Healthcare IT Hit in Recession


by Tony Kontzer

President Obama's plan to extend healthcare coverage, already confronted with a surprising snag, now faces a significant test on the IT front. Healthcare IT News reports that a new American Hospital Association survey indicates that economic pressures have forced more than half of American hospitals to either scale back IT projects or table them altogether.

One of the tenets of nationalized healthcare is an IT infrastructure that would improve the ability of doctors and facilities around the country to share and access patient data. Something tells me a slew of IT cutbacks at hospitals isn't helping the cause, and these cutbacks are coming as the nation faces a potential health care crisis in the form of the recent Swine Flu outbreak that could eventually shine a bright light on healthcare IT shortcomings. (As Ed Cone explains, IT plays a potentially large role in preventing that outbreak from expanding.)

The numbers are alarming. Some 28 percent of hospitals have cut back IT projects currently under way, another 27 percent have scrapped planned IT projects, and 6 percent say they've pulled the plug on active projects.

A big share of the blame for this IT shortfall can be placed on the cumulative toll the economy is taking on the industry. The AHA survey shows that hospitals are reporting drop-offs in elective procedures, and inpatient admissions in general, and the impact is being felt in hospital IT departments, where managers are being forced to make tough decisions.

Any CIO today can sympathize--the economy has taken its toll on IT departments in pretty much every industry. But healthcare is a unique beast, and efforts to modernize the nation's healthcare IT infrastructure are critical to achieving any semblance of a truly nationalized healthcare delivery system, especially one that can meet the stringent privacy guidelines that govern patient information. That means investments in healthcare IT must be protected even when the economy makes doing so challenging.

It's a situation that commands immediate attention, one that's just as critical to the future of the American people as the Herculean efforts being undertaken to clean up the financial services industry. Perhaps the Obama administration should rethink the strategy of doling out more than $17 billion to Medicare and Medicaid providers who can prove they're using "certified IT" in a meaningful way, and reserve some of those funds for IT departments at cash-strapped hospitals that are having to make painful cutbacks. Certainly, it's worth looking at, no?

We would like to hear from hospital IT executives about the cuts they're having to make, so we can better understand what areas are being hardest hit. And CIOs from other industries are invited to provide their thoughts on how the healthcare industry can preserve its long-term IT goals during challenging economic times.


3 Comments for "Healthcare IT Hit in Recession"

  • mtemares May 04, 2009 9:47 am

    While cost cutting on operations exists at a serious level, work on EHR projects must be initiated or continued in order to receive stimulus money. IT directions/projects have to be carefully evaluated but certainly they cannot come to a halt.

  • Ed Carmona May 01, 2009 10:32 am

    Your article assumes that we all want a "nationalized healthcare delivery system." Many of us, if not most, oppose nationalized healthcare in any form. Healthcare is not a right - it is a privilege. Like any other service provider, hospitals need to make those painful decisions to remain viable and efficient. Those that cannot become efficient, while delivering a high quality service, do not have the "right" to continue to exist. Many, if not most, of our healthcare delivery problems have to do with using too many tax dollars to keep inefficient, poor quality service providers, afloat. What we need is equalized competition between healthcare providers so that those who deliver poor service will close while those that deliver high quality service will succeed and grow. We see this in education. Overall, voucher supported magnet schools, and private schools and colleges, produce the best graduates by providing the best educational opportunities. They do so because they have to compete with publicly funded schools. Since they cannot compete with those schools financially, in order to remain viable, private schools must deliver a higher quality service; otherwise, they have to close down. For those who want socialized medicine, please do a thorough study of the Canadian and British socialized healthcare systems. I have done so, and have discussed this with many colleagues that are subjected to those systems. The data, and the personal experiences of my colleagues, repeatedly demonstrate that socialized medicine leads to degraded medical services. As a retired military service member, I have seen the effects of a government controlled healthcare system, both while on active duty, and as a veteran. Active duty healthcare service is better than the healthcare delivered by the Veterans Administration. However, over the last several years, with a few exceptional programs, both systems have degraded and both systems now deliver marginal services. As a result, many of my friends and acquaintances that are members and former members of the military have private insurance coverage so that they have the freedom to choose their personal healthcare providers. Government regulations are needed to protect the public from medical quackery, but a government run healthcare system will only worsen the quality of care. V/r, SCPO (Ret) Ed Carmona, USNRC Former Command Senior Chief of NORAD, US SPACE COMMAND, and US NOTHEREN COMMAND

  • TGC April 30, 2009 3:10 pm

    everything is going digial nowadays, the healthcare industry can certainly benefit from this. what about Google Health or the Microsoft partnership with the Mayo Clinic, do you think these tools will help out the healthcare industry. i read on justaskgemalto that having your medical information online isnt very safe, unless you have really sophisticated password technology. i heard that medical identity theft is a new type of identity theft. do you think that cut backs to healthcare IT will mean lower security that can be hacked into?

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