1. By Wullianallur Raghupathi and Joseph Tan
Strategic IT Applications in
HEALTH CARE Information technology plays an increasingly central role in
the U.S. health care industry. A survey by Sheldon I. Doren-
fest & Associates of Chicago estimated IT spending on health
care in 2002 would be $21.6 billion [9]. Further exponential
growth can be expected as the industry implements further
large-scale electronic medical record keeping; provides remote
diagnostics via telemedicine; upgrades hospital information
systems (HISs); sets up intranets and extranets for sharing
information; and uses public networks, including the Internet
and community health information networks, to distribute
health-related information.
Accordingly, using IT in a applications are concerned primar-
strategic and innovative manner to ily with improving the efficiency of
support health-related decision operational tasks, rather than the
making represents a serious chal- effectiveness of strategic and inte-
lenge for health care organization grative decision processes. In this
management, as well as for systems sense, strategic IT focuses on the
developers. Traditional, nonstrate- information requirements of ad
gic IT focuses on information pro- hoc and poorly structured deci-
cessing, mostly for well-structured, sion tasks. The applications con-
routine task situations and opera- centrate on giving an organization
tional work processes (such as an IT-based strategy for meeting
patient data management systems competitive challenges (such as by
for streamlining patient admis- using emerging Web technologies
sions and bed assignments). Such to integrate health care organiza-
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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2. tions internally and externally). health care delivery and address whether for internal or for external
Even so, all stakeholders, issues relevant to developers of the integration. Several key for emerging
including profit and non-profit technologies. technologies serve to illustrate this
health care providers (such as hos- conceptualization of strategic IT.
pitals, clinicians, health associa- Strategic IT Framework Computerized patient records.
tions, and private health agencies) Two key dimensions of systems One notable trend in health care
and payers (such as insurance integration (see the figure) may be IT is the move toward a standard-
companies and health mainte- used to develop the framework: ized CPR system with common
nance organizations, or HMOs), data formats. Defined as electroni-
as well as employers, practitioners, Internal integration. The degree cally stored information about
public health officials, educators, to which systems and technolo- individuals, uniquely identified by
systems developers, and con- gies are integrated with one an identifier, CPR technology
sumers, must prepare for coming another within an organization; entails the capture, storage,
changes in these technologies and and retrieval, transmission, and manip-
applications. External integration. The degree ulation of patient-specific health-
Health care and computer pro- to which systems and technolo- care-related data, including
fessionals must concern them- gies interface with outside orga- clinical, administrative, and bio-
selves with how changes in IT nizations and agency computer graphical detail [8]. The intent is
might affect them as both facilita- systems. to eliminate the need for data
tors of IT application develop- duplication, thereby reducing the
ment and as health care Computerized patient record cost of maintaining multiple data-
consumers. As IT facilitators, they (CPR) systems, document man- bases. For example, an intranet-
must focus on the design and agement systems, data ware- enabled CPR system installed in
development of applications to houses, and intranets all 1997 at Cabarrus Family Medicine
capture, organize, store, normal- potentially enhance the informa- in Concord, NC, a practice with
ize, and present health informa- tion sharing and integration of approximately 26,000 patients in
tion in new ways, as well as replace internal systems in health care four clinics, was expected to free
and integrate existing systems with organizations. These technologies up record-keeping time for physi-
emerging technologies. As con- are used to help eliminate data cians and residents alike by grant-
sumers, they must focus on the redundancy and inconsistency ing access to patient records
confidentiality of the doctor- toward achieving the paperless through standard browsers. Prior
patient relationship and the pri- sharing of data throughout an to the system’s implementation,
vacy of patient medical data, along organization. The Internet, along the practice’s physicians were
with the technology’s security, with extranets, networking, and reported to have spent up to 40%
usability, and political and societal ATM technology, can be used to of their time going through paper-
effects. deliver integrated solutions, link- based patient records to meet
In light of these changes, health ing with outside organizations HMO requirements.
care and computer professionals and agencies. As patients consult specialists
and consumers of health services It is difficult, if not impossible, out of network and out of state,
need a framework for conceptual- to definitively classify each emerg- many health care providers imple-
izing and understanding strategic ing technology as belonging exclu- ment some aspects of this technol-
IT applications. Our purpose in sively to either the internal or ogy on a wider scale through smart
presenting the following integra- external sets of applications; for cards similar to drivers’ licenses
tive framework is twofold: inform example, evolving health/medical and credit cards for storing patient
health care consumers as to which informatics and telematics may be information. The information can
technologies play a critical role in considered strategic IT support, be updated periodically, and
COMMUNICATIONS OF THE ACM December 2002/Vol. 45, No. 12 57

3. patients can take them wherever they go for medical matic results, allowing the center to reduce its staff
care. Combined with Web-based retrieval, smart cards and increase revenue by handling external record
help facilitate the portability of and access to online requests directly.
