Taking A Look At The Value Of Health IT

Posted on by Frank J. Rosello

There’s been a whole lot of capital invested in health information technology these past few years. And some people – especially those who are in charge of spending more of it – want to know whether it’s money well spent.

It may seem obvious to some in this industry, but it’s still a question that bears asking: Is the value of health IT self-evident at this point, five years after HITECH? Or is the jury still out?

“I think in the United States we’ve passed a tipping point,” says John Hoyt, executive vice president of HIMSS Analytics. “People understand that IT can create value.”

The catch? “It’s not automatic.”

Instead, recognizing and reaping the value of IT systems comes only with careful planning – and commitment to seeing project through, says Hoyt.

“It has to be designed for, as part of implementation and post-implementation optimization,” he says.

And after install, even when it’s there, that value can sometimes be hard to quantify, says HIMSS Analytics Senior Director of Research Jennifer Horowitz: “I would argue that people aren’t doing a very good job of measuring the value they get.”

In July 2013, HIMSS unveiled its new Health IT Value Suite, a trove of quantitative and anecdotal data meant to help healthcare stakeholders assess technology’s value. Its 1,000 case studies are meant to offer evidence that health IT works – even if the notion of value could have 80 different meanings.

That fact is illustrated by the Value Suite’s STEPS taxonomy – the acronym stands for satisfaction, treatment/clinical, electronic information/data, prevention/patient education and savings – which lays out dozens of documented real-world examples of the myriad ways health IT has led to improved care and financial gains.

“Pinpointing the clinical and financial impact of health IT investments is complex,” said Carla Smith, executive vice president of HIMSS, at a press conference this past summer announcing the suite’s launch.

“The value of health IT is demonstrated in many ways; some may be unique to an organization, while others may be highly adoptable and scalable,” she said. “HIMSS created the Health IT Value Suite to organize and create a common vocabulary to identify, classify and discuss the many known examples of health IT value, to create a comprehensive library of case studies from which we can research impact, and to educate all on the findings.”


One of the challenges, of course, is that different types – and different sizes – of providers arrive at value in different ways. A fully tricked-out academic medical center is in a different position, after all, than a tiny rural physician practice.

“The leading-edge institutions are investing the effort to measure before they implement and after they implement, and they’ve got demonstrable evidence,” says Hoyt.

Indeed, when HIMSS is bestowing Davies and Stage 7 Awards to top-notch facilities, part of the requirement to qualify is that the provider “present to us evidentiary data that quality has improved, efficiency has improved, something,” says Hoyt.

That’s not necessarily a return on investment, however.

“Quality has a measure of value, financially, but it’s harder to derive,” says Hoyt. “It’s not mathematical.” It’s not necessarily as easy, in other words, as installing a PACS system and immediately reaping the efficiency benefits of getting rid of film, for instance. “That’s why we use the term ‘value,’ and not ROI.”

At the same time, just because an organization is implementing an EHR or other system, “that doesn’t mean they’re getting value,” he says. “That just means they’re going along with a wave.”

For instance, there are big differences between the ambulatory and inpatient spaces in terms of how immediately they recognize value. “It might be a little harder for the docs,” says Hoyt with a laugh. “Because they’re not as big and screwed up as a lot of hospitals.”

More to the point, it’s critical that organizations be fully committed to health IT transformation to see tangible improvements in their care delivery. It’s not beneficial to merely dip a toe in the water with a rudimentary EHR; you have to be in it to win it.

Hoyt points to evidence from HIMSS Analytics showing that value-based purchasing scores correspond closely to where an organization sits on the HIMSS EMR Adoption Model.

“Fundamentally it shows that there’s not a big payoff in quality until Stage 6,” says Hoyt. “Because you’re still building the pieces. You don’t get the payoff.”

“You can see that Stages 2, 3, 4, 5 the scores are sort of not changing much,” say Hoyt (see chart below). “Then at 6 there’s a bump. And at 7 there’s a big bump up.”

It’s just another indication, he says, that there is value in health IT.

“You do get quality improvements, you do get efficiency improvements. But it doesn’t really happen until probably Stage 6. Because you’re still building the bridges. And your traffic volume doesn’t improve until the thing is damn near finished. So that’s really the message.”


The value of health IT isn’t just being wondered about here in the U.S. The question is being asked “all over the world,” says Hoyt. And in many countries, “there’s skepticism whether hospitals should even bother with computerized electronic medical records. In some places in Europe, in Asia, in South America, they’re very far behind us in the hospital space.”

The U.S., especially post-meaningful use, is “showing evidence that quality improves” with health information technology.

That’s come after years of evolving relationships between CIOs, on one hand, and CEOs and CFOs on the other.

“It is constantly changing,” says Hoyt. “Let’s back up to the mid-’90s. Having a CIO in the executive suite was just kind of cutting-edge for big institutions: ‘What’s this IT techie dude doing in here with the CEO and vice president? What’s this person doing at our table?'”

As if to illustrate this evolution, the HIMSS Leadership Survey each year asks industry professionals, among many other questions, what’s their number one barrier to success. For many years running, the number-one answer was budget.

Then, for the past few years, it wasn’t budget – it was the availability of skilled resources

“That meant the hospitals were willing and able to spend the money, and the CIOs got it, but they just didn’t have enough resources, enough people with the skills they needed.”

For the CIO, who traditionally had to fight and scrape for money to fund the projects he or she knew needed to be done, to suddenly have that funding – to have a C-suite, finally, that recognized technology’s value without the need for arm-twisting – must have been a welcome surprise.

Now, of course, with “Medicare tightening and bundled payments and the concern for the future,” budgets have moved back into the top spot for CIOs’ concerns.

“I’ve gotten the sense that at the big hospitals, the big investments have been made as far as capital expense,” says Hoyt. “Now the hospitals are saying, ‘Oh, my God. This is a perpetual operating expense that’s way beyond what we used to have.’ And that’s probably the CIO’s biggest problem right now – cutting operating expense.”

Still, the big investments have been made, at least. Technology is by now well-ensconced in most hospitals. Now executives want to see it truly prove its worth.

The operating expense of some of these systems is astronomically expensive. That, in part, is leading to a spate of recent “mega mergers,” says Hoyt – Community Health Systems and HMA, Tenet and Vanguard – to help make the most of things.

“I think we’re going to keep seeing this: The number of hospitals per integrated delivery systems is going to continue to skyrocket,” says Hoyt. “It’s like banking in the ’90s. A five- or six-hospital IDS is pretty cute, but what we really need is 200 or 300 hospital systems to drive efficiencies.”

In the meantime, IT pros continue to enjoy strong influence at many hospitals. They’re the ones best positioned to make the case for technology’s value – and make sure things run smoothly enough that that value is borne out.

Senior IT execs “play a key role in contributing to overall business strategy at their organizations,” according to the 2014 HIMSS Leadership Survey, published in February.

Nearly two-thirds of respondents reported being a member of their organization’s “leadership team,” the committee that “drives overall organization strategy and direction” of the provider’s plans.

Meanwhile, senior IT executive were asked to identify the responsibilities they take on regularly. The top three responses? Contributing to overall business strategy (87 percent), enabling the CEO or executive team to improve management through IT (85 percent) and driving value from IT investments (85 percent).

Article written by Mike Miliard

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