Health Tech Spending and Profitability – Chicken, Egg or Omelet?

imageAs someone whose entire career has been steeped in clinical medicine and technology, I’m a big fan of the American publication, Hospitals and Health Networks.  I especially like reading the commentaries on the publication’s digital feed, H&HN Daily.  Last week, I was drawn to a highly relevant piece written by H&HN Senior Editor, Haydn Bush.  In an article titled “Tech Spending and Profitability: The Chicken or the Egg?”, Mr. Bush explores the question, ‘Does health IT spending lead to financial stability, or is it the otherimage way around?”  The answer seems to be that yes, indeed, hospitals that have the resources to strategically invest in IT perform better and grow faster than hospitals that do not.  The article concludes with some thoughts from Adam Kates, an analyst with Fitch Ratings who believes (to quote the article) “in the years to come as population health, chronic care management and overall quality performance become increasingly intertwined with a hospital’s overall financial health, the question of whether to invest heavily in technology will become a no-brainer”.

This morning I had an executive session with the CIO of the largest hospital system in Thailand.  His company owns and operates 28 hospitals in Thailand and Cambodia.  In our conversation it was immediately evident to me that this CIO and his company definitely think of IT as a strategic asset and attribute much of their growth and success over the last ten years to savvy IT investments.  We spent almost no time talking about Hospital Information Systems or Electronic Medical Records.  Instead, the conversation focused on how this CIO would leverage private and public cloud capabilities to bring platform infrastructure and applications to his far-flung enterprise.  We talked about globalization and travel medicine.  We discussed ways to use unified communications technologies in continuing medical education, care team collaboration, and telemedicine.  We examined how applications written against big data in the cloud could provide insight to population health, clinical activities and administrative operations across the enterprise or even the entire country.

imageimageFor me, the debate isn’t about chickens or eggs.  Successful organizations are taking what they have at their disposal, thinking strategically, and using the best ingredients they can muster to make omelets – the applications and solutions that clearly separate them from their competition.  It’s much more than thinking about HIS, EMR or even HIE.  While those things are important, they alone do not make a healthcare organization stand out.  It’s all about how digital data and information technology can be applied to improve care processes, the quality of care, access to care, customer service, organizational operations, and how all of this can help lower costs.  Some of the best ideas in healthcare actually come from studying best practices in other industries.  So before you get too caught up trying to figure out if IT investments lead to better performing hospitals, or if better performing hospitals are more likely to invest in IT – start thinking more creatively about how you’ll use the most contemporary (and often commodity) technologies around you to make an omelet that everyone will want to eat.

Bill Crounse, MD            Senior Director, Worldwide Health               Microsoft

Comments (1)
  1. The best technology still requires human commitment to use it. By getting all medical care professionals on the same page, so to speak, the delivery of healthcare services can be greatly improved upon to lower costs and medical errors. Surprisingly, many health care organizations in my region are still struggling to adapt to the modern efficiencies possible with the correct IT investments.

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