Governing Health Care with IT

Governing Health Care with IT

Reima Suomi (Turku School of Economics and Business Administration, Finland)
DOI: 10.4018/978-1-60566-050-9.ch127
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Abstract

The pressures for the health care industry are well known and very similar in all developed countries: altering populations, shortage of resources as it comes to staff and financial resources from the taxpayers, higher sensitivity of the population for health issues, new and emerging diseases, just to name a few. Underdeveloped countries have different problems, but they also have the advantage of being able to learn from the lessons and actions the developed countries made already, maybe decades ago. On the other hand, many solutions also exist, but they all make the environment even more difficult to manage: possibilities of networking, booming medical and health-related research and knowledge produced by it, alternative care-taking solutions, new and expensive treats and medicines, and promises of the biotechnology. From the public authorities point of view, the solution might be easy: outsource as much as you can out of this mess. Usually, the first ones to go are marginal operational activities, such as laundry, cleaning, and catering services. It is easy to add information systems to this list, but we believe this is often done without a careful enough consideration. Outsourcing is often seen as a trendy, obvious, and easy solution, which has been supported by financial facts on the short run. Many examples show that even in the case of operational information systems outsourcing can become a costly option, not to speak of lost possibilities for organizational learning and competitive positioning through mastering of information technology. In this article, we discuss how information technology and health care industry work together. Information technology is a valuable resource that must be managed within the health care industry. At the same time, information technology has the potential to renew the whole industry. Good practices in both must be supported by good IT governance. Health care is a big resource user in every country. In Table 1 we have percentages of health care expenditures in relation to gross domestic product in selected countries, where the percentage is very high (WHO, 2004). As one can see, the cost explosion phenomenon hits both rich and poor countries, even though the wealthiest countries are well presented in the list. Health care costs can be born by different parties within a national economy. For example, in the United States, the raising costs of health care born by the employers have been a topic of much academic and industry discussion (Berry, Mirabito, & Berwick, 2004). Sadly enough, there is controversial evidence whether information technology can lower the total costs of running health services (Ammenwerth, Gräber, Herrmann, Bürkle, & König, 2003; Ko & Osei- Bryson, 2004). There are few other forces than modern information technology that could cut down costs in the health care industry. In addition to cost cutting, information technology can provide extended productivity and is an ingredient in the processes that cumulate towards better care practices. But advantages from information technology are not to be harvested without constant focus on IT governance issues in the industry.

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