information. St. Vincent’s Hospital in Birmingham, AL, began
The West Palm Beach Veteran’s Administration in 1995 using a new image-based client/server system
Medical Center in West Palm Beach, FL, began in to reduce the time needed for patient registration and
1995 to pare down all its medical records and associ- insurance verification, eliminate some business office
ated paperwork to approximately 200 clinical and staff, increase registrations, begin to sort all patient
1,000 administrative electronic forms accessible records and insurance information online, and reduce
through computers in screening rooms and nursing delayed payments into accounts receivable [3]. The
stations [6]. These forms enable physicians to point system converts paper-based records into electronic
and click to enter the results of any type of examina- images; this data, in turn, was merged with data from
tion or to issue prescriptions. The system has report- a mainframe-based HIS and other departmental, lab-
edly made it possible to substantially reduce the oratory, and pharmacy
Medical Center’s physical systems to form a compre-
file storage costs. Internal Integration hensive CPR system.
Document management The Johnson Medical
and data warehouses. Center in Johnson City,
Under financial pressure TN, determined in 1996 it
from managed-care med- Computerized Patient Records Health
Information/ Web-based Technology/ would need a data ware-
Document Management
ical services and insurers, Data Warehouse Telematics Network/ATM house to enable it to study
health care institutions historical records of patient
increasingly turn to such treatments, especially to
technologies as document spot trends and anomalies.
External Integration
management systems and The goal was to generate
data warehouses to collect report cards about physi-
and administer clinical and financial data online. An integrative strategic cians, thereby measuring the cost
Document management technology includes docu- IT framework. of each one’s services at the hospi-
ment imaging, workflow, electronic forms processing, tal in terms of types of treatment
mass storage, and computer output to laser disk. Data performed, time spent with patients, and other fac-
warehouses involve large stores of data for strategic tors. The data could be used to analyze the cost of
decision support; for example, an analysis of patient each treatment vis-à-vis the amount of money paid by
data can reveal patterns of symptoms related to spe- insurers.
cific diseases. In 1999, the U.S. Department of Defense planned
Hospital CEOs increasingly realize the only way to deploy what DoD officials said would be the largest
their organizations can compete in a health care mar- known medical data warehouse [2]. Called the Com-
ket dominated by managed-care providers is to learn puterized Executive Information System (CEIS), it
to manage their own information, knowledge, and was expected to eventually hold the records of more
documentation. Thus, many senior managers, as well than 8.5 million active members of the U.S. military
as physicians, nurses, and staff, seek quick and afford- health care system treated at approximately 115 hos-
able ways to tap available information banks of pitals and 461 clinics around the world. Beginning in
detailed patient records. Data warehouses are becom- 1995, it had already been converting its fixed-cost
ing crucial, as the industry moves from a business health care system to a managed-care model to lower
model based on revenue to one based on cost- costs and increase care for active military personnel,
outcomes information management. retirees, and dependents.
Many hospitals, both public and private, need doc- Web technology. In information-intensive societies
ument management to handle the paper-intensive like the U.S. , health care consumers need and want as
process of collecting and filing patient information; much information as possible concerning their con-
for example, the San Jose Medical Center in San Jose, sultation and treatment options and therefore increas-
CA, began in 1992 to address the challenge of access- ingly demand access to relevant and personal health
ing medical records speedily and making record man- information. HMOs have added tens of millions of
agement more efficient by using a LAN to link its members over the past several years, driven by com-
document management software, relational databases, petition and the potential for profit. From a provider
and imaging equipment. Management reported dra- perspective, they need information to analyze the out-
58 December 2002/Vol. 45, No. 12 COMMUNICATIONS OF THE ACM

4. comes and costs of various treatment plans. The Inter- multiprovider organizations vie to provide integrated
net plays a crucial role in bridging the gap between delivery of health services along the entire care con-
health care providers and consumers by making avail- tinuum; for example, the Orlando Regional Health-
able the required information. care System in Orlando, FL, began in 1996 to build
There are likely many examples of how the Inter- an integrated delivery network, a form of one-stop
net provides relevant information to the various shopping for all types of health service in response to
health-system constituencies, including consumers, its need to reduce costs while continuing to market its
physicians, and health care managers. A notable strat- services.
