it in health care

By Wullianallur Raghupathi and Joseph Tan

Accordingly, using IT in astrategic and innovative manner tosupport health-related decisionmaking represents a serious chal-lenge for health care organizationmanagement, as well as for systemsdevelopers. Traditional, nonstrate-gic IT focuses on information pro-cessing, mostly for well-structured,routine task situations and opera-tional work processes (such aspatient data management systemsfor streamlining patient admis-sions and bed assignments). Such

applications are concerned primar-ily with improving the efficiency ofoperational tasks, rather than theeffectiveness of strategic and inte-grative decision processes. In thissense, strategic IT focuses on theinformation requirements of adhoc and poorly structured deci-sion tasks. The applications con-centrate on giving an organizationan IT-based strategy for meetingcompetitive challenges (such as byusing emerging Web technologiesto integrate health care organiza-

Information technology plays an increasingly central role inthe U.S. health care industry. A survey by Sheldon I. Doren-fest & Associates of Chicago estimated IT spending on healthcare in 2002 would be $21.6 billion [9]. Further exponentialgrowth can be expected as the industry implements furtherlarge-scale electronic medical record keeping; provides remotediagnostics via telemedicine; upgrades hospital informationsystems (HISs); sets up intranets and extranets for sharinginformation; and uses public networks, including the Internetand community health information networks, to distributehealth-related information.

Besides granting ready access to data warehouses full of patient-care and insurance

records, as well as critical medical information,they help management cut costs and remote

physicians work collaboratively.

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56 December 2002/Vol. 45, No. 12 COMMUNICATIONS OF THE ACM

Strategic IT Applications in

tions internally and externally). Even so, all stakeholders,

including profit and non-profithealth care providers (such as hos-pitals, clinicians, health associa-tions, and private health agencies)and payers (such as insurancecompanies and health mainte-nance organizations, or HMOs),as well as employers, practitioners,public health officials, educators,systems developers, and con-sumers, must prepare for comingchanges in these technologies andapplications.

Health care and computer pro-fessionals must concern them-selves with how changes in ITmight affect them as both facilita-tors of IT application develop-ment and as health careconsumers. As IT facilitators, theymust focus on the design anddevelopment of applications tocapture, organize, store, normal-ize, and present health informa-tion in new ways, as well as replaceand integrate existing systems withemerging technologies. As con-sumers, they must focus on theconfidentiality of the doctor-patient relationship and the pri-vacy of patient medical data, alongwith the technology’s security,usability, and political and societaleffects.

In light of these changes, healthcare and computer professionalsand consumers of health servicesneed a framework for conceptual-izing and understanding strategicIT applications. Our purpose inpresenting the following integra-tive framework is twofold: informhealth care consumers as to whichtechnologies play a critical role in

health care delivery and addressissues relevant to developers of thetechnologies.

Strategic IT FrameworkTwo key dimensions of systemsintegration (see the figure) may beused to develop the framework:

Internal integration. The degreeto which systems and technolo-gies are integrated with oneanother within an organization;and

External integration. The degreeto which systems and technolo-gies interface with outside orga-nizations and agency computersystems.

Computerized patient record(CPR) systems, document man-agement systems, data ware-houses, and intranets allpotentially enhance the informa-tion sharing and integration ofinternal systems in health careorganizations. These technologiesare used to help eliminate dataredundancy and inconsistencytoward achieving the paperlesssharing of data throughout anorganization. The Internet, alongwith extranets, networking, andATM technology, can be used todeliver integrated solutions, link-ing with outside organizationsand agencies.

It is difficult, if not impossible,to definitively classify each emerg-ing technology as belonging exclu-sively to either the internal orexternal sets of applications; forexample, evolving health/medicalinformatics and telematics may beconsidered strategic IT support,

whether for internal or for externalintegration. Several key for emergingtechnologies serve to illustrate thisconceptualization of strategic IT.

