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The future is here.

Executives in every industry need to understand how promising, new technologies will affect their businesses, especially those in industries where rapid information processing is vital to success. For those in health care, the evolving marketplace for managed care makes efficient information processing and telecommunications indispensable to effectively manage a single physician's practice or a large multinational conglomerate. Unfortunately, most managers have grown up without learning to use personal computers, and are just starting to read about technological innovations, such as the Internet's World Wide Web, that will have a profound influence on their work and lives. Physician executives need to understand applied informatics in order to lead their organizations wisely and successfully into major investments in standardized transaction systems, telecommunication networks, multimedia workstations, and new enterprises, such as telemedicine.

Just as clinicians must learn to use superior diagnostic and therapeutic technologies as they become available, such as antibiotics, anesthesia, electrocautery, insulin, chemotherapy, linear accelerators, and magnetic resonance imaging, so, too, must physician executives learn about standardized clinical lexicons and computer-based patient records, relational databases, data repositories for retrospective data analysis, telecommunication technologies, and the Internet. And clinicians need to learn about computer-based patient records, outcomes management, practice guidelines, expert systems for differential diagnosis, knowledge bases and electronic medical textbooks on the Internet, and community health information networks (CHINs). The latter can be used to inform patients about how to manage chronic conditions, learn to take better care of themselves, prepare for diagnostic studies and surgical procedures, and schedule preventive health measures.

The most substantial investments many health care organizations make in the next decade will be in electronic data and information processing systems to support efficient and effective delivery of clinical services. To lead their organizations, physician executives will need to understand the functions and limitations of these systems. Knowledge is power. Managing the myriad health care services needed for defined populations of people over time, under fixed budgets set by capitation, requires timely, accurate, and standardized information processing and sharing among all providers involved.

Physician executives manage the clinicians caring for those populations, and, increasingly, are asked to participate in procuring the information systems needed to expedite data collection, sharing, and analysis. A patient's paper medical record in a specific setting must be supplanted by the electronic health record available electronically to all clinicians treating that individual, regardless of their locations within the health care delivery system.

Physician executives study marketing, finance, health law, and organizational behavior, even though they will usually delegate specific duties related to those areas. In the same way, physician executives need to know what technological trends, threats, and opportunities their directors of information systems face, even though they may not aspire to direct these departments. Imagine the chief executive of a bank, or insurance company, that does not spend considerable time studying how to procure and deploy the best information processing technologies. Now try to imagine a business that is more information intensive, and more information dependent, than the health care industry.

An applied science

Informatics deals with applications of information systems, and the processes for selecting, installing, operating, and using them. It does not address the theories of software, hardware, or firmware. It explores technological trends that will affect the types of information processing systems available. It does not look at the physics and mathematics of technologies that are not available, let alone feasible, today. Informatics is practical and applied. It is not about breakthroughs in electrical engineering, or the likely design of future systems. It is about the technologies applicable to the business of health insurance and providers now.

Informatics helps clinicians, leaders, and managers learn to use information processing and communication technologies in much the same way that someone is taught to drive an automobile. We learn that there are common rules of the road - national standards for parking, turning, traffic signals. People can drive any car, anywhere in the United States and in most foreign countries, because they adhere to the same basic rules (steering wheel on the left, driving on the right side of the road). Informatics teaches standards for data collection, storage, retrieval, communication, and analysis that permit health care organizations to use electronic medical records and data repositories for retrospective analysis, quality control, and outcomes assessment.

Widely available

The worldwide personal computer industry, including hardware, software, and related services, represents more than $150 billion dollars per year in size. Most who invest in computer technology are not technophiles squandering money on new toys, or neophytes duped by proselytizing vendors. This revenue is generated by people who perform useful work with those technologies, producing more benefits than the cost of the initial investment.

