Cutting-edge technologies are driving up the cost of delivering healthcare, but can investing in them bring a return on investment that ultimately reduces patient expenditures?
Three of these technologies have intriguing financial implications:
Health Information Technology
HIT systems use data to give healthcare providers instant access to patient information and to communicate updates to other healthcare entities, including managed care plans and insurers. These complex systems are already in place in most medical organizations. Their benefits include the following:
Increased patient safety and efficacy, as providers are equipped with essential information on which to base decisions. System-generated alerts ensure that physicians get the information they need, such as a warning about potential adverse drug reactions. These systems also save providers money on paper, filing, printers and antiquated forms of information storage. It is estimated that this form of financial savings could be worth $1 billion per year to the country’s hospitals.
Time savings and cost efficiencies brought about by the automated dissemination and delivery of critical information that would otherwise have to be obtained by doctors and administrators and, in many cases, would not be available at time of need. The potential savings nationally could exceed $77 billion per year. Consider that doctors now spend less than a third (27%) of their time treating patients and just as much time entering patient notes into electronic health records. The newest technologies would give the doctors more time to spend with patients.
Reduced hospital stays, as doctors would be able to make quicker decisions, and wait times for information would not account for lengthening hospital stays.
Improved chronic disease management, as systems consistently record test results, monitor signs through IoT devices (e.g., blood pressure tests taken at home), analyze data and transmit information to providers. HIT systems could save healthcare institutions millions per year and avoid thousands of deaths.
Because of the high cost of these systems, net savings in terms of the above benefits are relatively low, but they begin to rise steeply after 15 years. Government intervention and assistance is likely necessary for these additions to the healthcare system to work optimally for patients.
Supply Chain Technologies
Analytics and software tools designed to fine-tune inventory tracking, increase efficient allocation of resources and eliminate waste are expensive initial investments but with high expected return on investment. Wireless radio frequency identification (RFID) tags enable administrators to track use throughout the lifecycle and ensure timely and appropriate deliveries of just the right quantities of needed items. A leading source of costs for providers has been stockpiling necessary items to avoid being without when necessary.
Medical equipment spending accounts for an inordinate percentage of providers’ resources, but competition (especially in highly populated areas) demands it. Many newer technologies can capture and communicate patient data through IoT and Bluetooth technologies, as well as provide state-of-the-art effective treatments.
Providers have a lot to consider with machinery, including the cost of procurement, installation, warranties, maintenance, upgrades and training. Will the equipment improve care and efficiency, and will it attract patients and drive revenue? What if new equipment adds such value that it makes older equipment obsolete? Will the new equipment communicate with current HIT technologies, and will it be future-proof?
With all of these technologies, to invest or not is a question with no easy answers. What is certain is that highly educated professionals in healthcare administration are vital to the solution. The Lamar University MBA in Healthcare Administration online program provides extensive training in healthcare economics, strategy and information systems so that graduates are prepared to contribute to informed technology investment decision-making.
Learn more about Lamar University’s online MBA in Healthcare Administration program.