Health Care Goes Digital
Doctors and hospitals find they can't stay offline any longer

Health Care Goes Digital

The health-care industry finally has little choice: It has to get wired.

For years, doctors and hospitals have lagged behind other industries in joining the information-technology club -- and it didn't look like they'd ever sign up. Because of the unusual payment structure of the health-care industry, providers have never had many incentives to actually improve the quality of their product or install clinical-information systems that would let them manage patient care better.

Moreover, health care tends to be local, and not subject to the competitive forces that have forced quality improvement elsewhere -- such as the auto industry after Japanese car makers arrived. Quality advocate Don Berwick, founder of the nonprofit Institute for Healthcare Improvement, once famously said: "So far, health care has no Toyota."

Now, at long last, the spur to change has arrived -- but it isn't coming from competition. A number of factors, including mounting evidence that information technology helps hospitals save lives, have come together to make hanging back no longer an option for doctors and hospitals. New federal rules aimed at protecting the electronic transfer of medical data will be virtually impossible to comply with unless hospitals upgrade their information systems. So, the issue now is not whether to get new IT systems, but what to buy first, how to pay for it, and how to train health-care workers -- from physicians to lab technicians -- to do their jobs differently.

"The recognition is finally here that you can't practice medicine in the 21st century without information-technology support," says David Lawrence, chairman emeritus of the largest nonprofit managed-care group in the U.S., Kaiser Permanente of Oakland, Calif.

So, what's brought about this change in thinking?

PROOF THAT IT WORKS. Thanks to some hardy pioneers who have blazed the trail over the past decade, enough hard evidence is mounting to make the case for a massive transition to new clinical-information systems, a catchall phrase that encompasses a number of technologies. Among them: computerized order-entry systems that let doctors create and send prescriptions by computer, instead of writing out scrips; electronic medical records linked to patient Web sites that let doctors and patients communicate and manage care as a team; and mobile devices that provide doctors making their rounds with vital information on patient care.

"There is a clear linkage now between technology and better patient outcomes," says Steven Lieber, president of the Chicago-based Health Information and Management Systems Society, or HIMSS, which surveys hospitals and suppliers on the use of information technology.

SEPT. 11. In the aftermath of Sept. 11, a national information network to detect bioterrorism attacks and disease outbreaks is at the top of the government's agenda for the first time since the idea first took root a decade ago. The newly created Office for Public Health Preparedness is seeking more than $1 billion for programs that include the Centers for Disease Control's Health Alert Network (HAN), a nationwide program to connect public-health departments via the Internet. The CDC is also developing a National Electronic Disease Surveillance System, which aims to establish a single information standard that all federal, state and local institutions will be able to use to exchange their data.

NEW FEDERAL RULES. Starting next year, the 1996 Health Insurance Portability and Accountability Act, or HIPAA, takes effect. The act mandates the creation of a standardized method for insurance companies and doctors to exchange financial and administrative information electronically (which significantly reduces overhead and speeds up the entire process of identifying patients and getting paid for care) while at the same time ensuring that patients' data remain private. Though the Bush administration is now revising some of the privacy rules, any health-care provider that transmits data electronically will likely have to overhaul billing and claims-filing systems to comply with a single new standard. And there could still be penalties for violating certain privacy provisions in electronic transactions, including steep fines for disclosing identifiable patient information, even unintentionally.

SAFETY ISSUES. Add to the mix the growing alarm about medical mistakes, especially those that might easily have been prevented with better data and backup from information systems. Since the 1999 Institute of Medicine report that 44,000 to 98,000 people die annually from medical mistakes, concerns about patient safety have been mounting in the medical community and among legislators. Combined with recent horror stories about botched clinical trials, efforts to fix the problems are finally gathering steam.

Several states have enacted legislation aimed at reducing medical error, and hospital-accreditation groups are moving to require evidence of new safety procedures as part of the licensing process. There has been talk of national legislation aimed at reducing medical errors. And in hearings on Capitol Hill in recent months, a swarm of experts have been called in to testify about how technology can help solve the problem -- such as computer systems that let doctors know if they've prescribed the wrong dosage of a drug.