egy for an HMO to provide value-added customer On the other hand is virtual health care, or net-
service is to give users, including patients, physicians, works of coordinating partners in which each one
and hospitals, access to online insurance service data; does only what it does best. As each partner’s infor-
for example, providers and recipients of a service may mation needs are often similar, they tend to invest in
track their patients’ insurance claim processing via the distributed, client/server networks and OO technol-
Web. The advantages of electronic filing of insurance ogy to deliver the necessary links. From a health-orga-
benefits and claims include reduced costs for the nization perspective, the closest thing to a health
HMO and its network of hospitals, physicians, and network is the electronic data interchange hospitals
corporate clients, while improving access and usability employ internally among their admissions, clinical,
for its customers. It may also reduce agency and labor and accounting departments, as well as externally with
costs while helping provide insights into health care insurers. In some cases, hospitals have given admitting
trends and medical practices. physicians online terminal-based access to patient
Blue Cross/Blue Shield of Massachusetts began records; another alternative is a system that follows
offering Web servers and on-site multimedia kiosks in patients through each encounter with a medical pro-
1995 in Boston and Worcester, MA, facilitating access fessional.
to online insurance services; users have access to infor- Asynchronous transfer mode (ATM) network tech-
mation about Blue Cross services, as well as about nology handles multimedia applications without
health care and medical issues. The kiosks allow users degradation—an ideal service for integrated telemed-
to search and print physician and hospital database icine through its support for fast transmission speeds
information, peruse details about drugs and treatment and multiple traffic streams. Radiology and teleradiol-
alternatives, and learn the specifics of Blue Cross ser- ogy are among the applications that benefit from
vices. The kiosks also provide telephony links to cus- ATM technology; for example, Rush-Presbyterian/St.
tomer-service representative and member services. Luke’s Medical Center in Chicago began in 1995
One aim is to significantly reduce the cost of in-house developing an ATM backbone network for its radiol-
insurance support and education by directing ogy department. Meanwhile, St. Paul’s Hospital, a
employees and customers to the Web site and kiosks. teaching hospital at the University of British Colum-
A good number of HMOs also provide access to bia in Vancouver, uses an ATM backbone network to
insurance and health data via the public Web. connect its pulmonary research laboratory with physi-
To date, both intranet and extranet technologies cians outside the hospital. The network enables the
have been tapped by a growing number of hospitals two groups to study the same test results and speed
for in-house and external sharing and distribution of patient diagnosis (such as when diagnosing diseases of
medical information. Geisinger Health Care System the lungs). The hospital wants to make it possible for
in Danville, PA, was described in PCWeek as an indus- researchers in the laboratory and physicians located
try leader by leveraging IT networks and intranets to elsewhere to collaboratively view slides and X-rays,
reinvent the health care delivery process [5]. Its system trade data, and compare findings online.
concept includes the extension of intranets for use by Medical informatics and telematics. Medical infor-
patients; for example, a service called Tel-a-Nurse matics (including medical telematics) is concerned with
allows patients to call in medical questions to be “the cognitive, information processing, and communi-
answered by nurses accessing relevant information via cation tasks of medical practice, education, and research,
the intranet. including the information science and technology to
Networking and ATM technology. The benefit of support those tasks” [1]. More broadly, it emphasizes
the technologies cited here can be augmented strate- clinical and biomedical applications of the various tech-
gically through electronic and digital networking—a nologies surveyed here with the added option of inte-
logical next step for health service delivery. Under- grating the clinical components either among
standing and developing the technology is critical, themselves or with administrative-type HISs. In this
especially from the perspective of managed care, as regard, the field of health/medical informatics and
COMMUNICATIONS OF THE ACM December 2002/Vol. 45, No. 12 59

5. telematics has evolved rapidly over the past several years. common ailments, including indigestion and aller-
A number of clinical applications employing artifi- gies, via telephone 24 hours a day. Responses are
cial intelligence, neural networks, and fuzzy logic based on the caller’s self-reported symptoms and con-
techniques are being developed to give physicians sultation history, along with the latest medical
clinical decision support. Dealing primarily with research. The system tracks the improvement or dete-
information used in medical decision making, they rioration of the patient’s condition during follow-up
aim to assist physicians and other medical experts in calls. An expert system designed to spot irregularities
diagnosis and treatment. Health decision support sys- in physicians’ bills was implemented in 1992 at For-
tems and more specifically clinical decision support tis Benefits Insurance Co./Woodbury in St. Paul,
systems and expert systems are used in many of these MN; it reportedly saves the company an estimated
applications [10]. Accordingly, we focus first on gen- $540,000 a year in incorrect billing [4]. LDS Hospi-
eral applications, followed by more specific expert sys- tal in Salt Lake City, UT, uses an automated patient
tem applications and more integrated applications; information system to detect adverse drug events,
our discussion of health telematics focuses mainly on including allergies, unpredicted drug interactions,
telemedicine, a key application. and dosage problems. The system reportedly flags
An example is an interactive videodisc system that adverse drug events 60 times better than its human-
helps enter personal health data to weigh the pros and practitioner counterparts.