Computerized patient records.One notable trend in health careIT is the move toward a standard-ized CPR system with commondata formats. Defined as electroni-cally stored information aboutindividuals, uniquely identified byan identifier, CPR technologyentails the capture, storage,retrieval, transmission, and manip-ulation of patient-specific health-care-related data, includingclinical, administrative, and bio-graphical detail [8]. The intent isto eliminate the need for dataduplication, thereby reducing thecost of maintaining multiple data-bases. For example, an intranet-enabled CPR system installed in1997 at Cabarrus Family Medicinein Concord, NC, a practice withapproximately 26,000 patients infour clinics, was expected to freeup record-keeping time for physi-cians and residents alike by grant-ing access to patient recordsthrough standard browsers. Priorto the system’s implementation,the practice’s physicians werereported to have spent up to 40%of their time going through paper-based patient records to meetHMO requirements.

As patients consult specialistsout of network and out of state,many health care providers imple-ment some aspects of this technol-ogy on a wider scale through smartcards similar to drivers’ licensesand credit cards for storing patientinformation. The information canbe updated periodically, and

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patients can take them wherever they go for medicalcare. Combined with Web-based retrieval, smart cardshelp facilitate the portability of and access to onlineinformation.

The West Palm Beach Veteran’s AdministrationMedical Center in West Palm Beach, FL, began in1995 to pare down all its medical records and associ-ated paperwork to approximately 200 clinical and1,000 administrative electronic forms accessiblethrough computers in screening rooms and nursingstations [6]. These forms enable physicians to pointand click to enter the results of any type of examina-tion or to issue prescriptions. The system has report-edly made it possible to substantially reduce theMedical Center’s physicalfile storage costs.

Document managementand data warehouses.Under financial pressurefrom managed-care med-ical services and insurers,health care institutionsincreasingly turn to suchtechnologies as documentmanagement systems anddata warehouses to collectand administer clinical and financial data online.Document management technology includes docu-ment imaging, workflow, electronic forms processing,mass storage, and computer output to laser disk. Datawarehouses involve large stores of data for strategicdecision support; for example, an analysis of patientdata can reveal patterns of symptoms related to spe-cific diseases.

Hospital CEOs increasingly realize the only waytheir organizations can compete in a health care mar-ket dominated by managed-care providers is to learnto manage their own information, knowledge, anddocumentation. Thus, many senior managers, as wellas physicians, nurses, and staff, seek quick and afford-able ways to tap available information banks ofdetailed patient records. Data warehouses are becom-ing crucial, as the industry moves from a businessmodel based on revenue to one based on cost-outcomes information management.

Many hospitals, both public and private, need doc-ument management to handle the paper-intensiveprocess of collecting and filing patient information;for example, the San Jose Medical Center in San Jose,CA, began in 1992 to address the challenge of access-ing medical records speedily and making record man-agement more efficient by using a LAN to link itsdocument management software, relational databases,and imaging equipment. Management reported dra-

matic results, allowing the center to reduce its staffand increase revenue by handling external recordrequests directly.

St. Vincent’s Hospital in Birmingham, AL, beganin 1995 using a new image-based client/server systemto reduce the time needed for patient registration andinsurance verification, eliminate some business officestaff, increase registrations, begin to sort all patientrecords and insurance information online, and reducedelayed payments into accounts receivable [3]. Thesystem converts paper-based records into electronicimages; this data, in turn, was merged with data froma mainframe-based HIS and other departmental, lab-oratory, and pharmacy

systems to form a compre-hensive CPR system.

The Johnson MedicalCenter in Johnson City,TN, determined in 1996 itwould need a data ware-house to enable it to studyhistorical records of patienttreatments, especially tospot trends and anomalies.The goal was to generatereport cards about physi-

cians, thereby measuring the costof each one’s services at the hospi-tal in terms of types of treatment

performed, time spent with patients, and other fac-tors. The data could be used to analyze the cost ofeach treatment vis-à-vis the amount of money paid byinsurers.

In 1999, the U.S. Department of Defense plannedto deploy what DoD officials said would be the largestknown medical data warehouse [2]. Called the Com-puterized Executive Information System (CEIS), itwas expected to eventually hold the records of morethan 8.5 million active members of the U.S. militaryhealth care system treated at approximately 115 hos-pitals and 461 clinics around the world. Beginning in1995, it had already been converting its fixed-costhealth care system to a managed-care model to lowercosts and increase care for active military personnel,retirees, and dependents.