Computers of all sizes, including advanced calculators, can be found in all but the very smallest businesses. School children reach their teens knowing how to use personal computers. Executives learn to type their own letters and produce their own budgets on PCs because their companies can no longer afford a secretary for each of them. E-mail is an indispensable asset. More than 20,000 e-mail messages per second are sent over the Internet during working hours, and that number is rising with the burgeoning use of the Web, which is growing in the number of users faster than any other manmade thing.

Knowledge comes from accumulating information and studying trends in data. Many professional schools and undergraduate programs require students to have computers. Students obtain their syllabi, class notes, and exercises over school networks, and climb onto the Internet to access information from government agencies, libraries, commercial ventures, and other students for homework and research projects. When they graduate into the work force, they will use those same skills to find data and information to create research reports, marketing studies, business plans, and proposals.

Nurses and physicians completing training have learned to use a computer-based patient record system to enter orders and retrieve laboratory results, at least for inpatients. Most programs for physicians and nurse practitioners who specialize in primary care will install computer-based patient records in their clinics. The new generation of clinicians knows how to use computers, and expects to use them in their practices. The personal computer and electronic networks are the essential enabling technologies.

Endogenous growth

In the 1950s, economists argued that humans would overpopulate the world and starve, unable to make sufficient food. We have discovered that we can produce more food now than ever dreamed of 40 years ago. We have developed communication and information processing technologies unimaginable then. We have created the biotechnology revolution, and the promise of better treatments for disease. We submit more patent applications every year, and that after someone once suggested we close the patent office because all the possible inventions already existed. In short, we generate more ideas for dealing with and ameliorating scarce resources and time than ever thought possible, and we are creating them at an accelerating rate.

Many devices and methods for minimally invasive, endoscopic surgery have been developed to reduce trauma. Physicians have learned to change their practice habits and reduce their dependence on hospitals as new medications, procedures, and treatments allow for greater outpatient care. Health care organizations can still find new techniques, devices, and means of influencing the unhealthy habits of patients to reduce the burden of illness and disability on the populations they serve. The principal tool in the quest for continuous improvement is imagination, and the main resources are the published experiences of other providers and patient data studied for signs of outcomes variation. We need to build learning organizations, as Peter Senge, author of The Fifth Discipline, says - and this requires systematic self-study and comparison to other successful organizations to identify better ways of performing the processes of management and care.

Ideas are our most important products - we can dream of achieving what we previously thought impossible and then figure out how to attain it. The ideas we need to continue to improve health care will emerge from basic, clinical and health services research. Applied informatics will help us to identify, standardize, collect, and analyze data about our patients and health plan members that will provide opportunities for quality improvement.

Who needs to learn informatics?

Most leaders of health care organizations - health plans, hospitals, group practices, insurance companies, pharmaceutical firms, and suppliers to the industry - have not used computers. They finished their formal education before personal computers were useful in their work, and generally do not become involved in planning to computerize information systems. They approve the budgets, once they are reassured that these systems will save money for their organization over five years, but they don't participate in the implementation. Computer systems are used to automate specific clerical tasks and not the stuff of corporate strategy, or so they think.

With the widespread consolidation of payers and providers, the advent of regional integrated delivery systems, and providers taking financial risk for the care of populations, the computer-based patient record will be any health care organization's key asset. Informatics will be the one of the most important disciplines to understand if health care leaders are to help their organizations use these expensive and transforming technologies successfully. Right now, regional group practices of physicians are forming, many funded by hospitals and physicians, some by the physicians and venture capitalists, and their first major investments are in standardized office practice systems and networks linking the locations where they practice to create and share computer-based patient records.

Direct user access to computers

Thousands of years ago, scribes wrote down whatever leaders wanted to commit to papyrus. Until 600 years ago, books were copied by hand. When Thomas Jefferson attended college, many students employed secretaries to take notes. As tools have made production less expensive, people have learned to create their own documents. Not only do students take their lecture notes, but employees from all kinds of enterprises, including senior managers, produce documents on computers. Secretaries rarely take dictation anymore - their bosses type their memos and letters, send e-mail, and draft reports on their PCs. Most physicians still scrawl short progress notes for office and hospital visits, and dictate other clinical reports. Speaker independent voice recognition will make the intermediary far less common.

