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Health organizations have often been treated like manufacturers who are advised to use cheaper materials. The result is the manufacturer may save money. However, simultaneous defects may accumulate. The same thing is true when health organizations cut cost. Although the negative effects are not externally evident, they are felt. When health organizations provide poor services, make errors, or otherwise fail, it could be an indication of systems being poorly sustained (National Research Council, 2012).
When health organizations operate inefficiently without proper funding, the odds become stacked against them. Operational inefficiencies exist in the utilization of HIT and documentation of individual health care information throughout health organizations. Operational inefficiency is void the right people, processes, and technology impacting the ability to enhance productivity and worth of business operations. This can result in routine operations cost rising for businesses (Operations Research, 2007). An estimated 1.5 billion Americans are harmed each year by medication errors, presuming there are 400,000 medical errors each year, with an estimated cost of 3.5 billion (Arsenault, Cudney, & Luchsinger, 2008).
Biotechnology Council estimated administrative costs take 19 to 24 cents out of every dollar the United States spends on health care. Consequently, they recommended HIT as a solution to reducing this cost (Doyle, 2006). This is illustrated in Figure 1.
Figure 1. Cost per dollar estimates
Key Terms in this Chapter
Health Organization: A community for creating health work and coordinating the efforts of all health agencies. For the purpose of this article health organization refers to all types of health agencies.
Health Insurance Portability and Accountability Act of 1996: (HIPAA; OCR Privacy Brief, p. 1) “Public Law 104-191, was enacted on August 21, 1996. Sections 261 through 264 of HIPAA require the Secretary of HHS to publicize standards for the electronic exchange, privacy, and security of health information.
Information Systems (IS): The collection of hardware, software, data, procedures, and masses that produce information.
Electronic Health Record (EHR): Also known as Electronic Medical Records (EMR). Certification Commission for Healthcare Information Technology Commissioner meeting minutes of April 15, 2008 related that the work group addressing the terms EMR, EHR, and PHR would like to retire the term EMR and take the definition of EHR to present future vision (Certification Commission for Healthcare Information Technology, 2008 AU31: The in-text citation "Certification Commission for Healthcare Information Technology, 2008" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. ). For the purpose of this study and consistency the term will be EHR. These terms are used interchangeably. EHR is information on an individual that conforms to nationally recognized interoperability standards and that can be created, managed, and consulted by clinicians and staff across multiple health care organizations.
Health Information Technology Interoperability: The difference between an EHR, which can exchange information within HIT systems, and an EMR, which cannot.
Business Process Reengineering (BPR): Originated in the 1950s to explore the potential impact of computers on the efficiency and effectiveness of their business processes.
Health Information Technology (HIT): The all-inclusive management of medical information and the protected exchange between health care consumers and providers.
Information technology (IT): The processing of data by the use of a computer; the use of technologies electronically from computing, telecommunications.
Health Information Organization (HIO): An entity that governs the exchange of health-related information among organizations according to nationally recognized standards.
Health Information Exchange (HIE): The process of reliable and interoperable electronic health-related information sharing conducted in a manner that protects the confidentiality, privacy, and security of the information.