Web technology. In information-intensive societieslike the U.S. , health care consumers need and want asmuch information as possible concerning their con-sultation and treatment options and therefore increas-ingly demand access to relevant and personal healthinformation. HMOs have added tens of millions ofmembers over the past several years, driven by com-petition and the potential for profit. From a providerperspective, they need information to analyze the out-

External Integration

Internal Integration

Computerized Patient RecordsDocument ManagementData Warehouse

Web-based Technology/ Network/ATM

HealthInformation/Telematics

An integrative strategicIT framework.

comes and costs of various treatment plans. The Inter-net plays a crucial role in bridging the gap betweenhealth care providers and consumers by making avail-able the required information.

There are likely many examples of how the Inter-net provides relevant information to the varioushealth-system constituencies, including consumers,physicians, and health care managers. A notable strat-egy for an HMO to provide value-added customerservice is to give users, including patients, physicians,and hospitals, access to online insurance service data;for example, providers and recipients of a service maytrack their patients’ insurance claim processing via theWeb. The advantages of electronic filing of insurancebenefits and claims include reduced costs for theHMO and its network of hospitals, physicians, andcorporate clients, while improving access and usabilityfor its customers. It may also reduce agency and laborcosts while helping provide insights into health caretrends and medical practices.

Blue Cross/Blue Shield of Massachusetts beganoffering Web servers and on-site multimedia kiosks in1995 in Boston and Worcester, MA, facilitating accessto online insurance services; users have access to infor-mation about Blue Cross services, as well as abouthealth care and medical issues. The kiosks allow usersto search and print physician and hospital databaseinformation, peruse details about drugs and treatmentalternatives, and learn the specifics of Blue Cross ser-vices. The kiosks also provide telephony links to cus-tomer-service representative and member services.One aim is to significantly reduce the cost of in-houseinsurance support and education by directingemployees and customers to the Web site and kiosks.A good number of HMOs also provide access toinsurance and health data via the public Web.

To date, both intranet and extranet technologieshave been tapped by a growing number of hospitalsfor in-house and external sharing and distribution ofmedical information. Geisinger Health Care Systemin Danville, PA, was described in PCWeek as an indus-try leader by leveraging IT networks and intranets toreinvent the health care delivery process [5]. Its systemconcept includes the extension of intranets for use bypatients; for example, a service called Tel-a-Nurseallows patients to call in medical questions to beanswered by nurses accessing relevant information viathe intranet.

Networking and ATM technology. The benefit ofthe technologies cited here can be augmented strate-gically through electronic and digital networking—alogical next step for health service delivery. Under-standing and developing the technology is critical,especially from the perspective of managed care, as

multiprovider organizations vie to provide integrateddelivery of health services along the entire care con-tinuum; for example, the Orlando Regional Health-care System in Orlando, FL, began in 1996 to buildan integrated delivery network, a form of one-stopshopping for all types of health service in response toits need to reduce costs while continuing to market itsservices.

On the other hand is virtual health care, or net-works of coordinating partners in which each onedoes only what it does best. As each partner’s infor-mation needs are often similar, they tend to invest indistributed, client/server networks and OO technol-ogy to deliver the necessary links. From a health-orga-nization perspective, the closest thing to a healthnetwork is the electronic data interchange hospitalsemploy internally among their admissions, clinical,and accounting departments, as well as externally withinsurers. In some cases, hospitals have given admittingphysicians online terminal-based access to patientrecords; another alternative is a system that followspatients through each encounter with a medical pro-fessional.

Asynchronous transfer mode (ATM) network tech-nology handles multimedia applications withoutdegradation—an ideal service for integrated telemed-icine through its support for fast transmission speedsand multiple traffic streams. Radiology and teleradiol-ogy are among the applications that benefit fromATM technology; for example, Rush-Presbyterian/St.Luke’s Medical Center in Chicago began in 1995developing an ATM backbone network for its radiol-ogy department. Meanwhile, St. Paul’s Hospital, ateaching hospital at the University of British Colum-bia in Vancouver, uses an ATM backbone network toconnect its pulmonary research laboratory with physi-cians outside the hospital. The network enables thetwo groups to study the same test results and speedpatient diagnosis (such as when diagnosing diseases ofthe lungs). The hospital wants to make it possible forresearchers in the laboratory and physicians locatedelsewhere to collaboratively view slides and X-rays,trade data, and compare findings online.

