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.