1/9/2015

TheDigitalHospitalBusinessweek

BloombergBusinessweek

Magazine
http://www.businessweek.com/stories/20050327/thedigitalhospital

TheDigitalHospital
March27,2005
PeterA.Grosshasbeenadoctorfor40years,risinguptherankstobecomethechairmanofinternal
medicineatHackensackUniversityMedicalCenterinHackensack,N.J.Butonedaythiswinter,a
homelessmancheckedintothehospitalwithHIV,andGrossmadeadecisionthatcouldhave
seriouslyharmedhispatient.HechosetogivethepatientanHIVdrug,tappingarequestintoa
hospitalcomputerandzappingitofftothetwoyearolddigitaldrugorderentrysystem.Moments
laterhegotbackamessageheneverwouldhavereceivedbeforethesystemwasinplace:awarning
thatthedrugcouldmixdangerouslywithanantidepressantthepatientwasalreadytaking.Grossgot
onthephonetofigureouttheproblem,eventuallyaskingtheman'spsychiatristtoreducethedosage
ofhisantidepressant."There'snowayIwouldhavepickedthatup,"Grosssays."Itwastotally
unexpected."
Sceneslikethisareunfoldingacrossthecountry,providingaglimpseintothepotentialofinformation
technologytotransformthehealthcareindustry.Hackensackisoneofthenation'smostaggressive
techadopters.Millionsofdollarsininvestmentshavepaidforprojectswellbeyondtheonlinedrug
systemthattippedoffGross.DoctorscantapaninternalWebsitetoexamineXraysfromaPC
anywhere.Patientscanuse37inchplasmaTVsintheirroomstosurftheNetforinformationabout
theirmedicalconditions.There'sevenalifesizerobot,Mr.Rounder,thatdoctorscancontrolfrom
theirlaptopsathome.Theydirectthedigitaldoc,completewithwhitelabcoatandstethoscope,into
hospitalroomsandusetwowayvideotodiscusspatients'conditions.
Whimsical?Maybe,butHackensack'sresultsareperfectlyserious.Patientmortalityratesaredown.
Qualityofcareisup.Atthesametime,productivityisrising.Whiletheseareearlydaysandplentyof
hurdlesremain,thehospitalhasnodoubtsthatitstechnologyinvestmentsaremakingthedifference.
"Wecouldneverbecomeatophospitalunlessweweretopsintech,"saysJohnP.Ferguson,the
hospital'schiefexecutive.
Isthisthehealthcareindustry'sfuture?Itwouldbeastartlingreversal.Foryearshealthcarehas
missedoutonthehugebenefitsthatinformationtechnologyhasbestowedupontherestofthe
economy.HospitalswerenotonlycheapskateswhenitcametoinvestingincomputersandWeb
technologiesbutalsohadaknackforwastingthemoneytheydidspend.Duringthe1990s,
productivityinhealthcareservicesdeclined,accordingtoestimatesfromEconomy.comInc.That'sa
hugeunderachievementinadecadeofstronggainsfortheoveralleconomy.
Allofthatmaybebeginningtochange.HospitalssuchasHackensack,alongwithinsurersandthe
government,aresteppinguptheirinvestmentsintechnology.Forhospitals,there'smoremotivation
thanever:Thegovernmentandprivateinsurersarebeginningtopayhospitalsmoreforhigherquality
careandtheonlywaytomeasurequality,andthenimproveit,iswithmoreinformationtechnology.
Hospitalspendingonsuchgearisexpectedtoclimbto$30.5billionnextyear,from$25.8billionin
2004,accordingtoresearcherDorenfestGroup.
Dollarsaredandy.Evenmoreimportant,though,hospitalsfinallyseemtobefiguringouthowto
maketheirtechinvestmentspayoff.Clumsy,sluggishfirstgenerationsystemshavebeentossedout.
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Hospitalsarelisteningtodoctorsandnursesandinstallinglaptops,software,andNettechnologies
finetunedtotherhythmsoftheirwork.Theresultsarebeginningtoshowupinnationalstatistics:
Economy.comfiguresthathealthcareservicesproductivityhasrisenabout2%annuallysince2001,
albeitataslowerpacethantheoveralleconomy.
Suchmeasurementsinhealthcarearemoreartthanscience.Inothersectors,productivityismeasured
asoutputdividedbyhoursworked.Buthealthcareoutputistoughtomeasure.Youcancalculatehow
manyworkerhoursittakestodeliveraonedayhospitalstay.Butthere'snoconsensusonhowto