"Hospital chief executives are totally clued in to the safety issue and how technology can help," says Mitch Morris, an oncologist who runs the clinical practice group at First Consulting Group in Dallas. "They understand this is something they have to pay attention to and spend money on."

A POWERFUL WATCHDOG. The Leapfrog Group, a coalition of more than 100 public companies and private organizations that provide health-care benefits to more than 31 million enrollees, is using the purchasing clout of its backers to prod hospitals to improve safety and patient care. Suddenly, hospitals are talking about being "Leapfrog compliant" almost as much as they are talking about being "HIPAA compliant."

And IT is a big part of Leapfrog's agenda. Leapfrog, whose members spend about $53 billion annually on their employees' health care, runs a Web site (www.leapfroggroup.org⁴) that rates how well hospitals meet its standards -- and to get a good grade, hospitals will have to make big IT investments. For example, one of three standards Leapfrog uses to rank hospitals is whether they have computerized prescription order-entry systems, though fewer than 3% of hospitals do at this point. The other standards include how well the intensive-care units are staffed and how often hospitals perform certain high-risk procedures. Even to deliver the detailed performance data that Leapfrog uses to calculate rankings on those standards will require hospitals to invest in Web-based clinical-information-management tools.

"There is no question hospitals will need a lot of clinical decision-support tools and information systems to capture the information that we're looking for," says Leapfrog Executive Director Suzanne Delbanco. "We're really hoping to jump-start breakthroughs that wouldn't have happened if we hadn't come along."

As a result of all this, the subject of information technology is a hot-button issue as never before. The number of conferences, trade shows and symposiums on the subject has risen exponentially, as companies that sell information systems see a new wave of opportunity to sell products and ideas that have been languishing on the shelves. "For the last two years at the American Academy of Family Physicians annual assembly, the PDA and computer booths and courses have been oversubscribed, something totally new," says Joseph E. Scherger, dean of the College of Medicine at Florida State University. "The new generation of medical students takes IT for granted and would never work without it."

How hospitals will pay for all that technology is another matter entirely. Even though information technology can save money in the long run by cutting errors, reducing waste and making the whole process of health care more efficient, finding the capital to invest in the first place is a challenge. The health-care industry's economic woes remain, with many hospitals operating in the red and facing severe cost pressures from Medicare payment cuts. The HIMSS surveys also found that 27% of hospitals cited inadequate financial resources as the most significant barrier to moving ahead with new information systems, slightly higher than the number who said it was a problem last year.

Leapfrog's efforts have also raised the hackles of the American Hospital Association, which recently protested that Leapfrog's "three practices alone do not inform consumers about the quality of a hospital organization or the care that is delivered," and urged the group to consider other quality measures. But while Leapfrog says it is working with hospital groups on "fine tuning," it aims to stick to the standards it has selected.

Leapfrog estimates that the five-year costs of putting computerized order-entry systems in a 200-bed hospital range from $1.2 million to $7.4 million. Testifying in March before a House subcommittee hearing on medical errors, Matthew Miller, vice president for medical affairs at Danbury Hospital in Connecticut, said it cost his 371-bed hospital $2 million to put its system in. That "meant that there were $2 million worth of things I couldn't buy instead," such as replacement items and renovations for the 25-year-old facility, and new technologies his surgeons want for the operating room.

Because of such often-steep costs, many of the pioneers who have jumped on the technology bandwagon are more financially secure -- well-endowed private hospitals or centers attached to universities or research centers. The University of Illinois Medical Center in Chicago began moving to paperless medical records in 1995 using a system called Gemini designed by Cerner Corp., one of the leading health-information-technology companies.

The center, which includes a 450-bed hospital and outpatient-care center and eight satellite clinics, says it uses the system to open electronic charts for 40,000 patients about half a million times a month. The hospital is still moving some of its inpatient records to the electronic system, so there are still some paper records, but the number of requests for paper charts from the medical records has dropped by more than 75%.

