Hospitals are always angling to get their hands on the latest, greatest piece of medical hardware, and are willing to spend big bucks for it.
But the new must-have products don’t perform tests or assist in medical procedures. I’m talking about computer systems that run clinical and business operations at hospitals and health care networks.
The health care world is changing fast, and information technology is the organizational backbone that hospitals are depending upon to help them adapt. The federal government is pushing for electronic health records and new reimbursement systems that emphasize flat fees rather than a la carte medical charges. That’s driving the demand for expensive software.
How expensive? Partners HealthCare — the giant parent organization of Massachusetts General and Brigham and Womens, among other hospitals — recently signed off on a new system that will cost at least $600 million and take years to fully implement. The real final tab is anyone’s guess. (Partners declined to take a shot but said it has not budgeted more than the published sticker price so far.)
Why was it so important to spend that kind of dough on new software?
“Generally, we’re only as good [at] managing patients as what we know about them,” says David Blumenthal, who is the chief health information and innovation officer at Partners. “If your goal is to significantly improve the efficiency and quality of care, we simply can’t do that with the systems that we currently have.”
One last holy-cow financial number: Partners is ditching some of its existing software to make room for the new system, and taking a write-down of $110 million on the old stuff, some of which isn’t that old.
This is not the typical experience. Partners is spending more — much, much more -- than other hospitals and health networks in Massachusetts to upgrade or replace software systems.
Meditech Inc., a Westwood company that practically owns the community hospital software market in the state, estimates the average amount its smaller customers might spend on a new system at $2 million to $3 million.
So why on earth does Partners need to spend so much money on its system? And what does that price tag mean for other hospitals and health systems effectively competing with Partners for patients?
When it comes to price, it’s only fair to acknowledge the sheer size of Partners, which includes nine hospitals and a big physician organization. More importantly, research, a huge educational operation, clinical trials, and general care make Partners more complex than any other health provider in the state.
Partners chose to buy software from Epic Systems Corp., the Four Seasons of hospital information technology providers. Customer satisfaction is never in doubt, but it comes at a price.
Epic is a popular vendor to big, complex health care providers around the country. Kaiser Permanente, a giant California system that cares for more than 9 million patients, signed off on a $4 billion Epic system. Yale New Haven — considerably smaller than Partners — bought a $250 million system from the software company.
I have a common reaction every time a hospital executive tells me how computer technology will help doctors track patients and their care, to make sure everything works the way it should. So I asked Blumenthal: Weren’t you paying attention before?
The answer is yes, sort of. But information doesn’t always follow patients around very consistently. The fact that you have to fill out a new clipboard full of information at every specialist office is a sign of something.
The leading Partners hospitals used to write their own medical software, and those days are ending with the new Epic contract. Blumenthal is relying on a leading vendor to supply a software platform, but most of that $600 million will be spent customizing a system around the expertise and needs of Partners doctors.
Partners, says Blumenthal, is reorganizing the way it manages care for thousands of patients, and its new software is the information system that will make that possible. He doesn’t think of the big plan as a software launch. “It’s a clinical redesign project,” he says.
Partners does seem to be reorganizing aggressively for the future, and that’s a good thing. But it’s much harder to say where that leaves other hospitals and health systems, which don’t have comparable riches available but are competing for the future.Steven Syre is a Globe columnist. He can be reached at firstname.lastname@example.org.