Health-Care Providers Pump More Dollars Into I.T. - InformationWeek

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Health-Care Providers Pump More Dollars Into I.T.

After years of single-digit growth, U.S. health-care providers plan to increase their IT budgets by more than 10% a year between now and 2006, according to a survey released last week by market-analysis firm Datamonitor.

Industry and government pressure to improve the quality of patient care and reduce medical errors are key factors driving the increases, says Panni Kanyuk, a Datamonitor senior health-care analyst who worked on the study. "Information technology is an important tool in improving patient quality of care," she says, "and we're seeing this resonate in the market." Still, Kanyuk says, the industry spends only 2% or 3% on IT versus 10% spent by the financial-services sector.

chartFor its two-part study, "2004 IT Strategy In U.S. Healthcare Providers" and "2004 IT Infrastructure Trends In U.S. Healthcare Providers," Datamonitor surveyed 100 U.S. health-care decision makers about their companies' IT investment plans.

Of those surveyed, 66% say they expect their IT budgets to grow more than 10% annually between 2004 and 2006. Datamonitor also finds that high-midtier health-care institutions, those with 500 to 999 beds, are the most aggressive and advanced in IT investments, with a focus on technologies such as remote access for clinicians, inpatient and outpatient systems integration, and picture archiving and communications systems.

Low-midtier providers--those with 250 to 499 beds--are focusing their IT efforts on integrating clinical information into a single enterprise-information repository.

The largest providers--those with 1,000 beds or more--are putting their technology efforts into computerized physician order-entry systems, electronic medical-records, and lab, radiology, and pharmacy systems. "Providers of all sizes have electronic medical records [and] physician order-entry systems on their minds, but the largest providers are taking the biggest steps with those technologies," Kanyuk says.

That's the case at Sutter Health, an operator of 26 hospitals with nearly 5,800 beds in Northern California. It expects to see IT spending increase by 10% annually over the next few years as it rolls out electronic medical-records systems.

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