Since HIP Health Plan of New York began reinventing itself with technology, almost all of its investment in IT has gone into hiring the right people and buying new products, not researching them. "We decided not to spend a lot of money on R&D. We hired instead," says Dan McGowan, president and chief operating officer. "They were our R&D. We hired people with lots of experience, so instead of looking at six to 10 products, they would look at two from the get-go and know those were the ones worth paying attention to."

But now that HIP has become an industry leader, executives have decided to spend more on research and development. "We're now ahead of most of the industry, but we want to stay ahead," CIO John Steber says. HIP is doing R&D on both business products and medical tools. "We don't really separate business from technology; it's all the same," Steber says.

The company has even started registering for patents. One of those registrations is on a small CD-ROM, the size of a business card, that will be used by members as an ID when they go to the doctor or hospital. When put into a computer, the disk will link to HIP's Web site, providing policy information and allowing for easy access to patients' medical records.

HIP has also invested in a network-enabled scale manufactured by Alere Medical Inc. This clever device not only keeps patients healthy but helps protect HIP's bottom line. Patients with congestive heart failure stand on the scale twice a day. It asks them a few quick questions such as "Are you short of breath today?" Patients answer by pressing a "yes" or "no" button on a controller wired into the scale, and their weight and answers are sent by built-in cellular phone to HIP's systems. If the data falls out of certain healthy parameters, HIP nurses contact the patient, the doctor, or family members as necessary to make sure proper care is given.

The solution to patients' medical problems might be as simple as giving them a new drug or adjusting their diet. If that's the case, patients can avoid trips the emergency room, saving HIP money. Every time a patient makes an unnecessary trip to the emergency room, it costs HIP between $200 and $500, says Dr. Ronald Platt, HIP's senior VP for medical affairs and chief medical officer. And if they're admitted, costs surge up to a minimum of $14,000.

The scales are deployed to about 600 people, with about 200 more rolled out each month. In just six months of operation, Platt estimates the scales have saved the company close to $2 million in administration costs. Says Platt, "It's really to my advantage to keep the patient healthy."

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