In addition, the hospital has "reallocated" $1.2 million of nurses' time away from manual documentation, says Joy Keeler, the center's chief information officer. "That means the nurse is no longer tethered to writing and documenting medical data and can spend that much more time [on] the comfort and education of the patient." The hospital's IT system also includes a drug-interaction database that alerts doctors to a medical error before it happens -- doctors punch in the medicines they're going to prescribe for a patient, and the system tells them if the combination could have adverse effects.

Kaiser Permanente, whose 8.5 million members are largely outpatients, is spending $1.5 billion on IT over the next four years -- and that's just so its 10,000 doctors nationwide can convert paper medical records into electronic form in individual offices. The system, being designed by International Business Machines Corp. based on a pilot program in Colorado, will allow doctors from different offices to share data on patients, and eventually let patients interact online with their medical team. Most of Kaiser's patients can already refill prescriptions online; another pilot in Colorado is letting patients can ask their medical team questions on a secure messaging system, and an online program to book office visits is being tested in Northern California.

Kaiser's 27 hospitals aren't yet connected with such a system, but eventually Kaiser plans to install a more comprehensive data-management system that will let different hospitals access patient medical records and swap patient files and other information.

Kaiser's experience in Colorado, where it has 600 doctors and 400,000 patients, showed it how effective these and other IT programs could be. For example, after installing a computerized prescription drug-entry system, Kaiser learned that half its patients never picked up their prescriptions at all, according to Andy Wiesenthal, the physician heading the national rollout of Kaiser's clinical-information system. Now the prescriptions are filled only if the patient shows up. Though it means patients have to wait longer, Kaiser was able to cut the high costs of taking apart the orders and either discarding or returning the drugs to stock. And it also gives Kaiser a better idea of whether patients follow doctors' orders.

Bill Gillespie, Kaiser's chief medical officer, says Kaiser made the decision to automate its operations long before the new federal HIPAA regulations were put in place, but the new systems will make it much easier to comply with the rules.

In planning IT systems, HIPAA is in the forefront of many hospital executives' minds. In the most recent survey by HIMSS, getting compliant with HIPAA was hospital executives' top priority over the next two years. In the HIMSS survey, 74% of health-care providers said clinical-information systems, such as prescription order-entry technology, will be the most important health-care information-technology priority over the next two years, up from 64% the previous year. Using technology to promote patient safety and reduce medical errors was the second most-pressing information-technology issue identified by respondents, now and for the next two years.

Of course, for many doctors, adopting these new systems won't be easy. Even as a younger generation is trained to embrace technology, some doctors still view computer systems as an intrusion. "Physicians are trained to perceive themselves as practicing a craft, and they see information technology as the antithesis of craft," says Kaiser's Dr. Lawrence.

And some skeptics wonder whether the new pressures toward clinical-information systems will really lead to measurable improvements in quality. Some still think there's a lack of economic and competitive incentives. Others, like Mark Chassin, chairman of the Department of Health Policy at New York's Mount Sinai School of Medicine, have long taken the view that the health-care industry is woefully inadequate in setting tight tolerance limits for errors in treatment. Computers, they argue, will just magnify the errors in judgment that already plague health care.

"You don't automate broken processes," says Dr. Chassin. "The old way of making medical orders was prone to error, but there were lots of different eyes looking at the process along the way. If you just have computerized physician order entry without any new training and teamwork, it just means you can get dumb orders to patients really quickly. Computers can just make you stupid faster."

In fact, not every experience with new systems has been a happy one. The medical trade press has been filled with reports of systems that fell short of expectations or were so difficult for staffers to learn that procedures became more cumbersome rather than easier. "There is a saying that to err is human, but to really screw up you need a computer," says Gregg Meyer, director of patient safety programs at the federal Agency for Healthcare Research and Quality. "Informatics is a wonderful solution, but we have to make sure we implement these systems thoughtfully and carefully."

