September 27, 2009, 8:51 PM — Health care is suddenly an information technology hotbed, thanks to the $787 billion federal stimulus package. President Obama wants hospitals and doctors' offices to computerize medical information to cut waste and curtail the mistakes that cost billions of dollars and thousands of lives every year.
In return, those healthcare entities that use IT to fix ingrained problems can reach into a $50 billion pot over the next five years, starting with $19 billion available in 2011. Laggards who don't install effective IT will face daunting financial penalties come 2015, in the form of a 1 percent cut in Medicare payouts. That escalates to a 3 percent cut by 2017. While they spend, hire and try to anticipate what standards Obama will devise to qualify for stimulus funds, healthcare CIOs must also fend off vendors with dollar signs flashing in their eyes.
"We're getting cold calls from every electronic medical record vendor out there," says Paul Contino, vice president of IT at Mount Sinai Medical Center. Among vendors and consultants, he adds, "it's a feeding frenzy." Even Wal-Mart is in the fray, offering a $25,000 bundle of eClinicalWorks software on Dell hardware at Sam's Club warehouses.
We're willing to bet most CIOs don't procure their IT at Sam's Club, but there's plenty else to make you wary. Many products are immature, and the intended users of these new systems range from eager to inexperienced to entrenched in the way they've nursed and doctored for decades.
To read more on this topic, see: Microsoft Buys Software for Amalga E-Health Platform and The Long Road to E-Health Records.
Yet healthcare CIOs are busy growing strong C-level partnerships for their digital efforts, even amid these conditions of pressing deadlines, uncharted financial risks and rabid vendors angling for a piece of the action. The rest of the CIO community can steal some good ideas from their healthcare colleagues as they obtain project buy-in from business executives and set the kind of aggressive goals a whole company can rally behind.
The Ghost of ERP Failures Past
Final, precise criteria for what healthcare CIOs have to do to obtain stimulus money won't be out until the end of this year. But if they hope to make Obama's deadlines, CIOs must push ahead with core systems such as electronic medical records (EMRs). As a result, healthcare IT operating budgets are up 4.7 percent this year compared with those of 2008, according to a survey of 200 IT executives by research firm Computer Economics. In comparison, across other industries, the numbers are flat. Healthcare hiring has jumped, too. While 46 percent of IT organizations overall have cut staff this year, 27 percent of healthcare organizations are adding technology positions.