Can information technology improve a hospital’s services, patient safety, and increase profits


The health industry has lagged behind many other industries. The technology for switching to electronic medical records has been available for many years. Applications for other areas such as procurement, billing and hospital maintenance can basically be taken of the shelf as many other industries, grocery chains and supermarkets have been using these components for more than a decade.

Cost consideration, regulatory controls, patient privacy and lack of inter-operability of available applications has prevented wide scale use of the technology. With the reduction in cost of wireless technology and computer hardware required for creating permanent electronic medical records, many hospitals have invested financial resources to reduce operating cost, improve profitability and patient safety. The new government policy announced in January 2006 will accelerate the pace of application of information technology in hospital industry. The paperless hospitals are however unlikely to arrive in the near future and need not be an aim in itself.


o   Introduction

o   Present Status of IT Applications in Health Industry

o   Benefits of Integrating Information Technology

v  Electronic Medical Records

v  Accurate Billing

v  Removal of Medication Errors

v  Drug dispensation

v  Nursing Care

v  Information Technology in Other Hospital Related Functions

o   Concerns of Information Technology

o   Errors at the Speed of Light

o   Is a Total Paperless Health Industry Possible?

o   Discussions & Conclusions

o   Bibliography

Going Paperless
Can information technology improve a hospital’s services, patient safety, and increase profits


In a 31 January statement, President Bush highlighted the need for reducing health care costs and improving patient safety through wider use of information technology. He said “We will make wider use of electronic records and other health information technology to help control costs and reduce dangerous medical errors” [Bush, 2006].

Medical care in United States still faces a number of problems. The cost of medical care is high and 15% of our citizens do not have access to even basic medical care [Oberlander & Marmor, 2001]. Problems arising out of concern for patients’ safety are a major worry for both medical professionals and hospitals. Errors resulting due to incorrect medication, misplacement of records, oversight by medical professionals and general administrative errors compromise patient safety and result in litigations and high cost of insurance.

A number of these errors can be minimized by maintaining proper records, having on-time access to patients’ medical history and removal of human errors in hospital and patient management. It is to the credit of the health industry that it manages itself so well and errors are kept under control. However, everyone recognizes a need to improve patient safety, as the present status cannot be considered satisfactory for both health industry and the patients.

Disasters like floods and fire as recently witnessed in the aftermath of Katrina, Rita, Wilma flooding and California fire where paper medical records were lost also highlighted the need to create electronic medical records and eliminate the paper based medical record system. [Barlow, 2005] points out that despite availability of information technology appropriate for use in the health industry; it is technologically operating about 10 years behind the grocery, manufacturing and retail industry.

Health care in United States is a competitive industry serving its customers, the patients. Applications of information technology is not new to most hospitals but  applying information technology to an extent where hospital have a totally integrated seamless application of information technology leading to a virtually paperless system is expected to result in much reduced costs, improved patient safety and an increased in profitability.

Moving up to the level of paperless hospital however, presents a number of problems such as cost of the system, concerns for data safety, possibility of ‘error at the speed of light’ and the need to train all cadre of staff to the applications of information technology. This paper discusses the concerns and advantages of electronic medical records and paperless hospitals. The factors relating to public concerns regarding the privacy aspect of the application of the technology are also explored.

Present Status of Information Technology in Health Industry

Information technology is not new for the hospital industry. Most hospitals have part of their operations computerized, but various sections have stand-alone modules, which do not talk with each other. A survey of the differences among the most wired (using wireless IT) and the least wired hospitals showed that while top 100 on the list hospitals are well on the road to becoming virtually paperless in clinical information functions, the least wired have just begun to implement information technology in their organization. Clinical information functions such as drug interaction alerts, pharmacy order entry and lab results are available to care providers in 75% of the most wired hospitals [Survey, 2004]. Among those at the bottom of the list, only 13% have wireless access to drug alerts, 14% provide wireless pharmacy order entry and about a quarter provide wireless lab results review [Survey, 2004]

In the order of priority, Clinical information is the first preference for most hospitals, as it affects the quality of patient care. Clinical and operational applications are a good indicator of the extent of IT implementation, supply-chain is the next order of priority and third priority is the labor [Barlow, 2005]. This does not mean that the hospitals are waiting for clinical functions to become IT intensive before acting on the other functions. All hospitals even those with low ratings on IT advances have considerable computer applications in record keeping and other areas.  Automated Medical Record, a paper-based record with some computer-generated documents is used in most hospitals. The ‘best wired hospitals’ are already reporting 80-100% physician access to medical history and drug alerts [Barlow, 2005].