Imagine you run a hospital. All else being equal, you'd prefer a physician who could get patient laboratory results from the computer than one who depends on nurses. What if you run a corporation, and you have a choice of managers who can use personal computers and those who depend on staff to do the same work. Wouldn't you prefer the one who can collect data and create documents, especially if he or she produces the work faster and at a lower cost. Investing in computer technologies to help employees obtain and use information quickly, and training them to do so, are at the heart of applied informatics.

How will others use

these informatics tools?

Managers approve budgets for information and communications systems that amount to tens of thousands of dollars in hardware, software, and consulting for small group practices, hundreds of thousands of dollars for group practices of 30 to 100 physicians, millions of dollars for single hospitals and health plans, and tens of millions of dollars for multi-hospital systems. Traditional administrators are trained to manage facilities. Most of them have a harder time understanding the uses of telecommunication networks, clinical decision support systems, and computer-based patient records. But their organizations will pour as much money into computer systems in the next 10 years as they put into facilities in the past 10 years. Those managers need training in informatics to understand and successfully manage these investments.

Computer-based patient records:

The most important asset

Computer-based patient records (CPRs) will be the most important asset for managing the care of populations of patients and health plan members. They can help maximize patient satisfaction, while controlling spending and standardizing and improving the quality of care delivered. CPRs for hospitals, health plans, and physician networks are not software packages from single vendors. In larger health care organizations, the CPR is made up of a standardized data dictionary and data model to which all users agree, multimedia workstations to collect data, relational data repositories to store it, networks to communicate it, and separate relational databases for retrospective analysis. The databases, standardized data elements, workstations, and networks must be integrated into one shared computer architecture if the organization is to avoid squandering financial resources on software and systems that are incompatible, redundant, or otherwise useless.

Windows to the digital world

Executives need to learn about informatics to know how to access the Internet's World Wide Web and find information key to their work and organizations. The Web's growth rate is a phenomenon that has never been experienced in history. Home pages are added every four seconds. The number of users doubles every few months. Disks arrive in the mail from America Online, CompuServe, and Global News Network (GNN) offering free, or next to free, access to the Internet after effortlessly loading their software.

Those already on the Web can download new versions of Netscape and Microsoft Internet Explorer for free, and enjoy the multimedia features. The number of servers with interesting documents available to Web browsers grows exponentially, attracting new users every minute. The Web is the precursor of the information superhighway and all its multimedia offerings.

The speed of modems is not increasing rapidly - it has risen by more than eightfold, from 300 baud (bits per second) to 28,800 baud, in the past 12 years - but interest in the Web encourages telecommunication companies to invest in and develop faster digital access, with communication protocols such as ISDN ( about $30-40 per month in urban areas), switched 56 kilobit (56,000 bits per second) dedicated lines, cable modems, and faster digital line signaling protocols (ADSL) that promise to carry data at millions of bits per second over standard twisted pair copper wires we already use for telephone calls.

What was impossible only a few years ago is possible today. Our habits of thinking change much more slowly than our technology. We find ourselves required to use a mouse - a toy used by our children yesterday - far sooner than we expected. Today it is attached to the computers in our group practices and hospitals where we must access patients' laboratory results to care for them promptly.

Can managers avoid technology?

Can senior executives avoid the responsibility of using personal computers to access corporate data, read and produce e-mail, and create memos, letters, and reports? When is an executive so important that the organization will let him or her not use a personal computer that provides access to vital corporate data faster, and at lower expense, than asking staff to get those data? When is a hospital or group practice likely to require that all clinicians enter data into the computer-based patient record?

