Clinical technology: are you getting your money's worth? - several factors should be considered when investing in clinical information technology

Healthcare Financial Management, Feb, 2003 by Barry P. Chaiken

Finding Balance

When it comes to making clinical IT investments, organizations should go beyond traditional measures that weigh monetary costs versus quantifiable benefits. Overall value--in terms of a clinical IT system's ability to hasten the healing process, improve delivery of medical care, or promote goodwill--also should be part of the equation. Only by considering these and many other potential value factors can providers determine which systems meet their specific organization's needs and the community at large.

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Recommended Reading:

Chaiken, Barry P., "Physician Adoption of Technology Linked to Providing Benefits," Journal of Quality Health Care, April/June, 2002, p. 25-27.

Feldstein, Paul J., Health Care Economics, Fifth Edition, John Wiley and Sons, New York, 1998.

Kohn Linda T.; Corrigan, Janet M.; Donaldson, Molla S., To Err Is Human: Building a Safer Health System, Institute of Medicine, National Academies Press, Washington D.C., 1999.

RELATED ARTICLE: ISSUES AND ACTIONS

Providers investing in a clinical information technology (IT) system should consider their organization's specific needs and those of the surrounding community.

* Assessments of clinical IT value should take into account factors beyond cost savings.

* Providers should be aware of related tangible benefits, such as reductions in length of stay and enhanced administrative and clinical services.

* The capability of a clinical IT system to help prevent medical errors and improve operational efficiency should weigh heavily during a provider's assessment of whether to invest in the system.

Economists' Perspectives of Healthcare Value

More than 40 years ago, economist Anne Scitovsky proposed the development of separate indexes to identify treatment costs associated with specific illnesses. These indexes are then combined into a composite index, which weights the specific index of each illness for a base year.

Scitovsky's index not only reflects annual fluctuations in the incidence of each disease, but also helps account for reductions in length of stay associated with advances in treatments and technology. With traditional calculation methods, measurement merely reflects the total cost per inpatient day.

Furthermore, Scitovsky's index reflects treatments that reduce morbidity and mortality. For each index, a single objective indicator of quality is chosen. This indicator is then used to adjust each illness index before calculation of the composite index.

Economist Yoram Barzel built on Scitovsky's model, suggesting that prevention of disease be calculated in the composite index as well. As healthcare economist Paul Feldstein has stated, "The prevention of a case or illness clearly represents an output that is superior to the successful treatment of a similar case, but if we concentrate on the costs per case of treating specific illnesses when they occur, we ignore the influence of preventive medical care."

ABOUT THE AUTHOR

Barry P. chaiken, MD, is vice president, medical affairs, McKesson corporation, Boston, Mass.