But, IT proponents argue, when systems are used with care, there are considerable benefits. For example, in establishing performance standards, Leapfrog draws on studies by hospitals that have gotten great results from pioneering work in IT. In calling for the spread of computerized prescription order-entry systems, Leapfrog relied on studies done at Harvard-affiliated Brigham & Women's Hospital, the flagship of Boston-based Partners Healthcare, widely hailed as one of the most aggressive early adopters of health information technology.

In studies published in 1998 and 1999, David Bates, chief medical officer of Partners, demonstrated that computerized prescription order entry reduced errors in prescribing medication -- which can range from giving patients a medication to which they have a known allergy to ordering a tenfold dose -- by 55% to 4.9 per 1,000 patient days from 10.7. In a subsequent study, which covered four years at Brigham & Women's, such serious errors and others were reduced by 86%. The computerized system automatically checks the drugs being ordered against the patient's medical record and lab tests; its database also includes a list of generally used dosages.

Leapfrog also relied on a study of computerized order-entry systems at LDS Hospital in Salt Lake City, part of Intermountain Health Care System. That study showed a 70% reduction in adverse drug events -- defined by the Institute of Medicine as "an injury caused by medical management rather than by the underlying disease or condition of the patient." Adverse events can happen that are no one's fault, such as a life-threatening allergic reaction to a drug when the patient had no known allergies to it. But many adverse events involved mistakenly prescribing drugs to patients who do have known allergies.

In addition to pushing for order-entry systems, Leapfrog has endorsed a plan by a new group called the Patient Safety Institute. PSI, based in Plano, Texas, sprang in part from a notion of Visa founder Dee Hock that there should be a virtual clearinghouse for confidential medical information shared among different players, much as Visa acts for various banks and their credit-card customers. The idea is to allow a single network to collect data from a patient's medical records in different doctor's offices or clinics. Doctors could use desktop computers, or handheld gadgets connected via a wireless network, to access patient information aggregated by PSI.

PSI says its research has shown that incomplete or inaccurate data in these areas contribute to a significant percentage of all medical errors. Last month, it announced two pilot sites for the project, the Empire Health Services hospitals in Spokane, Wash., and the Swedish Ballard hospital in Seattle. Whether PSI will be able to fulfill its ambitious goals of spreading the program nationwide remains to be seen.

Other IT proponents see promise in giving doctors handheld mobile devices that contain medical reference guides. Dr. Bates at Brigham & Women's recently reported that ePocrates Rx, the most popular drug-reference guide available on handheld personal digital devices, may help doctors significantly reduce the incidence of medication errors.

The study, published in the most recent Journal of the American Medical Informatics Association, indicated that 50% of ePocrates physicians who were surveyed reported that the devices and guide prevent one to two errors a week, and help doctors keep track of the constant barrage of new drugs and changing treatment guidelines. The study also showed that doctors can look up drug information much faster using ePocrates than with traditional sources such as the Physicians' Desk Reference; 60% of physicians surveyed reported that it took them 10 seconds or less to find information using ePocrates compared with one to five minutes for traditional methods (ePocrates didn't fund the study).

Dr. Meyer of the Agency for Healthcare Research and Quality, an internist who still sees patients in the U.S. military health-care system, says that the challenge as hospitals ramp up such systems will be to balance the automation of routine processes such as order-entry systems and wireless devices, with the important verbal and even nonverbal communication that takes place in the hospital.

"At checkout rounds, for example, it's useful if the doctor going off duty says to the next guy, 'I'm worried about the patient in Room 202 even though everything seems normal on the tests,'" he says. "I don't know how you translate that through a Palm Pilot." The solution will require "enhancing what we do through automation so we can make the time we spend in human interaction more valuable."

--Ms. Landro is an assistant managing editor of The Wall Street Journal in New York.

Write to Laura Landro at laura.landro@wsj.com ⁹

Updated June 10, 2002