What do we do with the executive who cannot retrieve information from the corporate network? What do we do with the executive who cannot produce a letter? What do we do with the hospital or group practice executive who must approve the multi-million dollar budget for a computer-based patient record, but has no notion of what one looks like, how clinicians can use it to improve patient care, and what training is required to use the CPR to full advantage?

Managers and clinicians who think they are too old, or too important, to learn to use a personal computer need to think again. We ought not tolerate the manager or clinician who refuses to use e-mail, because in many circumstances it is the most efficient means of leaving a message. E-mail will be replaced by multimedia mail and video conferencing based on the Web and less expensive than a long-distance telephone call.

Clinicians who eschew learning to use workstations for video conferencing will miss opportunities to communicate with patients in their homes, take medical care to the patient, and make more informed triage decisions. They will miss the chance to place the documents now printed and distributed by mail on the Web, making them available to the community at a lower cost - schedules of health education events, policy and procedure manuals, news letters, directions to treatment facilities, and explanations of diagnoses and treatments in layman's terms.

How does a physician-hospital organization, management service-s organization, or group practice that is acquiring physicians' practices value one in which physicians have not automated, with all scheduling, accounting, and medical records based on paper forms? Would the potential acquirer avoid practices that have not organized and standardized their records electronically? What are the added risk-management issues for physicians' practices that do not use decision support software to help their clinicians select and dose medications, identify potential drug-drug interactions, avoid allergic reactions, reduce adverse reactions due to disordered physiological parameters in patients, and formulate differential diagnoses in complex cases?

What do we do with physicians who cannot obtain literature from National Library of Medicine's Medline? Do we insist that they learn to use Grateful Med via the Internet, PaperChase, or other online knowledge bases? Physicians who cannot look up articles on how to manage patients with complex cases may not practice medicine as successfully as those who do. The latter may gain insight into best practices faster than their less techno-savvy colleagues.

Physicians and managers who cannot enter data about patient treatments and outcomes may not discern patterns that could lead to new and better case management ideas. Without systematic study, it is unlikely that those managers or physicians will see opportunities for quality improvement. A learning organization expects its members to look for ideas that improve its work processes. It creates good outcomes for its customers by successful implementation and continuous improvement of care processes.

What does the learning organization do with the clinician who does not use patient education software to print instructions about clinical conditions and treatments? Standardized instructions can answer questions patients don't ask during office visits and reduce the likelihood of unnecessary resource consumption. The more informed patients are about their ailment, the better they follow instructions and manage symptoms with less dependence on the health care system. A lack of effort in patient education may well cost the health care system more resources in the long run.

What happens to the physicians who lose contracts because payers want to work only with those who use computer-based patient records? If an IPA, PHO, or multispecialty group practice adopts a computer-based patient record, then physicians who wish to participate fully in patient care will implement and use that system. Physicians in a group practice or hospital are expected to complete their clinical records on paper forms standardized by the facility m which they work. As hospitals and group practices adopt electronic medical records, They will expect physicians to use them.

Physicians and hospitals need to store paper records (costing $10 to $25 per square foot per year). They could save money by using electronic medical records and putting them on WORM (Write Once - Read Many times optical disc) drives. When providers feel the squeeze of diminishing premiums and capitation rates, the storage space dedicated to paper records will become more of an issue.

Physicians and hospitals are beginning to create and use pages on the Web. Already, in major metropolitan areas, a substantial segment of the population explores the Web. People will become accustomed to learning about and purchasing products and services in this medium. Hospitals and physician groups that use the Web to inform the public about their services and ways they can participate in managing their care - using passwords and encryption to protect the privacy of communicators - will find market share shifting their way.

Patients and plan members will abandon providers who do not have electronic communication. When many physicians accept e-mail from patients, those who do not will lose patients. When hospitals allow patients scheduled for elective procedures to pre-register electronically from home so they do not have to complete forms waiting in the admission department, those that do not will lose patients. Health care systems with relatively high operating expenses will lose patients to those that cost less, especially if they cannot prove that they provide higher quality services and better outcomes.

