Just as a fresh coat of paint won’t keep a crumbling house fromfalling, investment in an expensive new IT system won’t fix aflawed health care organization.

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That’s what many struggling health care providersfound when they forged ahead with new IT to meet electronic healthrecords (EHR) requirements. According to aBlack Book Market Research survey of health care providers,switching over to fancier new systems only made weaknessesmore visible.

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Black Book surveyed thousands of hospital and IT personnelinvolved in health system changeovers. Itreported that 87 percent of organizations that were strugglingfinancially before the 2011 mass movement to new systems began nowregret having done so. The fact that they had little choice offersscant solace.

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What were the symptoms of their financial distress? Black Bookfound that most prominent were higher thananticipated price tags for the new systems;dwindling in-patient revenue that trailed the expanding IT costs bya daunting amount; “disenfranchised” clinicians; layoffs andgeneral concerns over the sagacity of the switch.

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Digging deeper, Black Book asked if in-patient revenuewould eventually offset the investment in new technology. Fourteenpercent said their in-patient dollars were fading so fast theywould never recoup their investment.

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"It was a risky decision as hospitals were facing the fact thatthey would not be back to their pre-EHR implementation patientvolumes, inpatient or ambulatory, for at least another five years,"said Doug Brown, managing partner of Black Book, in astatement. "No other industry spends so much per unit of IT onthe part of the business that is shrinking the fastest and holdslittle growth as did inpatient revenues.”

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The survey also showed thattwo-thirds of IT staff (excluding managers) believethe switch negatively affected medical care, and nine in 10 nursessaid essentially the same. However, hospital executives didn’tagree; only 5 percent said the IT changeover negatively affectedhealth delivery. No big surprise there, said Brown.

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"In our experience polling, most executives will not admit theywere oversold or that their IT decisions had adverse bearing onpatient care," he said.

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Dan Cook

Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.