To Contain Hospital Costs, Leaders Must Look to IT

The federal government is offering bonus money to hospitals for meaningful use of healthcare IT, even as it terms 2012 the year of meaningful use.  To spur developers to come up with better tools to track patients after discharge, the Office of the National Coordinator for Health IT has launched a challenge  to create a Web-based application that could empower patients and caregivers to better navigate and manage a transition from a hospital.

Incentives like this are easy money, but they really shouldn't be necessary. Technology is the only means by which healthcare systems can make it out of their current impasse.

Last week, at one of our Roundtable events—HealthLeaders Media's gatherings of small groups of hospital executives to discuss topics of top concern—Dave Brooks, CEO of Providence Health and Services' Northwest Washington Region in Everett WA, said his system will need to cut costs by 10–15% over the next few years, beyond its already efficient operations.

We hear targets of this magnitude repeatedly from healthcare CEOs and CFOs. That's a huge gap from current practice, in an environment of already-strained balance sheets at many organizations.

Brooks, an experienced executive who has worked at multiple healthcare systems, is experimenting with several ways of controlling costs: improving primary care access, meting out specialty care, and finding a better way to deal with patients who return again and again for expensive ER treatment for chronic conditions.