US Healthcare in a Critical Condition

31 March 2010 (Last Updated March 31st, 2010 18:30)

Many US hospital executives believe the country's healthcare system is in a state of crisis. Barack Obama's proposed reforms could affect costs and quality of care. Despite this, most hospitals are planning to increase IT budgets in 2010. Ben Sawyer discusses the results of a recent survey into how the current economic and political climates are affecting hospitals' IT-purchasing decisions.

US Healthcare in a Critical Condition

As President Obama continues his proposals to reform the US healthcare system, the industry, regulators, healthcare providers and insurers are considering the potential impact that these changes will have on their business models.

With this in mind, a recent survey of US hospital executives has been carried out by StatCom to determine how the current economic conditions and the healthcare-reform discussion are affecting hospitals' IT purchasing decisions.

It reveals that improving productivity and efficiency to accommodate future patient demand is the primary strategy for 86% of executives, with 69% planning to invest in improving their technology during 2010, despite the economic instability.

Attention to IT

A majority of healthcare executives stated in the survey that capital projects are likely to be delayed at their facilities in 2010, with 57% seeing their IT budgets increasing in the coming year.

In light of these potential increases, 71% of executives said that they'd give attention and budget approval in 2010 to electronic health record (EHR) systems; over half of respondents would attend to computerised physician order-entry (CPOE) systems, while about a third predicted that patient flow and logistics technology would receive attention.

"Phonecalls and voice messages are the primary methods for communicating bed assignment and patient tracking to nursing staff."

When it comes to poor patient flow in US hospitals, 64% of executives surveyed think poor communication is the biggest cause and 60% suggest think it's down to physician-rounding patterns. Other reasons cited include:

  • ineffective scheduling of activities and resources (34%)
  • poor centralised knowledge about the location and status of each patient (31%)
  • lengthy admissions process (25%)
  • lack of staff to help facilitate patient flow (23%)
  • lack of beds (21%).

In terms of managing and improving length-of-stay (LOS), 93% surveyed rely on case management, with 63% using process-improvement efforts. When asked which system had the most potential to improve patient throughput at their facility, 68% of respondents indicated they thought a patient-flow and logistics solution would be the best option.

Yet still, in response to the question of which technologies are likely to get attention and budget approval in US hospitals in 2010, the majority of respondents indicated EHR and CPOE.

While a rallying cry continues for hospitals to automate manual processes as a way to improve efficiency and reduce errors in their facilities, the survey findings show that manual processes are still commonplace throughout hospitals – especially in the area of managing patient throughput. Phonecalls and voice messages are the primary methods for communicating bed assignment and patient tracking to nursing staff and even today more than half of the facilities do not use bed-management software or technology.

Room for improvement

Despite the recent discussions around automation in healthcare facilities as a way to reduce costly errors and improve patient care, US hospitals still face challenges when trying to improve patient flow. The majority indicated that the key challenges include budget constraints, resistance to change, and sustaining improvements. In spite of the sustainability issue, process improvement remains the number-one strategy of hospital executives for accommodating future patient demand.

"Despite the challenging economic environment, most hospitals plan to increase IT budgets in 2010."

According to a recent study conducted by Ashish Jha, an assistant professor at the Harvard School of Public Health, and Catherine DesRoches of Massachusetts General Hospital, a new federally funded US effort to implement electronic medical records in physicians' offices and hospitals throughout the nation is not likely to generate care improvements and lower costs quickly.

Until recently, measurements of how EHRs impact care and healthcare costs have focused on the results seen at high-performing healthcare providers such as the Mayo Clinic, which have spent years refining their systems. Those hospitals currently adopting EHRs will see a negligible difference in care quality and cost. For instance, in terms of heart failure, hospitals with advanced EHRs met best-practice standards nearly 88% of the time, but those without EHRs met those same standards nearly 86% of the time.

The findings from StatCom's 2009 survey demonstrate that despite increasing efforts to apply technology to help make hospitals more efficient, most healthcare facilities still rely on manual processes to reduce LOS and improve patient flow and throughput. While EHRs and CPOE can improve care documentation and reduce errors in the healthcare environment, the industry still has a long way to go in realising the potential of integrated patient flow and logistics solutions in helping manage
operational efficiency.

The impact of reform

As well as finding out how executives would spend money improving technology, the survey also tapped into their opinions regarding the overall state of the American healthcare system and beliefs on what, if any, impact healthcare-reform legislation will have on their facilities.

Among the 440 participants surveyed, the majority expressed concern that reform could negatively impact hospital margins and quality of care, while 74% believe the US healthcare system is in a "state of crisis". Only 4% of healthcare executives however, strongly disagreed with this statement.

"In the coming months, corporate America will likely see more movement from hospital executives adopting technologies to improve bottom line and patient experience."

However, amid this overwhelming concern for the current health of the US healthcare system, only half of the executives agree or strongly agree that reforms would help, with nearly half of respondents believing healthcare-reform legislation would have a negative impact on care in their facilities.

When asked what they thought would happen to the quality of care if healthcare reform legislation passes, nearly half responded to say that they think it will get worse, 30% think it will stay about the same, and 12% think it will get better. Moreover, 61% of respondents believe that if healthcare reform with a public option passes, their hospitals' profit margins will decrease.

A positive outlook

The US healthcare system is certainly not immune to the economic challenges facing corporate America. In fact, in many ways it has been hit even harder, but in the coming months, it will likely see more movement from hospital executives to adopt technologies, such as hospital-operating systems, as a way of improving bottom line and the overall patient experience.

It is good news that despite the challenging economic environment, most hospitals plan to increase IT budgets in 2010.

In an era where healthcare facilities are closely monitoring spending, an increase in IT budgets, if focused on solutions to deliver improved patient throughput and productivity, will have a positive impact on the healthcare industry.

The continuing debate on healthcare-reform legislation demonstrates the wide range of opinions on how best to control healthcare costs and improve access while advancing patient safety and quality.