The Enterprise: The Cost of Healthcare

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$1.9 trillion - that's the sum the U.S. spent on healthcare in 2004 (the latest year for which numbers are available). And it is projected to double in the next seven years. That $1.9 trillion reflects a spending boost of almost 8 percent, the lowest increase since 2000 (largely attributed to lower prescription drug sales), although it outpaces inflation and wage growth and amounts to a record 16 percent of the nation's gross domestic product (according to CMS). On a per person rate, combined healthcare spending by consumers, businesses and government totaled $6,280 in 2004, compared with $5,670 in 2003.

The U.S. healthcare IT market, according to a 2003 Gartner Group forecast, will grow at a compound annual growth rate of 7 percent to $47.9 billion in 2006 (from $34.1 billion in 2001).

While accelerating healthcare costs aren't good news for anyone, jumps in healthcare IT spending are, at least for those in this marketplace. And in the long run, IT will make a dent in healthcare costs.

If we look to forecast IT implementation in healthcare, we can look at where banking was 20 years ago when IT brought remarkable accelerations of productivity and efficiency and greater accuracy. That's what healthcare needs now, and we're well on the way.

But the next stumbling block for both industries is better enabling companies and people to work together. Collaboration in healthcare means integrating and interfacing systems to be able to tap into broader and deeper expertise and resources, whether they are clinical experts, information on allergies or medications, physicians linked via wireless handhelds or better data mining that can allow greater efficiency. Initially this is on an intra-facility or intra-enterprise level, working toward regional health information organizations (RHIOs) that are beginning to sprout and onward to President Bush's goal of EHRs for every American by 2014.

The key is for these resources to spread to facilities and physician practices large and small, which they are thanks to a combination of vision, peer pressure and healthy competition. But a lot of balance - in politics, reimbursement, trust and the concept of shared benefit - needs to be struck first. Further diffusion of technologies such as EMRs, PACS, wireless networks, reporting and scheduling software and handheld devices will mean greater productivity - which I hope also means a simpler and safer patient visit. We all want to get our money's worth.