Informatics is needed to measure quality and value - and reduce operating costs. The techniques involve data collection about patient outcomes (mortality, charges, functional status, and satisfaction), storage of standardized data in a relational database, and systematic analysis to find opportunities for quality improvement and outcome variations. Organizations that invest in relational database management systems for data repositories of the patient care processes are more likely to find ways to reduce costs and improve outcomes - making themselves more attractive to purchasers of health care services. To the winner of the cost and quality wars go the spoils of more patients and health plan members.

What happens to organizations that can't collect data for payers to allow them to report HEDIS (Health Employer Data and Information Set) statistics to employers and regulators? Many states require that health plans receive accreditation by the NCQA to maintain licensure. Health plans need to report process and outcomes data, based on HEDIS statistics. Payers will have no recourse but to contract with those who can collect and report data about their patients electronically. U.S. Healthcare, a large Ipa-based HMO in the northeastern states, expects physicians and hospitals to submit data for HEDIS reports in a timely manner, or else they receive less pay and may lose their contracts.

Refining risk adjustment

What happens to the organization that can't risk-adjust clinical data to be used for physician profiling, outcomes studies, and quality improvement programs? Those organizations misinterpret patient outcomes, alienate physicians who know what analyses are performed, and lose the opportunity to interest the medical staff in quality improvement.

Clinicians understand that every patient is different, and patients arrive at the office with various probabilities of health outcomes. Obese, hypertensive, hypercholesterolemic, inactive patients who smoke cigarettes are far more likely to suffer illnesses that require medical intervention than svelte patients with no bad health habits, no matter what their physicians do for them. The physician burdened with more of the former patients will be associated with a higher frequency of negative outcomes than the physician who doesn't treat them - intentionally or unintentionally.

Consider two physicians who treat patients with cancer. One can show that his patients have a 93 percent chance of living five years after initial treatment for their malignancies. The other shows with equally valid outcomes data that patients have a 7 percent chance of living five years after treatment. Who is the better physician? Of course, you need to know if they treat patients with the same kind of cancer. You understand that patients arrive at with differing probabilities of a certain outcome depending on their underlying condition. In this example, the physician with the large proportion of patients surviving five years is a dermatologist treating basal cell carcinomas of the skin. The second is an oncological surgeon treating patients with carcinoma of the pancreas. Since the patients differ in the types of cancer they suffer, their probabilities of death within five years before treatment vary.

Hospitals and health plan managers who do not have a background in clinical medicine should nevertheless understand the gross examples given above. But what education, training, and informatics technologies are their organizations investing in to refine risk adjustment for patients of physicians in the same specialty where the prior probabilities of the outcomes - mortality, cost, wound infection rates, functional status, and satisfaction - vary by patient, albeit more subtly? Managers need to be involved in these decisions, because they determine the basic budgets for information systems, health services research, and all other investment and operating expenses for their organizations.

The Web

The Internet, specifically the World Wide Web, will transform computing and electronic communicating by providing standards for multimedia information exchange among previously incompatible information systems. The Web has already been introduced to most westerners as a method to send and receive e-mail and colorful documents with still images. Most people do not realize, yet, that the Web has an architecture for sending sound and video as well.

Bandwith, the speed at which data moves from computer to computer, is still a limitation, but as people discover the Web's capabilities, they will invest in faster digital access. And around the corner, but available before the year 2000, is ADSL (Asymmetrix Digital Subscriber Line) technology to move millions of bits per second over standard copper telephone lines. The Web is the supreme application that will drive us to faster digital access, and provide a vehicle for efficient and pleasant electronic and digital voice, text, image, and video communication.

