What is your opinion on why providers see IT as non productive capital? - Scott MacLean 3/5/2014

Sept. 30, 2015

There are really at least two elements to this. The first one is historical: historically, in a fee-for-service reimbursement system context, capital investment was focused on areas that could directly or indirectly increase revenues to a patient care organization. Examples include facility construction and expansion, the purchase of diagnostic imaging equipment such as CT, MR, and PET modalities, and even investments in hospital cafeterias and landscaping, to attract people to use services and stay on medical campuses. To the extent that early investments in information technology were seen as “productive,” they were primarily related to the business office or what has come to be known as revenue cycle management. Electronic health records, in their early forms, were primarily about storing clinical information that did not directly improve finances for any patient care organization.

Things are different now in a number of ways. For one thing, advanced electronic health record systems, fully fitted out with clinical decision support capabilities, and linked to business intelligence, analytics, clinical performance (e.g., dashboards and report-writing), and other capabilities, are finally starting to be seen by c-suite executives and patient care organization boards of directors as falling into “productive” categories, even if the ROI is always going to be softer than it would be for facility construction, diagnostic imaging modality purchase, or even revenue cycle management software solutions.

The second element of this has to do with meaningful use- and healthcare reform-related mandates. Given that hospitals and physicians are now being required to adopt EHRs, to reduce avoidable readmissions, and to document clinical outcomes, investment in IT is being seen differently by c-suite executives and board members. This is an ongoing evolution rather than a revolution, but with policy and regulatory mandates hitting patient care organizations from all sides, the conceptual environment around IT investment is gradually changing.

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