measurewhetherthequalityofthatcareisbetterorworsethaninthepast.That'swhythefederal
governmentpunts,decliningtoputoutaproductivitystatforhealthcare.Economy.commeasures
productionandworkerhourswithoutadjustingforqualityofcare.Othereconomiststakeissuewith
thatcalculation.Butevenifit'sjustdirectionallycorrect,itmeansthataftermanysluggishyears,
Hackensackandotherinstitutionsaredeliveringhospitalstays,Xrays,andthelikemoreefficiently.
RefiningtheSoftware
Isthisthebeginningofaseachangeorafalsestart?Thatquestionisbeinghotlydebated.Skeptics
abound.Mostrecently,ahighprofilestudypublishedintheJournaloftheAmericanMedical
AssociationinearlyMarchshowedthatatechsystemusedbytheUniversityofPennsylvania's
hospitaltoprescribedrugscreatednewwaystomakeerrors.Why?Inoneexample,itscattered
patientdataanddrugorderingformsoversomanydifferentcomputerwindowsthatitincreasedthe
likelihoodofdoctorsorderingthewrongmedications."Hospitalsneedtomakethesystemsworkwith
thewaymedicineispracticed,"saysRossKoppel,thestudy'sleadauthorandaprofessoratthe
UniversityofPennsylvania.
ButtheexperiencesofHackensackandotherhospitalsnationwidesuggestthathealthcarereallyis
makingitswayintotheDigitalAge.Hackensackhassuccessfullyputinplaceanelectronic
prescriptiondrugsystem.TheNewJerseyhospital,however,hasspentlonghoursrefiningits
softwaretoeliminatemanyofthepotentialpitfallscitedintheUniversityofPennsylvaniastudy.Such
techworkhashelpedboostHackensack'soperatingmargins,to3.1%lastyearfrom1.2%in2000.
Thestakescouldn'tbehigher.Healthcareaccountsfor15%oftheU.S.economy,or$1.7trillion.It's
sogargantuanthatanyefficiencygainsmakeanimpactontheoveralleconomy.Dr.DavidJ.Brailer,
PresidentGeorgeW.Bush'spointmanonhealthinformationtechnologyinitiatives,predictsthattech
investmentscouldleadto$140billionayearincostsavingsby2014,oranestimated6%ofhealth
carespendinginthatyear."Iactuallythinkthat'sconservative,"saysBrailer."There'sabodyof
literaturethatshowscasestudieswithmuchlargersavings."
Moreimportantthansavingmoney,ofcourse,issavinglives.Poorinformationkillssome7,000
Americanseachyearjustbymissingdruginteractionproblems,accordingtotheNationalAcademy
ofSciencesInstituteofMedicine.Alltogether,hospitalerrorsresultinupto98,000deathsannually.
Earlyevidenceindicatesthatpropertechnologycanreducethetoll.Hospitalsthathavebegunusing
electronicprescriptionsystemshaveseenupto80%fewerprescriptionerrors.AndatHackensack,
patientmortalityhasdroppedby16%overthepastfouryears,inpartbecauseofitsdigitalinitiatives.
Whilehospitalshavealwaysbeendevotedtosavinglives,they'returningtotechnowbecauseofa
fundamentalchangeinU.S.healthcare.Payforperformance,thatcentraltenetofCorporateAmerica,
ismakingitswayintotheworldofhealthcare.Medicareisleadingtheway.Itsetupatrialwith277
hospitalsinwhichit'spayingjuicierfeesforhighqualityresultsinfivetreatmentareas."We'retrying
tocreatethebusinesscaseformorecoordinated,efficientcare,andinevitablythatmeansmore
investmentintech,"saysDr.MarkMcClellan,theheadofMedicare.
It'squiteastart.Medicare'strialsuggestsbetterinformationcanleadtobettercare.Theevidence?
Sincethe277hospitalsbegangatheringperformancedataandenteringthespotlightofbeingpublicly
measuredagainsttheirpeers,theaveragequalityofcarescoreshaveincreased6%."Thisgave
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hospitalsachancetoseeifpublicmeasurementandincentiveswouldletthemimprove,andithas,"
saysStephanieAlexander,seniorvicepresidentatPremierInc.,aresearchcoopof1,500hospitals
thathelpsruntheMedicarestudy.
Privatehealthinsurersaremovingtowardpayforperformance,too.Overthepasttwoyears,
WellPointInc.,UnitedHealthGroup,andmanyotherinsurancecompanieshavebegunratinghospital
treatmentsandrewardinghighqualitycare.Here'showittypicallyworks:Ahospitalgetsafixedup
