Report Shows Inability to Invest in IT Could Impact Financial Outcomes
CHICAGO--(BUSINESS WIRE)--Higher-rated hospitals with more resources dedicated to quality-focused initiatives may achieve growth in volumes and market share, improved payer arrangements, and cost reductions, according to a new report by the Healthcare Financial Management Association (HFMA) and GE Healthcare Financial Services. Hospitals that cannot differentiate themselves in fragmented markets may fall further behind. Therefore, with the high cost of IT and its notorious high rate of failure, nowhere is a healthcare executive's abilities tested more than planning a capital expenditure that involves technology.
Today's Technology Spending Trends: Strategies for the Healthcare Executive indicates that strategic investments in technologies such as electronic prescribing tools and computerized provider order entry systems will likely influence a hospital's long-term competitive position. The report is the second installment of the Financing the Future III series and focuses on the state of healthcare technology spending today, near and long-term trends, barriers to IT adoption, and expert views regarding funding for IT initiatives.
"Today's healthcare executive cannot wait for policy changes, significant infusion of government funds, or other external sources of support to pursue investments like electronic health records," said Richard L. Clarke, DHA, HFHMA, President and CEO, HFMA. "If they hesitate, they may be putting themselves at financial risk."
With little expectation that government or private payers will be providing the needed financial assistance for acquiring and supporting these technologies in the near term, hospitals are finding they will have to generate revenues by leveraging resources on hand to improve clinical and business processes.
"While the healthcare industry is embracing the concept of better healthcare through technology, widespread implementation of these initiatives remains slow," said Jeffrey A. Malehorn, President and CEO of GE Healthcare Financial Services. "Providers, payers, government, and employers must come together to realign incentives that support technology investment."
Key points emerging from the report include:
- Studies indicate many facilities allocate as much as 20 percent to 30 percent of total capital spending on healthcare IT. Yet many of the financial benefits of hospital IT---decreased need for repeat tests, lower readmission rates, and shortened length of stay---are realized by healthcare purchasers such as Medicare/Medicaid, insurers and consumers, not hospitals.
- IT investments and upgrades are widely seen as essential to efficiencies and quality of care---enhancing patient safety, decreasing medical errors and reducing the cost of healthcare overall.
- Lack of hospital spending on IT is largely attributed to relatively little federal financial support and a payment system that does not provide adequate incentive for widespread, rapid adoption of innovations, even though these innovations have shown to improve patient care. For example, hospitals that equip patients with state-of-the-art devices for home care can reduce overall expense and improve outcomes, but they realize less net revenue as a result.
For more information or to view the second report in HFMA's third Financing the Future series, visit www.FinancingtheFuture.org. About Financing the Future III
Since 2003, HFMA's Financing the Future project has given healthcare providers the information they need to help their organizations have the resources necessary to provide safe, high-quality care for their communities. The project began with a series of reports highlighting strategies hospitals and other healthcare providers could use to improve access to capital.
With Financing the Future III, HFMA, in partnership with GE Healthcare Financial Services, sets out on perhaps its most ambitious effort to date: helping providers navigate key industry trends that affect hospitals' capital position and ability to fund important future initiatives. For each trend, a report will identify the current state and implications for the future.
For more information about Financing the Future III and to access the complete archive of project reports, visit www.financingthefuture.org
About the Healthcare Financial Management Association (HFMA)
HFMA is the nation's leading membership organization for more than 34,000 healthcare financial management professionals employed by hospitals, integrated delivery systems, managed care organizations, ambulatory and long-term care facilities, physician practices, accounting and consulting firms, and insurance companies. Members' positions include chief executive officer, chief financial officer, controller, patient accounts manager, accountant, and consultant. HFMA offers educational and professional development opportunities; information on key issues affecting healthcare financial managers; resources, such as technical data, checklists, and research reports; and networking opportunities---all of which provide our members with the practical tools and ideas they need to ensure career and organizational successes. For more information, visit HFMA's web site at www.hfma.org
About GE Healthcare Financial Services
GE Healthcare Financial Services is the premier provider of capital, financial solutions, and related services for the global healthcare market. With $16 billion in assets, GE Healthcare Financial Services offers a full range of financing capabilities from equipment leasing and real estate financing to working capital lending, vendor programs, and acquisition financing. With a dedicated focus and a deep knowledge of the healthcare industry, GE Healthcare Financial Services collaborates with customers to create tailored financial solutions that help them improve their productivity and profitability. For more information, visit www.gehealthcarefinance.com.
Contacts
HFMA
David Opon, 708-492-3407
[email protected]
or
GE Healthcare Financial Services
Deia Campanelli, 312-441-6169
[email protected]
Britta Kons
GE Healthcare Global Services
[email protected]
1-203-400-1892