The prospect of storing health information in
electronic form prompts questions about standards, ethics,
patient privacy, data confidentiality, and security.
cons of surgery as a treatment option. Such software Telemedicine is a key aspect of health telematics,
may promote shared decision making and promise connecting geographically dispersed health care facil-
improved quality of care without increasing costs. ities via videoconferencing, telecommunication, and
Richard Foster, MD, medical director of a 40,000- digital networks to perform long-distance medical
member HMO operated by South Carolina Blue diagnoses. One notable use of the technology is to
Cross/Blue Shield, implemented such a system in access patient records on film (such as magnetic reso-
1992. Patients and physicians who have used it report nance imaging) to perform remote clinical diagnoses
it enhanced their physician-patient relationships. and surgeries. The technologies two major benefits
Others trying similar programs include Massachusetts are lower cost of health care and online access to top
General Hospital in Boston, Dartmouth Hitchcock medical experts worldwide; other benefits include
Medical Center in Hanover, NH, the Veterans medical education and intercontinental health care.
Administration, as well as several regional Kaiser Per- Allegheny Health Education and Research Foun-
manente HMOs. In yet another example, Tufts Asso- dation in Pittsburgh, PA, began in 1994 to develop
ciated Health Plan of Waltham, MA, installed a high-speed, digital multimedia networks. The aim
homegrown PC-based system in 1992 to access data was to link major health care and teaching institu-
more efficiently. tions throughout Pennsylvania. NeuroLink, a net-
In the area of expert system-based applications in work of 20 domestic and six international sites
medical diagnosis and treatment, the Patent Watch connected to a central receiving station via public
section of Computerworld reported the issuance of a telephone lines expedites emergency neurosurgery
patent for a computerized system for more accurate consultations. Neurosurgeon Julian Bailes is reported
monitoring of the fetal heart during the human to have remotely diagnosed more than 100 patients
birthing process [7]. Data is fed into a rule-based and saved more than $500,000 in transportation
expert system and neural network that classify the sit- costs over several years. Affiliated institutions share
uation as normal, stressed, indeterminate, or omi- computerized tomography scans, magnetic resonance
nous. In another such application, a computerized images, X-rays, and other medical data. In a follow-
voice-response system provides medical advice for up phase of the project brain surgeons will be able to
60 December 2002/Vol. 45, No. 12 COMMUNICATIONS OF THE ACM

6. interact with medical students in Philadelphia while in the security of patient data. The prospect of storing
conducting surgery in Pittsburgh. The network has health information in electronic form prompts ques-
also been extended to the Medical Consultation Cen- tions about standards, ethics, patient privacy, data
ter in Cairo, Egypt, a clinic operated by Egyptian neu- confidentiality, and security. Lacking proper controls,
rosurgeon Amr Mansy. procedures, and policies, these systems might tempt
The telemedicine system at Pathway Health Net- unauthorized users to try to access and even misuse
work uses videoconferencing to link a number of hos- information associated with legitimate users. If such
pitals in the Boston area, fostering strong concerns are not addressed, the health care industry
physician-physician relationships across participating could be discouraged from exploiting IT, and health-
hospitals. Initially used to facilitate consultations care consumers will hesitate to share their personal
among physicians, another newer goal is to improve medical information.
delivery of patient care by lowering costs and increas- Overall, the U.S. health care industry’s strategic
ing market share. integration of IT promises to revolutionize health care
delivery while opening new areas for applications and
Conclusion research. c
The health care industry increasingly views IT as a
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ties; for example, integrated decision-support systems Wullianallur Raghupathi (raghupathi@fordham.edu) is an
can provide health professionals in distributed clinical associate professor of information and communication systems in the
settings online real-time histories of patients in master Graduate School of Business Administration at Fordham University,
NY.
patient index databases. Joseph Tan (josepht@interchange.ubc.ca) is an associate professor
These systems will also let physicians and hospital in the Faculty of Medicine in the Department of Health Care and
management track and analyze patient care histories, Epidemiology at the University of British Columbia, Vancouver, BC,
test results, and cost information. Typically, such Canada.
applications combine data warehouses, electronic data
entry, messaging, and GUI tools. The strategic use of Permissionuse is granted without fee copies of all orcopies of this work for personal or
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sion support, and remote consultation, as well as
expert knowledge in specific domain areas, promises
to help lower the costs of treating complex case-mix
groupings while improving the quality of the care
actually delivered [1].
However, these applications also reflect weaknesses © 2002 ACM 0002-0782/02/1200 $5.00
COMMUNICATIONS OF THE ACM December 2002/Vol. 45, No. 12 61