Information Technology

The broad term information technology (IT) is used to describe computer-based tools, techniques, and methods used for the storage and delivery of information. IT covers equipment (hardware), processing capabilities (software), and communication methods (networks) for the delivery of information.

IT has become a household technology to retrieve information from the Web and for communication between users using e-mail. However, business users constitute the largest group of consumers of IT. Business uses of IT cover the areas of enterprise resource planning (ERP), customer relationship management (CRM), and supply chain management (SCM). The key element that is the foundation for all IT applications is data warehousing, which makes it possible to retrieve and process data for the production of useful and meaningful information for reporting and decision making.

ERP applications in a health care organization can include financial planning, accounting, patient registry, staff scheduling, assignment of personnel, and management of inventories. Management and procurement of supplies with business partners is accomplished through SCM applications. CRM applications are designed to create superior value for the customer. Such applications in the health care industry may cover efficient promotion, sales, marketing, and services to patients and potential patients. CRM applications are designed for effective customer acquisition and retention through superior management of communication with customers. Hence ERP applications cover information requirements within an organization, SCM applications manage information transactions with suppliers, and CRM applications deliver a more meaningful interaction with current and potential customers.

Health care organizations can benefit greatly from IT in improving the delivery of services. In a recent report in the Wall Street Journal, the most IT-enabled hospitals scored better than the national averages in terms of lower mortality and fewer medical errors (Landro, 2002). Several laws (such as the Balanced Budget Act of 1997) and reports (Institute of Medicine reports of 2000 and 2001) are making it mandatory for hospitals to reduce medical errors and deliver safer, high-quality service (Williams, 2002). In response to such concerns, a medical consortium called Leapfrog plans to implement its computer physician order entry (CPOE) systems in over a thousand hospitals by 2004 (Brewin, 2002). Such trends in the adoption of IT can result in cost-effectiveness and superior quality of services, thus aiding both the business, clinical, and patient dimensions of health care.

Several hospitals are pioneering in the use of IT and are able to save money, provide better care, and use staff more[Page 292] efficiently (Joch, 2002). Kaiser Permanente’s use of data warehousing technology was very effective in dealing with the anthrax crisis in Washington, D.C. (McGee, 2001). There is also a move in the pharmaceutical industry to automate the delivery of information and ordering of prescriptions through IT applications. Pfizer and Merck have teamed up with major IT vendors to market a wide range of applications to 650,000 physicians (Romano, 2001). Other applications that are being adopted cover management of business transactions with suppliers and effective communication with patients, enhancing the overall service provided by physicians, clinics, and hospitals.