frontfeefor,say,aheartbypass.Ifthehospitalscoreshighonqualityforbypasses,itwillgetabonus
ontopofthatfee,usually1%to4%.
Sowhynotjumpinwithbothfeet?Hospitalshavefinancialconstraintsontheirabilitytopurchase
technology.Therearecompetingdemands.Andwhilemosthospitalscanissuedebt,theytypically
onlydosoforbigticketitems,suchasanewbuilding.Fortechinvestments,hospitalspayforwhat
theycanoutofcashflow.Andcashisn'teasytocomebythesedays.Thenation's5,760hospitals
haveseenaverageprofitmarginsfallforeightyears,accordingtotheAmericanHospitalAssn.
HackensackisacasestudyfortheU.S.healthcaresystemasitnavigatestheseissuesintheyears
ahead.Itisn'tadeeppocketedacademichospitalwiththebudgettodothingsfewotherscan.It'sa
communityhospital,ninemilesfromNewYorkCity,thatsymbolizesthechallengesconfrontinglocal
hospitalsaroundthecountry.Togetafirsthandlookatthisfuture,twoBusinessWeekreporterswent
onroundswithdoctorsandnursesatHackensack,satinonstaffmeetings,andtalkedwithpatients
abouttheirexperiences.
ThemostimportantpieceofHackensack'sdigitalinitiativesisthenetworkedsoftwarethatactsasthe
hospital'scentralnervoussystem.Nursesusewirelesslaptopsonwheelstologintothissystemto
recordpatients'symptomsandgetalltheinformationtheyneedtoshuttlepatientsthroughtheirstay.
DoctorstapintothenetworkviawirelesslaptopsorPCstoorderprescriptionsandlabtests.
Everythingelseislinkedintothesystem,fromtheautomatedpharmacytotheXrayroom,
eliminatingtheneedformostfaxes,phonecalls,andotheradministrativehassles.
EvenMr.Rounderishookedin.Asdoctorsusetherobotto"visit"patients,theycanzipoffrequests
torefilldrugordersorrunlabtestsfromaseparatewindowontheircomputerscreens.Therobothas
provenitsworth.WhenablizzardstrandedDr.GarthBallantyneathome,82milesfromthehospital,
hefiredupMr.Rounder."Iwouldn'thavebeenabletodriveheretoseemypatientsthatday,"the
surgeonsays.
Still,thepicturethatemergedofHackensack'sexperienceiscomplex.Theinstitutionhaspoured$72
millionintoITprojectssince1998,andthetechnologyclearlyishelpingbothproductivityandquality
ofcare.It'soneoftwohospitalsintheMedicarepayforperformancetestgroupthathasscoredinthe
top10%forfourofthefivecategoriesMedicareistrackinginheartfailure,cardiacbypass,heart
attack,andpneumonia.YetHackensackhasalongwaytogobeforeitrealizesthefullpotentialofits
digitalinitiatives.Onesignofthedistancetotravel:Only10%oftestsandordersareentered
electronically.
Hackensackoffersclearlessonsforotherhospitals.Makingtechnologypaytakestime.Itcanbe
severalyearsbeforetheresultsofinitiativesbegintosurface.Justasimportant,makingthe
technologyworkwelltakesahugeamountofeffort.Hackensack'scentralsoftwaresystemis
constantlybeingtweakedtoensurethatit'swovenintotheroutineofthemedicalstaff.
Mostimportant,doctorsremainthekeytohospitals'success.Wooingthemisanextremelydelicate
task.Only7%ofdoctorsactuallyworkforhospitals.Theothersareessentiallyindependentoperators
whoarenotrequiredtodowhathospitaladministratorswant.Manyarewaryofgadgetsthattake
extratimeorinterferewiththeirwork.Buttheyaren'tLuddites.Mostarewillingtoexperimentwith
newtechnology.
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Thekeytowinningthemover?Hackensackandothersmustmakesurethetechnologysavestime,is
easytouserightfromthestart,anddoesn'tgetinthewayofpatientrelationships.Overthepasttwo
years,Hackensackbeganthetaskofgettingdoctorstoembracethetechnology.Ithasmadelarge
strides.
ThestoryofHackensackisnosimpleparable.Doctorsandnursesgrouseaboutthenewtechsystems.
SoftwarefailsWebsitescrash.Therealityisthatbringingtechnologyintohealthcareismessy.So
don'ttakethesenotionsonfaith.Readon.
ByTimothyJ.MullaneyandArleneWeintraub
2015BloombergL.P.AllRightsReserved.MadeinNYC

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