IT outsourcing is increasingly being used by many hospitals to have access to high quality IT staff, improve operations at lower costs and to ensure successful implementation of major systems. Outsourcing has its own problems and many are finding that outsourcing is not as economic as they once thought it would be as outsourcing companies were continuously increasing their charges.

In recent years, hospitals have made concentrated efforts towards paperless medical record that promises to make ‘the traditional hospital charts a relic’. Chief Executive of one hospital described it as a ‘daunting task as people like paper’ [Darmiento, 2004]. At one major hospital, physicians refused to use the electronic ‘physician order entry system’, claiming that it took minutes instead of seconds to write a prescription [Darmiento, 2004].

The problems are being solved as both the hospitals and medical professionals can appreciate the promise a paperless problem free system promises.

Benefits of Integrating Information Technology

In the first decade of 21st century, everyone is familiar with the advantages of electronic information systems. Hospitals are using IT applications and computers in most areas of their operations but concerns for data safety, a natural reluctance of professionals trained in working with papers and most importantly the costs of going paperless has prevented a much wider scale use of IT in health industry.

Electronic Medical Records

Electronic Health Care Records can be classified on the basis of their potential use. The automated medical records (AMR) use computer-generated documents to produce paper base records. The computerized Medical Record (CMR) maintains the AMR records in electronic form [MRI, 2007].

The Electronic Medical Records EMR stores the information in a properly structured and optimized form for inter-operability of all other documentation systems. This is the form required for paperless operation of a hospital. In addition to the EMR, electronic patient record (EPR) can combine patient-centered record from multiple institutions. This record may be made even more comprehensive by including other general health related information not related to a disease, which becomes Electronic Health Record (EHR) of a patient [MRI, 2007].

EMR allow patient data to be accessed from any location, drug interaction and allergy checks can be incorporated, clinical notes can be added from a terminal or hand-held wireless tablets. Prescriptions and laboratory tests can be ordered and reports can be received as EMR Accurate Billing

Another important benefit is the simplification of insurance claims. Insurance underpayments, billing errors and bad debt loose the hospital industry nearly 13% of its revenue each year [Pesce, 2003]. EMR can be combined with billing system removing the need for data collection, manual data entering and the need for rework and account follow-up saving labor costs and financial losses due to under billing and claim denials.

Removing Medication Errors

Medication errors are a frequent occurrence in health industry. It is estimated that these error result in an overall serious drug reaction in 6.7% cases [Bates, 2000]. Almost half of the adverse drug events are preventable. The problem with the paper records is that even if the adverse reaction to a patient for drug is known, the information often escapes notice or is not communicated during transfer from one section to the other. The EMR eliminates this problem. Once recorded the system follows it any drug interactions, allergies or overdosing possibilities are highlighted. Studies have shown that adverse medication related event reduced by as much as 80%. [Raschke et al, 1998] study claimed that the prescribing physicians missed 44% of these interactions. Thus, EMR is a powerful toll to prevent these errors, savings costs in complication and legal problems.

Drug Dispensations

Computerized physician order entry system of prescription produces legible prescription with dose, route and frequency information, the drugs are checked against interactions and allergies removing all sources of potential error in prescription dispensation. It based dispensation system also allows other technological advances such as robotic filling of prescription, bar coding, use of automated dispensing devices and automatic medication administration record.

Nursing Care

Information Technology applications in hospital setting is a great asset for the nursing care in hospital as well as in other areas such as in nursing homes, patients being monitored while they stay at their home. Nursing professionals can follow all aspects of patient care by having access to EMR. The display forms can be color coded to highlight various aspects of treatment eliminating oversight and possibility of errors.

Thus, it is clear that information technology applications in clinical information function result in an efficient, cost effective system with added advantage of patient safety.

Information Technology in Other Hospital Related Functions

Clinical information is just one of the important areas of application of information technology. It is specific to hospital industry and requires specific attention. Other areas such as procurement functions have most of the functions common to other industries, grocery chains and supermarkets. Application of information technology to procurement has benefits very similar to those achieved by major commercial and industrial chains. Competitive bidding, computerization of stores, ordering of new stocks, optimization of stocks of consumables and medicines, automatic ordering, inventory management are areas where application of information technology has been proven to improve efficiency and cut cost in other sectors. Health industry can benefit from their experience. Many of the most wired hospitals have already implemented information technology in these areas.

The heath industry is thus ready and in a position to move to fully integrated application of information technology. There is no doubt that if handled properly application of information technology can reduce errors in treatment of patients, improving patient safety. It can reduce staff demands as many of the information need not be reprocessed and an integrated system can handle many functions from the single source of EMR saving costs and improving bill collection mechanism.

