Marc Holland is program director of healthcare provider research at Health Industry Insights, an IDC company. He talked to Profit about technology trends in the healthcare industry.
Profit: What are the biggest technology challenges facing healthcare providers today?
Holland: Hospitals are exceedingly complex organizations, and providers need to respond to a lot of different demands. A hospital is essentially a confederation of a lot of individual businesses, each driven by different incentives. Each one has different cost parameters to deal with and different processes for delivering the services in its area of expertise. And yet, each one is very tightly interwoven into the overall fabric of the larger enterprise. In the case of UPHS, you’re dealing with multiple hospitals in one system. You can see how the level of complexity begins to increase geometrically. If you’re trying to do financial planning for an organization this complex, you need to have control and an understanding of what drives costs and revenue at a very granular level.
Profit: When healthcare companies are looking for budgeting solutions, what should they keep in mind?
Holland: The structure of the underlying data management and database should be highly flexible and able to accommodate a lot of unique qualities in the various entities where you’re tracking costs and doing budgeting. For example, the criteria you would use to do cost accounting in one clinical department may be very different from the criteria you would use in another. The same thing is true even with in-patient units that serve different types of patients. The underlying data structure that you create, monitor, feed, and then report against needs to be sophisticated enough to accommodate those unique qualities.
Profit: How can providers improve budgeting and financial processes?
Holland: They need to have an understanding of cost drivers and the way costs are allocated in their department, and how their department influences costs in other departments and vice versa. They need to factor in effective long-range budgeting and forecasting. Most importantly, they need to find a budgeting solution that provides the flexibility to grow and change as their organization, customers, and requirements grow and change.
Profit: What does the future hold for healthcare technology?
Holland: We’re seeing the greatest information technology growth on the clinical side of healthcare. Notwithstanding the current economic climate, we see healthcare as one of the fastest-growing vertical markets, not just in the U.S. but worldwide. The clinical side includes everything from automating analysis of lab specimens to capturing radiographic images digitally and sharing them within hospital networks and externally to physician offices and even other healthcare systems. This involves electronic capture of all the documentation that goes into a traditional paper medical record. The technology gives providers the ability to develop data mining strategies and to analyze and manage that data, which has traditionally been done on paper. Electronic medical records and business intelligence are perhaps the fastest-growing software segments within the healthcare provider market.