The desire to move quickly and communicate in multimedia makes these investments inevitable. We will pay $25 to $75 per month for fast digital communications, and think nothing of it. We'll get basic telephone and cable TV service, access to the Web, and the ability to videoconference for less than we pay for telephone, cable TV, cellular telephone, and online access today. Vendors of application programs, including word processors, online encyclopedias, and home banking/finance systems will adopt graphical user interfaces that seamlessly integrate with Web browser software for access to information and entertainment without having to move between programs.

The rush to Web standards for sharing data will advance vendors' commitments to make computer-based patient records, patient education applications, and office practice management systems. This will not be hard, because most have adopted the Microsoft Windows interface. The internet will be embedded in their software already, making the job of moving patient data reliably and securely easier than it is now using incompatible, proprietary systems.

But what happens to the physician's office, health plan, or hospital that doesn't adopt this new, open, and shared standard for clinical computing? Will they receive patients' information electronically? No, they won't - or will at a high price. Will they send data to other organizations involved in patient care quickly and reliably? Not without expensive, proprietary interfaces. The customer will usually find another provider who makes electronic communication easier.

You've probably selected a bank that offers a card you can use at most automatic teller machines, because it uses standard and popular financial networks like MOST, Cirrus, and others. The same dynamics will happen in health care. As clinical networks emerge using internet standards, those that link physicians to only one hospital or payer will lose favor quickly. Organizations will need to move to standardized networks that allow secure communication of multimedia data, and they will undoubtedly be based on the Web design.

The promise of telemedicine?

And what about telemedicine's availability to patients who would rather have a teleconference from home that answers their questions, rather than drive to a physician's office, urgent care clinical, or emergency room? Telemedicine will burgeon as video teleconferencing grows on the Web. By adhering to Web standards, hospitals and physicians will be able to participate with patients in video teleconferences without having to pay for, install, or maintain proprietary equipment on patients' PCs. Woe to the organization or private medical practice that does not see this standardization coming, and invests in systems that do not support the internet standards.

Woe, also, to the provider organization that does not offer staff the resources to support telemedicine consultations when the public learns to expect videoconferencing for banking, shopping, and other activities. The health care organization that offers home and office health care conferences with providers will attract new business. Banks that did not offer automatic teller machines lost business to those that did - and now all offer ATMs. Travel agents who only scheduled flights on one airline lost out to those who could compare fares and schedules of all the major airlines. Grocery stores that did not use universal bar codes to tabulate customers' purchases lost to those that did, because they did not manage their inventories as well.

Providers who will not submit claims electronically are paid less, or not paid at all, by large insurers. Medicare demands electronic claims submission from hospitals, and soon will for all physicians' offices. Customers will expect telemedicine. And their health plans will promote its use as a way to reduce the cost of unnecessary visits to urgent care centers and emergency rooms. Physicians who receive capitation will organize telemedicine services for those same reasons, probably staffed by nurse practitioners and physicians' assistants for the initial triage decisions.


Informatics is an indispensable discipline for leaders and managers - of patients, facilities, and organizations - because the most important assets of those organizations are their information processing technologies, and the key skills are those that help them to manage information. Managers and executives will increasingly need to anticipate trends in information management technologies that could affect their businesses. In health care, computer-based patient records, integration engines, online analytical processing systems, telemedicine, expert systems, and the Internet have become vital to having a competitive advantage. Leaders who do not understand the promise and limitations of these technologies or the importance of strong leadership in establishing standards for data and transaction systems will not lead their organizations well.

Marshall Ruffin, MD, MPH, MBA, FACPE, is President of The Informatics Institute in Falls Church, Virginia. He may be reached at 810 Gatehouse East, #401 East, Box 11, Falls Church, Virginia 22042, 703/205-3901, fax 703/205-2301. You can also reach Dr. Ruffin online at
COPYRIGHT 1996 American College of Physician Executives
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Title Annotation:medical informatics
Author:Ruffin, Marshall
Publication:Physician Executive
Date:Nov 1, 1996
Previous Article:Threat or opportunity in the doctor-patient relationship?
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