Stream lining various procedures improves patient satisfaction by eliminating waiting periods.  In emergency department (ED) for example, waiting time for patient is often as long as 2 hours. Customers leaving without evaluations are a loss to the ED. In a study, [Miles & DeBusk, 2002] reported that  2.4% patients were leaving-without being seen at Providence Hospital, Detroit. This meant that the ED was loosing revenue from 720 outpatient visits per year, which can be expected to convert into 175 admissions. Reduction in waiting time through automation of ED functions resulted in a drop in leave-without- being-seen patients and saved the ED an estimated $1.2 million per year. This is just an example of cost saving in hospital management by use of information technology. Other benefits of patient safety, cost reduction in clinical functions and hospitalization have been discussed above.

Our answer to the three main questions put at the beginning of this paper is ‘definitely yes’. Application of information technology will increase profitability, improve patient safety and improved hospital services. However, we must appreciate that although hospitals are operating like an industry, the industry has to treat human beings. The information processed is of a sensitive nature and the safeguard required to implement information technology will be the most important consideration.

Concerns in Application of Information Technology in Hospital Industry

Application of information technology on the scale required for eliminating most of the paper based record keeping is not cheap. A number of larger hospitals have spent in excess of $50 million to implement extensive information technology programs. This kind of investments can often not be justified in terms of cost advantages over a short period. Patient safety, regulatory requirements and demands from insurance industry often provides the impetus to implement EMR and information technology.

Concern for privacy is the next important consideration. [Health & Medicine, 2006] warning about the concern for privacy points out that in a typical case EMR will be available to hundreds of hospital staff members and potentially hundreds of thousands of payers, providers, outsourced company staff that handle billing data and can fall into wrong hands compromising privacy. Open network like Internet, wireless computer network all have the potential of data interception.

Introduction of a wider network system where the information from one hospital can be exchanged with another hospital or from one region to another for truly portable data presents many problems in inter-operability of the information technology. Many software suppliers have technology applications that cannot be used with the software of another technology provider.  A uniform standard will be required to fulfill the aim of transferring patient record from one region to another if the patient moves to another region or switches to another hospital.

Errors at the Speed of Light

Patient information record for his whole life being available on computers can be a problematic thought for many privacy-loving individuals. The knowledge that this information if not protected adequately can be available to the whole wide world is not a pleasant thought. The present war on terror and government’s willingness to invade privacy of US citizens means that the Electronic health records run a risk of unauthorized used for purposes other than patient’s health.

A break in any form like the break down of computerized physician order entry at Mount Sinai Hospital can be catastrophic for EMR. Preserving data over the lifetime of patient, preserving digital and picture format information and ensuring that the formats in which the data was originally created will be a major issue for EMR and for success of information technology applications.

Is a Total Paperless Health Industry Possible?

Paperless hospital need not be the main purpose of operating the health industry. Many of the present generation of physicians and medical professionals are trained to work with paper-based records. This does not mean that EMR will fail in the respect of becoming paperless. It appears that hospitals effort towards improving efficiency and cutting costs will continue to take us in the direction of paperless operations. The hospitals, which have invested heavily in information technology have largely eliminated the paperwork from clinical functions but these too are ’virtually’ paperless. Clinical functions of all modern hospitals are expected to move in this direction and most will achieve a virtual paperless status in clinical and hospital applications.

Discussion and Conclusions

Extending this to other hospital functions such as procurement will take time and may even not be necessary. The government target outlined in [Bush, 2006] can be met by the scheduled date but having a paperless hospital system for the entire health industry in United States need not be an aim to work for. A virtually paperless hospital or even less will be sufficient to meet the requirements of patient health, hospital profitability and patient safety. It is important to ensure that errors made at the speed of light do not compromise privacy and hence patient safety in our bid to achieve ‘Paperless Hospitals’


Bush, GW President, (2006), Vision for the future of healthcare in the United States, [Online] retrieved on 24 January 2007,
Miles, B. and DeBusk, C., (2002), Putting ‘Express’ Back in Hospital’s ED Express Care, [Online] retrieved from Internet on 24 Jan 2007,
MRI-Medical Records Institute (2007), [Online] retrieved from Internet on 24 Jan 2007,
Bates, DW, (2000), Using information technology to reduce rates of medication errors in hospitals, British Medical Journal, March 18
Raschke RA, Golihare B, Wunderlich TA, Guidry JR, Liebowitz AI, Peirce JC, et al., (1998), A computer alert system to prevent injury from adverse drug events- Development and evaluation in a community hospital, JAMA 1998;280:1317-20.
Health & Medicine, (2006), At risk of exposure: In the push for electronic medical records, concern is growing about how well privacy can be safeguarded, Los Angeles Times, 26 June 2006
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