IT eases healthcare budget pains

Summary:Technology tools designed to help medical facilities improve operational management, also make it possible to provide medical care at lower costs.

Budget constraints on healthcare providers across the Asia-Pacific region are putting added pressure on hospitals, national and regional healthcare networks, primary care providers and outpatient clinics.

Jonathan Silber, vertical industries manager at Springboard Research, said the majority of technology-related investment and focus in the healthcare sector is directed toward medical equipment for patients, decreasing overall funds for IT purchases.

"These constrained financial resources are forcing providers to manage budget caps and work with budget cuts," Silber said in an e-mail interview.

Dr. Beng Teck Liang, public sector general manager at Hewlett-Packard Asia-Pacific and Japan, said managing costs is at the top of everyone's agenda in healthcare and life sciences.

"This includes effectively utilizing resources and information to improve cost management, eliminate redundancies, remove errors from the system, and provide the greatest quality of care in the most efficient way," Dr. Beng told ZDNet Asia in an e-mail interview.

According to Vlad Dimitriu, vice president for IDC's Asia-Pacific Health Industry Insights, some concerns over rising healthcare costs in Asia stem from similar causes in the United States, such as increased longevity and general demand for improved service from a better-educated patient community.

"What is of particular note, however, is how Asian communities are attempting to deal with these costs," Dimitriu told ZDNet Asia in an e-mail interview. "Such measures include the proliferation of generic drugs, compulsory licensing and development of health tourism capabilities."

Opportunities in a growing market

For technology vendors and providers, the Asia-Pacific healthcare sector provides good opportunities.
Jonathan Silber, vertical industries manager at Springboard Research, said the Asia-Pacific healthcare IT market will grow from an estimated US$2.95 billion in 2006 to reach US$4.8 billion by 2010, registering a 13 percent compound annual growth rate between 2006 and 2010.
Vlad Dimitriu, vice president for IDC's Asia-Pacific Health Industry Insights, said the region is currently investing over US$8 billion in IT products and associated services annually and is expected to reach US$10 billion by 2010/2011.
The forecast for the industry in the region differs between developed markets such as Singapore and Japan, and developing markets such as Thailand, Malaysia and China, said Dimitriu.
"In developed markets, the focus will be cost reduction through process improvement, development of community/aged care and provider risk mitigation. In developing markets, the focus will be on more appropriate care delivery through separation of primary care from acute care facilities and development of the private care sector."

Reducing costs via tech
According to an IBM spokesperson, healthcare costs can be reduced significantly through the use of IT.

Technology can help healthcare providers reduce liability through improved treatment delivery and provide mechanisms that reduce errors, the spokesperson said in an e-mail interview.

According to HP's Beng, another top concern among those in the healthcare sector is mitigating health and business risks while improving quality of care.

"Issues such as reducing medication errors, better managing drug interactions, ensuring the authenticity of drugs delivered to market, and managing innovation and patient safety are also concerns," he explained.

George Lamaris, Asia-Pacific and Japan solutions director at Oracle's healthcare industry business unit, noted how various regulatory bodies in the region, such as health ministries, are considering publishing performance data of each hospital on the Internet.

"This will lead to competition between [healthcare service] providers as no one would want to be the bad-performing hospital, which should help further enhance quality services," Lamaris explained, in an e-mail interview with ZDNet Asia.

With access to better information in their operations, hospitals can make appropriate strategic and operational adjustments, he added. "This would lead to better utilization of resources at hand which in turn, could ultimately lead to better quality of care and more efficient services for patients."

Springboard's Silber said governments in the region are also making strategic investments to replace and modernize major medical and IT systems, and are busy employing clinical management systems and electronic patient record systems to better prepare for future needs and rising healthcare costs.

For example, Singapore is integrating its medical records and facilities to ensure its healthcare system remains one of the best among developed countries, Silber said.

Healthcare demographics across the region are also changing due to several factors, including a rapidly growing population, improvements in life expectancy rates, and the rise of lifestyle-related diseases.

"These shifting population characteristics are not only effecting how governments provision healthcare services, such as restructuring primary healthcare systems to place greater emphasis on early detection of illnesses, but also how they allocate money toward healthcare IT," Silber said.

"For instance, there's a surge in telemedicine offerings, telecare applications, healthcare hotlines and portals, [designed] to help alleviate the stresses of treating a burgeoning, aging and considerably rural society."

Market for tech vendors
Various IT vendors have been offering products targeted at the healthcare sector for a while now.

HP's Beng said HP's offerings are designed to give healthcare providers better access to patient information by integrating their systems, data, processes and people--while incorporating best practices and processes.

This way, he said, as staff and patients enjoy secure access to information, data and applications, healthcare providers can transform their business processes and IT to better serve the public.

According to Dr. Beng, HP's products are designed to help simplify storage and retrieval of patient records and other data, retrieve and protect reference images stored at imaging centers, hospitals and other providers, access online databanks, test results, X-rays and other information from anywhere, and automate the way data is gathered and processed.

Lamaris said Oracle's products streamline backoffice processes of healthcare providers through self-service, workflow automation and inbuilt best practices, so "resource savings [in the form of monetary, people resources, and time] achieved can be applied to frontline care where they are truly needed".

Oracle's applications for the healthcare sector include automation of the backoffice administrative functions of human resources and payroll, financial management, material management, and facilities and asset maintenance. Analytical applications facilitate goal-setting, modeling, planning, monitoring and reporting of financial and operating results.

IBM's spokesperson said internationally, its healthcare experts create systems for collecting, transmitting and exchanging clinical data, monitoring quality of care, sharing data more securely and instantaneously, responding to adverse drug events, and reducing medical errors.

Topics: CXO, IT Employment

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