Medical informatics and telematics. Medical infor-matics (including medical telematics) is concerned with“the cognitive, information processing, and communi-cation tasks of medical practice, education, and research,including the information science and technology tosupport those tasks” [1]. More broadly, it emphasizesclinical and biomedical applications of the various tech-nologies surveyed here with the added option of inte-grating the clinical components either amongthemselves or with administrative-type HISs. In thisregard, the field of health/medical informatics and


telematics has evolved rapidly over the past several years.A number of clinical applications employing artifi-

cial intelligence, neural networks, and fuzzy logictechniques are being developed to give physiciansclinical decision support. Dealing primarily withinformation used in medical decision making, theyaim to assist physicians and other medical experts indiagnosis and treatment. Health decision support sys-tems and more specifically clinical decision supportsystems and expert systems are used in many of theseapplications [10]. Accordingly, we focus first on gen-eral applications, followed by more specific expert sys-tem applications and more integrated applications;our discussion of health telematics focuses mainly ontelemedicine, a key application.

An example is an interactive videodisc system thathelps enter personal health data to weigh the pros and

cons of surgery as a treatment option. Such softwaremay promote shared decision making and promiseimproved quality of care without increasing costs.Richard Foster, MD, medical director of a 40,000-member HMO operated by South Carolina BlueCross/Blue Shield, implemented such a system in1992. Patients and physicians who have used it reportit enhanced their physician-patient relationships.Others trying similar programs include MassachusettsGeneral Hospital in Boston, Dartmouth HitchcockMedical Center in Hanover, NH, the VeteransAdministration, as well as several regional Kaiser Per-manente HMOs. In yet another example, Tufts Asso-ciated Health Plan of Waltham, MA, installed ahomegrown PC-based system in 1992 to access datamore efficiently.

In the area of expert system-based applications inmedical diagnosis and treatment, the Patent Watchsection of Computerworld reported the issuance of apatent for a computerized system for more accuratemonitoring of the fetal heart during the humanbirthing process [7]. Data is fed into a rule-basedexpert system and neural network that classify the sit-uation as normal, stressed, indeterminate, or omi-nous. In another such application, a computerizedvoice-response system provides medical advice for

common ailments, including indigestion and aller-gies, via telephone 24 hours a day. Responses arebased on the caller’s self-reported symptoms and con-sultation history, along with the latest medicalresearch. The system tracks the improvement or dete-rioration of the patient’s condition during follow-upcalls. An expert system designed to spot irregularitiesin physicians’ bills was implemented in 1992 at For-tis Benefits Insurance Co./Woodbury in St. Paul,MN; it reportedly saves the company an estimated$540,000 a year in incorrect billing [4]. LDS Hospi-tal in Salt Lake City, UT, uses an automated patientinformation system to detect adverse drug events,including allergies, unpredicted drug interactions,and dosage problems. The system reportedly flagsadverse drug events 60 times better than its human-practitioner counterparts.

Telemedicine is a key aspect of health telematics,connecting geographically dispersed health care facil-ities via videoconferencing, telecommunication, anddigital networks to perform long-distance medicaldiagnoses. One notable use of the technology is toaccess patient records on film (such as magnetic reso-nance imaging) to perform remote clinical diagnosesand surgeries. The technologies two major benefitsare lower cost of health care and online access to topmedical experts worldwide; other benefits includemedical education and intercontinental health care.

Allegheny Health Education and Research Foun-dation in Pittsburgh, PA, began in 1994 to develophigh-speed, digital multimedia networks. The aimwas to link major health care and teaching institu-tions throughout Pennsylvania. NeuroLink, a net-work of 20 domestic and six international sitesconnected to a central receiving station via publictelephone lines expedites emergency neurosurgeryconsultations. Neurosurgeon Julian Bailes is reportedto have remotely diagnosed more than 100 patientsand saved more than $500,000 in transportationcosts over several years. Affiliated institutions sharecomputerized tomography scans, magnetic resonanceimages, X-rays, and other medical data. In a follow-up phase of the project brain surgeons will be able to


The prospect of storing health information in electronic form prompts questions about standards, ethics,

patient privacy, data confidentiality, and security.

interact with medical students in Philadelphia whileconducting surgery in Pittsburgh. The network hasalso been extended to the Medical Consultation Cen-ter in Cairo, Egypt, a clinic operated by Egyptian neu-rosurgeon Amr Mansy.

