Health Care IT Helps Patients, Saves Money

Published on October 23, 2009

Information technology is shining a light on problems in the health care industry, leading to healthier patients and an economically healthier medical system, said Michelle Roseman, ’03, general manager, Midwest academic and children’s organizations, for Cerner Corporation.

“It’s not about the technology, it’s about the analytics — what you do with that data and how you change the way you drive care, now that you have access to better information at the right time,” said Roseman, a panelist at the annual conference sponsored by the student-led Healthcare Group on October 23 at Harper Center.

IT encompasses automation, from registration and scheduling to ordering procedures and examining results, to billing and patient accounting, Roseman said. “It is about automating the workflow and transforming how we deliver care.”

The health care IT industry amounts to about a $30 billion a year, about $17 billion of it in software applications, said Jay Istvan, a partner with Bain & Company. Economic benefits include avoiding adverse effects, reducing ineffective treatment, and offering better, faster care, which means patients can go back to work quicker.

Health care will reap productivity gains similar to what other industries have experienced when fueled by IT, Istvan said.

Roseman described how IT benefitted one hospital in Michigan. The federal Centers for Medicaid and Medicare Services created “never events,” mistakes or occurrences for which hospitals won’t be reimbursed. If a patient develops a pressure ulcer while in the hospital, the hospital can’t collect for treatment, for example. Roseman said her firm changed how the Michigan hospital uses information from point of patient arrival throughout the patient’s stay.

“Before we did this, it took 2.6 days for the patient to start being treated for this pressure ulcer. After we implemented this new use of the data, it was down to 0.3 days. So that’s one hospital, that’s $2.6 million in reimbursement that would have gone away, because this went into effect October 1, 2008. So that’s real dollars and that’s real care.”

Subhead: IT improvements come at a cost

“It is expensive, I’ll be the first to admit,” Roseman said. “You have to understand the benefits. It’s a lot easier to show a pretty new building and garden then it is to show data on pressure ulcers.”

Daniel Pelino, general manager, global health care and life sciences for IBM Corporation, said collaborative care models can save states money. He pointed to a team-care outreach model created to keep asthmatics out of the emergency room in North Carolina across a population of 750,000, or about 15 percent of the state’s total population. Teams called patients or their families to ensure the patient was continuing to take medication, a process that saved the state $150 million.

Pelino said collaborative care models will enable doctors to become more efficient. This will result in hospital consolidations, and those that exhibit poor performances will fallby the wayside.

Cost savings within the industry also will come from eliminating fraud and abuse, Pelino said. Over ten years, $157 billion in health care costs could be saved by just tackling that issue alone, he said.

Innovation within health care IT will come from companies whose products adhere to standards of larger companies, Pelino said, and many start-ups won’t have the money to compete. “A lot of VC companies are willing to fund some of these ideas, but they have to be within the standards of workflows and processes” of companies that offer integrative delivery systems, Pelino said, or “they’re not going to get any play.”

Istvan said in the med-tech industry, about 90 percent of innovation comes from start-ups, and in the pharmaceutical industry, about 60 percent. In contrast, he put health care IT at the far end of the spectrum. “It’s just much, much harder for a brilliant idea to succeed commercially from a start-up perspective,” he said.

Will Long, first-year student in the Full-Time MBA Program, said the panel offered a “great overview” of health care IT, especially regarding “the two most important issues in health care, which are marketing new products and innovation from a pharmaceutical and biotech standpoint, and also taking costs out of the system from an information technology standpoint.”

                                                                                                                        — Mary Sue Penn

 Read about the conference keynote speaker Eric Larson, ’87, on the need for Americans to make healthier lifestyle choices »