Striving to be General Hospital

July 15, 2011, 6:38 PM UTC

When it comes to technology investment, some hospitals need a culture transfusion.

By Lisa Suennen, contributor

General Hospital is the longest-running American soap opera currently in production. What a perfect metaphor this is for the real hospital industry, which is facing more drama than ever.

This week I visited two hospitals, one a very large and well-known academic medical center, the other a very small community hospital. Fortunately, neither visit was as a patient. In both cases I was there to talk about healthcare IT and the hospitals’ respective IT strategies.

It is always interesting to talk with hospitals about how they want to use technology to enhance their operations. There is an inherent tension between budgetary constraints and wanting to do the right thing by patients. Often times the decision to provide better care can result in hospitals actually losing money, because it means that patients need fewer services.

It’s painfully ironic. Can you imagine a world where banks lost money every time they reduced the number of teller visits? There would be no ATMs.

The CEO of one of the hospitals I visited said that he fully recognizes that the implementation of certain technologies, such as electronic medical records, may well be a high-cost investment in quality that will never save them any money, but that it’s an acceptable price since they are committed to improving patient care as a matter of culture. In the very next breath he dismissed another technological advancement proposed because, “it wouldn’t save us any money.” Thank goodness that hospital has a strong psychiatric department…

Economic pressures are bearing down on hospitals in the form of reimbursement reductions, increased responsibility to pay for re-admissions within 30 days, higher salaries and regulations that withhold payment when patient safety errors are committed. Technology is a large part of the answer to creating more efficiency, greater productivity, and increased patient safety. However, the technology that most hospitals want to buy first is that which helps them speed up throughput (increase the number of patients they can see), improve billing and capture lost revenue.

Fortunately there are also very enlightened clinicians out there in the world, as there are at the two facilities I visited. Each organization is investing in technologies that will, in the long and short run, make a difference in both quality and cost. Getting to the concept of value is key to success in the evolution of our healthcare system. Hospitals must commit themselves to providing a product that delivers bang for the buck. It is a major cultural shift for them to think about themselves this way, but some are going there with gusto. It is these organizations that will thrive as our healthcare world turns.

Lisa Suennen is a co-founder and Managing Member of Psilos Group, a healthcare-focused venture capital firm with over $577 million under management.

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