The telemedicine system at Pathway Health Net-work uses videoconferencing to link a number of hos-pitals in the Boston area, fostering strongphysician-physician relationships across participatinghospitals. Initially used to facilitate consultationsamong physicians, another newer goal is to improvedelivery of patient care by lowering costs and increas-ing market share.

ConclusionThe health care industry increasingly views IT as afundamental asset in providing health-related infor-mation services and decision support on demand, aswell as in managing rising costs and changing orga-nizational needs, improving the quality of health ser-vices and patient care, and fighting illness whilepromoting wellness. Instead of relying on handwrit-ten notes buried in paper files, doctors, nurses, andother health care professionals now turn to variousforms of IT, including CPR and document manage-ment systems, data warehouses, point-of-care appli-cations, distributed networks, and telematics, toprovide the information they need when they need it.

Demand is motivated by recent changes in thehealth care industry and its approach to deliveringpatient care. The strategic IT applications reviewedhere suggest how far IT has come in the field of healthcare computing. We expect future breakthroughs inintegrated systems, intelligent networks, and robotics.Indeed, the ability to integrate clinical and adminis-trative information about patients means physiciansare more able to provide care at lower cost to all par-ties; for example, integrated decision-support systemscan provide health professionals in distributed clinicalsettings online real-time histories of patients in masterpatient index databases.

These systems will also let physicians and hospitalmanagement track and analyze patient care histories,test results, and cost information. Typically, suchapplications combine data warehouses, electronic dataentry, messaging, and GUI tools. The strategic use ofintelligent networks to automate patient recordkeep-ing and provide integrated patient care, timely deci-sion support, and remote consultation, as well asexpert knowledge in specific domain areas, promisesto help lower the costs of treating complex case-mixgroupings while improving the quality of the careactually delivered [1].

However, these applications also reflect weaknesses

in the security of patient data. The prospect of storinghealth information in electronic form prompts ques-tions about standards, ethics, patient privacy, dataconfidentiality, and security. Lacking proper controls,procedures, and policies, these systems might temptunauthorized users to try to access and even misuseinformation associated with legitimate users. If suchconcerns are not addressed, the health care industrycould be discouraged from exploiting IT, and health-care consumers will hesitate to share their personalmedical information.

Overall, the U.S. health care industry’s strategicintegration of IT promises to revolutionize health caredelivery while opening new areas for applications andresearch.

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emic discipline and institutional priority. J. Amer. Med. Assoc. 263, 8(Feb. 23, 1990), 1114.

2. Hamblen, M. Pentagon to deploy huge medical data warehouse. Com-puterworld (Aug. 3, 1998), 25; see www.computerworld.com/database-topics/data/datawarehouse/story/0,10801,32043,00.html.

3. King, J. Image system cures hospital records ills. Computerworld (Aug.7, 1995), 59; see www.computerworld.com/news/1995/story/0,11280,7682,00.html.

4. Margolis, N. and Booker, E. Taming the health care cost monster.Computerworld (Aug. 3, 1992), 14.

5. Mullich, J. Intranet gives HMO a shot in the arm. PCWeek (Feb. 3,1997), 27–34.

6. Ouellette, T. Hospital takes paperless route. Computerworld (Sept. 4,1995).

7. Patent Watch. Computerworld (Feb. 24, 1997), 110; see www.comput-erworld.com/news/1997/story/0,11280,14130,00.html.

8. Raghupathi, W. Towards a global healthcare system. Siliconindia (Oct.1997), 28–30.

9. Sheldon I. Dorenfest & Associates, Ltd. Clinical Systems Fuel IT Spending;see www.healthdatamanagement.com/html/ExpertStory.cfm?DID=8959(Aug. 15, 2002).

10. Tan, J. and Sheps, S. Health Decision Support Systems. Aspen Publish-ers, Inc., Gaithersburg, MD, 1998.

11. Wallace, B. Spinal tap heals hospital: Backbone technology deliverscompetitive edge. Computerworld (May 5, 1997), 51, 57.

Wullianallur Raghupathi ([email protected]) is anassociate professor of information and communication systems in theGraduate School of Business Administration at Fordham University,NY.Joseph Tan ([email protected]) is an associate professorin the Faculty of Medicine in the Department of Health Care and Epidemiology at the University of British Columbia, Vancouver, BC,Canada.

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