When I read in the Premier healthcare alliance's recent spring 2013 Economic Outlook that 43% of survey respondents indicated that their organization will make its biggest capital investment in healthcare information technology and telecommunications in 2013, up 21% from two years ago, I wasn't surprised.
In the HealthLeaders Media 2013 Industry Survey, 36% of the executive respondents said they expect major increases in IT spending over the next 3 years, and another 44% expect a minor increase. And at our most recent CFO Exchange, "clinical and information technology upgrades" was one of the top 3 spending priorities for the assembled CFOs.
Earlier this year, I spoke with CFOs at several large health systems around the country about their capital spending plans, and this was the theme I heard over and over.
More money is being invested in IT infrastructure and less in brick and mortar assets than ever before, I was told repeatedly. Provider organizations are sinking millions—sometimes hundreds of millions—of dollars into electronic medical records and other system upgrades, mainly in preparation for the move toward accountable care and population health management.
In order to provide coordinated care throughout a health system, it has to be possible for patients' information to follow them and be available to every clinician in every setting, which can only be achieved through sophisticated IT systems that can speak to each other seamlessly.
Mark Bogen, senior vice president and CFO at South Nassau Communities Hospital, a 435-bed facility in Oceanside, N.Y., tells me that he is also not surprised by the Premier survey results.
"Given the fact that the surge in EMR is tied back to the availability of meaningful use dollars and, ultimately, to penalties starting in 2015, I would say about two thirds of dollars are being spent on EMR-related technologies, whether directly or by people upgrading other software that needs to talk to the EMR. On top of all of that, there is the need to marry clinical data with financial data so that it is meaningful beyond what the feds are requiring."
Bogen says SNCH is investing heavily in its own EMR, which will be fully implemented in a matter of weeks.
"We have spent a lot of money since 2010 moving forward with implementing our EMR between June 30, 2010 and June 30, 2013. We will probably have spent close to $30 million on the EMR in total... We certainly have spent much more of our capital budget on IT and the EMR."
Like the CFOs I spoke with earlier in the year, Bogen says he is banking on the EMR as a tool to improve care delivery.
"It's not that I drank the Kool-Aid, but I understand what the Promised Land could be, and I'm trying to get our organization heading that way."
For the most part, the hospital's medical staff has responded well to the addition of the EMR and is beginning to use it more fully, Bogen says.
"As an organization, we thought there was going to be a lot of concern and anger—and there was some of that for obvious reasons—but I think at the end of the day, our clinicians have really tried to embrace it and are actually ramping up requests to try to get data and information out of the EMR so it can be meaningful for them and their patients."
"Before we were relying on someone sitting at a desk and perusing through a paper chart, and you could only look at that stuff in a retrospective way. Here we have the ability to look at the data in a way that could positively affect the quality of care for a patient that is currently here," he adds.
Gaining access to real-time data across the care continuum is a major step forward in the pursuit of better population health management and improved patient wellbeing, and is motivating many health systems and hospitals to invest big bucks in their IT systems.
Stony Brook University Hospital, a 603-bed medical center in Stony Brook, N.Y., is also spending the biggest chunk of its capital budget on IT, says Jane Tsui-Wu, interim CIO.
"…[O]ur IT capital request is the single largest component of our capital budget, representing approximately 40 percent of the budget for next fiscal year. [The] major factors driving this include ongoing development of our EMR to electronically share healthcare information across multiple care sites, to assure smooth transitions of care and enhance patient safety," she says.
Additionally, Stony Brook is investing capital dollars to make it possible for remote devices to talk to its EMR—another key component for successful coordinated care.
"We are also working to enable greater mobility for clinicians and achieve greater integration of medical devices with our EMR for improved efficiency and patient safety," Tsui-Wu says.
Hospitals and health systems have a lot of competing priorities when it comes to their capital budgets. There is almost no end to the possible facility renovations and medical technology upgrades that could be done, not to mention the myriad merger, acquisition, and physician alignment strategies that are being discussed in every hospital board room right now.
Despite this battle over resources, provider organizations are identifying IT as the area where they are most likely to spend the largest amount of money because they understand that the path forward requires integrated computer networks that allow for a system-wide approach to patient care and population health management.