How Information Technology Can Reduce the Cost of
By Chuck Kosmider
Health care is an essential aspect of society. Health care services
promote better living through medical, dental, pharmaceutical and nursing professions.
Unfortunately, though, health care is also an expensive commodity. Prescription drugs
can be very costly, due to the need to undertake much research and development. New
medicines, new procedures and new equipment contribute to the high costs of health care.
However, new technologies can also lead to cost savings and efficiency. And so the
problem of expensive health care can be solved by adequate use of information
technology in the health care system.
The integration of information technology to health care, or the use of software and
hardware to process information more efficiently, can have a strong impact on cost
reduction. Less expensive health care means accessibility and availability of health
services to everyone. Here are some ways by which IT can help lower the costs of health
• Health Information Technology HIT provides the umbrella framework of
comprehensively managing health related information. HIT, in general, is seen as
one of the most promising tools for enhancing the quality, efficiency and safety of
the health delivery system. HIT is described as the hardware and software that
process information pertinent to storing, retrieving, sharing, and use of healthcare
knowledge. This knowledge is then used for more effective communication
among healthcare professionals, and for better decision making. This includes
maintaining health records online, so doctors can more easily access information
when the need arises.
• Internet Research for Home Health Care If a patient communicates with a
physician through the Internet, it could reduce the percentage of in-office visits.
People will reduce instances of having to go for an actual visit to the clinic, saving
time and money. Thirty percent of health care costs are spent on clinical
inefficiency and redundant administrative costs. By communicating online, the
healthcare system can reduce costs by streamlining and merging back office
administrative processes of plans and providers.
• Approval of Electronic Health Records Prescription error is common
in today's health care setting, and this can prove to be serious or even fatal. The
use of online health records can help significantly reduce errors, and therefore the
cost of healthcare. Such as system will allow the physician to enter notes about a
patient's care and condition into a computerized record. Therefore, it is no longer
necessary to have to physically retrieve a patient's charts from office files. The
electronic health record also prompts providers to prescribe generic drugs instead
of more costly brand name medications, which gives a patient more flexibility in
choosing the brands that are affordable to him. The record can also instantly
identify harmful drug interactions and possible allergic reactions to prescribed
• E-Prescribing This is the ability to send an accurate, error-free and
comprehensible prescription directly to a pharmacy from the point-of-care. This
further reduces possible mistakes and errors arising from buying medicine from
over the counter or incorrectly filled prescriptions.
Combining the efficiency of computers and the client centered health care system would
pave the way to better health and improved sickness prevention. These innovations show
how health care is fast adapting to the computer age, thus reducing human error,
decreasing transaction costs, and improving efficiency.
HFMA: More than half of hospitals losing money
April 15, 2009
Fifty-four percent of hospitals had negative total margins during the first-quarter of fiscal
year 2009, including 80% of hospitals with 500 or more beds, according to a nationally
representative survey by the Healthcare Financial Management Association. Eight in 10
hospitals report declines in non-operating revenue since the economic recession began
last summer, and seven in 10 report fewer days cash on hand. Four in 10 hospitals report
a decline in net patient revenue and investment losses of 25% or more. The findings are
consistent with data reported last month by the AHA.
Will Medical Technology Reduce Healthcare Costs?
Syndicated from Medicine and Technology by Joseph Kim, MD, MPH by mdjosephkim |
Sat, 08/08/2009 - 8:06pm | original article
post a comment | comments (0)
This is a guest post by Adrienne Carlson.
Will Medical Technology Reduce Healthcare Costs?
While the debate over the pros and cons of President Obama’s healthcare plans and
reforms rage on, other measures are being taken to decrease the overall cost of providing
healthcare to people in the long run. Companies
that manufacture medical technology are jumping on this bandwagon with their
inventions and innovations, with claims that their products will help reduce healthcare
costs in the long run.
Medical technology businesses are already testing out digestible chips that check if
you’re taking your prescribed medication correctly. The chips will be attached to your
medication, and using a sensing device worn on your skin, will be able to tell doctors if
you are getting the right dose of medicine and also read them your vital signs. The whole
system works using wireless technology, taking advantage of the vast infrastructure that is
already being used by mobile phones and notebook computers. The technology is
supposed to allow doctors to monitor you even though you are at a distant location and to
provide medical attention if your signs seem to show some anomaly.
The entire premise of this concept is based on the fact that hospital visits and hospital
stays because of unnoticed and hence untreated symptoms contribute to a large
percentage of healthcare costs. So if this cost can be reduced using this technology, it
augurs well for the people who really need healthcare to be affordable. But, even though
there may be some truth in this supposition, the fact remains that:
• The initial cost of the technology is going to be pretty high, especially when it is in its
infancy and still in the post experimental stage.
• Only those who can afford it are going to buy it, given that they believe it will work.
• Insurers may not be willing to back this technology on the grounds that it is unproven
and expensive, just as they refuse to cover other experimental treatments like bone
• If the treatment is not covered by insurance, how does it help bring down the cost of
• Most hospitals and doctors would not want to invest their time and effort in technology
for which they are not reimbursed by insurance companies.
While it is true that such technology does help improve the quality and effectiveness of
healthcare for those who can afford it, it is arguable if it will help bring down
healthcare costs, even in the long run.
This guest article was written by Adrienne Carlson, who regularly writes on the topic of
radiography technician salary. Adrienne welcomes your comments and questions at her
email address: firstname.lastname@example.orgTrouble viewing the contents? Visit
MedicineandTechnology.com by Dr. Joseph Kim. Follow @DrJosephKim on Twitter.
Articles Cont. Below
IBM Chief Pitches Obama on $30 Billion Investment in IT
By Darryl K. Taft
Article Rating: /1
Though he's not talking about the same kind of bailout the U.S. auto and finance
industries have gotten, IBM CEO Sam Palmisano has told members of the Barack
Obama transition team that a $30 billion government investment in the IT industry
could lead to the creation of more than 900,000 jobs in areas such as broadband
access, health care IT and upgrading the electrical grid.
The Wall Street Journal reported that IBM CEO Sam Palmisano has advised the Obama
team that a government investment of $30 billion could create more than 900,000 jobs
for U.S. workers.
Palmisano addressed Barack Obama's transition team in December in response to a
request from the president-elect's advisers on the job-creating capabilities of the IT
industry. In response, IBM's Palmisano delivered a presentation to the transition team
stating that a $30 billion investment in expanding broadband access, computerizing
health care records and improving the electrical grid could create more than 900,000 U.S.
jobs, the Journal report said.
The Wall Street Journal reported that IBM worked with a Washington think tank known
as the Information Technology and Innovation Foundation to evaluate potential job
development possibilities in three areas: broadband, health care IT and "smart grid"
According to the Journal, the IBM/Information Technology and Innovation Foundation
research said that investing $10 billion in broadband networks to provide high-speed
Internet access to areas that lack it would create 498,000 new jobs in a year, while a $10
billion investment in health care IT could create 212,000 jobs. In addition, IBM said a
$10 billion investment in upgrading the electrical grid would lead to the creation of
239,000 additional jobs.
Moreover, IBM officials said Palmisano recommended the use of green data centers by
the government, including converting existing data centers to green ones.