Healthcare CIOs Worry Medicare Cuts Will Harm IT Budgets

Computerworld — Proposed cutbacks in healthcare subsidies are weighing heavy on the minds of healthcare IT executives who are scrambling to beef up hospital security, electronic medical record systems and computerized orders that can reduce medical errors.

Those findings are contained in the results of a Web survey of 307 IT leaders in health care organizations conducted between Nov. 20 and Jan. 20 for the Healthcare Information and Management Systems Society. HIMSS is conducting its annual conference in Orlando this week, where the survey was announced. Cisco Systems Inc. sponsored the actual survey for the non-profit HIMSS.

"Health care costs are eating us alive in this country and the situation will get worse before it gets better," said John Wade, HIMSS board chair in an interview. Wade is also CIO at Saint Luke's Health System in Kansas City, Mo., where a variety of IT healthcare projects are in the works.

HIMSS estimates that US$2.2 trillion was spent on healthcare in the U.S. in 2005, a number that could soar by 28 percent in the next decade, Wade said. Meanwhile, President Bush is proposing reductions in federal health care programs, Wade noted, including a $97 billion reduction in Medicare spending alone by 2013.

Such cuts will undoubtedly put pressure on hospitals that are in the midst of multi-year programs to bolster IT systems, Wade said, including initiatives such as electronic medical records that can improve efficiencies and lower costs eventually.

The survey showed a "clear message that Medicare and Medicaid cuts impact IT investment," said Frances Dare, director of healthcare business solutions at Cisco. The survey found that 26 percent of respondents felt that lack of adequate financial support was the most significant barrier to a successful IT program at their organizations. More generally, managed care fee reductions and Medicare cutbacks were listed by 43 percent of respondents as the biggest of five business issues that would most impact healthcare in the next two years.

"We still have work to do to ensure IT is recognized as the powerful enabler of efficiency and better patient care that it can be," Dare added.

Despite concerns about future potential cutbacks, 75 percent of the healthcare IT professionals said they expected their budgets to increase this year. And 68 percent predicted an increase in the number of full time IT workers in the next year, although the majority said the increase would be small. HIMSS estimates through a database that it keeps that U.S. healthcare organizations spent an average of 2.24 of their total budget on IT in 2007.

The survey also found that one in four IT professionals had suffered a security breach in the last year. Meanwhile, identity management and security technologies were two of the top three technologies the respondents said they will implement for the first time in the next two years. Implementation of the RFID technology was the third technology of the three.

Current and recent investments in security systems are apparently strong. A total of 98 percent said they had firewalls in place on their hospital networks, with 83 percent using user access controls.