

Business Reality #3. Between 1970 and 1996, mandated processes have increased 25-fold. These mandates impact virtually every aspect of the operations of healthcare institutions, from access to health care and billing and fraud prevention, to prescription and treatment tracking, to crisis management procedures. Paperwork adds up to 50 percent nursing care and 100 percent emergency room overheads to the time spent for patient care. For example, the Department of Health and Human Services � the major federal regulator of hospitals � has defined Medicare and Medicaid rules and instructions in more than 130,000 pages. That�s three times the size of the IRS�s tax regulations!

Business Reality #4. Shortage and distribution of skilled professionals is leading to delayed or sub-optimal care. While shortages need to be addressed, better utilization of current resources is a key imperative. A number of factors exacerbate the ability of healthcare institutions at the system level to deliver their services to their clients. For example, medical experts are a large investment by the healthcare institution (e.g., the total cost of having one radiologist is $800,000!) and represent a resource that needs to be effectively utilized. Keeping track of these critical resources, travel time between facilities and ineffective communications are all challenges that impact the quality and cost of patient care.

Business Reality #5. Patient relationships need to leverage knowledge of the patient�s entire medical history, whether based on face-to-face interactions or across electronic channels. Consumers are demanding �high-tech� and �high-touch� services to manage their healthcare needs, and want a range of options for accessing medical experts, including face-to-face, via the Web, and via the telephone. Already, a significant number of consumers go online to look for information on health-related topics. Dubbed �cyberchondriacs,� the U.S. numbers have grown from 54 million in 1998 to 110 million in 2002. As a result, 43 percent of respondents are willing to select their doctor based on the availability of Internet systems, and 45 percent are willing to select their health plan based on this.

Business Reality #6. Finally, healthcare CIO�s are under constant pressure to do more with less � to constantly develop more proactive information and networking management models to enhance healthcare delivery. Unfortunately, in many cases, the ability of IT to impact the quality of healthcare delivery is not well understood in the general medical community. Consequently, healthcare IT as a percentage of an institution�s operating budget (1.8 to 5 percent in North America) is generally lower than that of other information-intensive industries.


IT is not a panacea given the political, governmental and socio-economic dimensions of healthcare delivery. However, healthcare IT executives are responding to the above realities in a number of ways. Healthcare institutions of all sizes are targeting to re-engineer healthcare delivery by developing and integrating a range of applications (e.g., patient flow, physician order entry, billing and claims processing, and other clinical, operational, and financial systems), centered around Computerized Patient Records and PACS (Picture Archiving and Communications System). This re-engineering makes all patient, clinical, pharmaceutical, and corporate data readily available to users and applications that need them. Extending these capabilities to the Point of Care is a common thrust across the industry, providing patient, diagnostic, and medication input and verification. While wired solutions can go a long way towards addressing these Point of Care needs, mobile solutions based on structured and secure wireless LANs with enterprise-wide roaming are a key technology in making physicians and nurses more efficient, reducing errors, and contributing to better patient care. Extending clinical, financial, and administrative processes to PDAs and tablet PCs right at the Point of Care opens up significant opportunities to get relevant treatment and medical history information where it is needed. These systems recognize that physicians and nurses are busy professionals, that time with each patient is limited, and that quality care demands that necessary data be immediately available. This also minimizes the human and financial impacts of entry errors, especially when such systems are linked to decision support systems to provide treatment options and detection of latent errors before they become patient-effecting errors.

Point of Care solutions have to be part of the multi-layer security being embedded across the IT infrastructure as an important step to protecting client information and meeting privacy requirements. These need to be designed for business continuity on a highly robust networking infrastructure, protecting medical information and recovering from disasters quickly. Point of Care solutions are also part of a thrust of making healthcare delivery more virtual and collaborative, leveraging resources wherever they may be and however they are connected. Virtual private networking, IP telephony, and video streaming technology are important enablers to make this happen.

In the longer term, location tracking and location-based services, integration with smart agents to search out information required by the physician, and automated database searches or even artificial intelligence to advise physicians of possible medical risks (e.g., undesirable drug interactions) are but a few examples of technologies that will further enhance Point of Care solutions.

As IT professionals, citizens, and healthcare consumers, it behooves all of us to be opinionated on the role of IT in healthcare delivery. The new healthcare model leverages technology from back office to networked clinical devices to the point of care and even to the home, and responds to the business realities discussed earlier. But success will only come if these developments are tightly matched to the needs of doctors, nurses and healthcare professionals. c

Tony Rybczynski is Director of Strategic Enterprise Technologies at Nortel Networks. He has over 30 years experience in the application of packet network technology. For more information, please visit www.nortelnetworks.com.

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