Health Care Industry Running Behind in Information Technology

Article excerpt

NEW YORK -- Faced with a patient with a stubborn headache, a U.S. doctor can use some of the world's most up-to-date technology to scan the brain, looking for problems.

The doctor's diagnosis, though, is still likely to be jotted on paper and filed in a folder, even though companies such as HBO & Co., Cerner and Shared Medical Systems offer computer products that makes it easy to record, store and manipulate patient information.

Computers are a fact of modern life. So is the pressure on the health care industry to operate more efficiently. Slowly, the nation's doctors, hospitals and managed care companies are putting two and two together, analysts said.

"The health care industry in general is still in the dark ages when it comes to (information) technology," said Todd Richter, an analyst at Morgan Stanley Dean Witter Discover. "Use of information technology and application technology is going to separate the winners from the losers."

Many information service companies do everything from selling software to building complete computer systems for health care providers. HBO, the largest, sells Pathways Smart Medical Record, software that documents patient histories. Another package handles scheduling of patient appointments. HBO shares have risen about 60 percent in the past 12 months.

Some smaller software companies have hit snags recently. Medirisk reported profit per share that was more than 80 percent lower than what analysts were predicting before the company said earlier this month that problems with software sales would hurt earnings. Advanced Health anticipates a second quarter loss.

The larger companies have the ability to weather ups and downs, with their size giving them more chances to cross-sell different products, produce individual packages more cheaply and offer greater variety. As health care companies consolidate, they need to buy larger and more varied software and computer products, analysts said.

"You've got bigger companies with more users," said Sharon Corr, a Merrill Lynch analyst. "The health care companies are standardizing themselves on major vendor systems."

The need to keep patient data private has also hampered automation of health care.

Because of "the big bugaboo of patient confidentiality, people were less eager to jump into automated medical records," said Annie Driscoll, a health care consultant at NWB Managed Care Development. "No one saw the advantage of typing medical records into a system if they weren't going to be able to use it."

Improvements in security technology, though, are making this less of a worry. For example, the Brigham and Women's Hospital in Boston is working to put patient data onto a computer network, easily accessible from many different locations for those who have all the right passwords.

A group of doctors, students and computer scientists is working to put details on the Web, such as where outpatient surgery patients should go when they arrive at the hospital and descriptions of doctors. …