Information Technology in Healthcare

Creating a stronger healthcare system

Madhav Ragam

Madhav Ragam

Director Healthcare & Life Sciences IBM Asia Pacific Singapore.


While improving computer systems would not eliminate all medical errors, researchers believe it will reduce the errors dramatically. Now is the time to share progress, challenges and best practices to enable interoperability and link the ecosystem in the delivery of better quality care.


Rising costs, ageing population and antiquated healthcare systems have put pressure on governments, businesses and society to make significant changes in the delivery of care.

These challenges, combined with the emergence of a new environment driven by globalisation, consumerism, demographic shifts, increased burden of disease, expensive new technologies and treatments are expected to force fundamental change on healthcare within the coming decade.

One of the great ironies of modern medicine is that while many of us enjoy the benefits of scientific discovery and sophisticated equipment, many patients across the globe do not receive adequate standards of quality care due to a variety of issues underpinned by the application of insufficient resources and fundamental technology inefficiencies.

In countries where information technology is commonly used for services such as banking, telecommunications and entertainment, many medical organisations today still rely on paper records for the delivery of their service.

Furthermore, most existing medical electronic systems don’t interact, which means that important information is often isolated and disconnected. While physicians keep their own records, they do not have access to information about the care their patients receive outside their offices. Hospitals rarely have access to these patient records and emergency room doctors know little about patients’ pre-existing conditions. This often results in redundant tests and assessments, increasing the cost of care and missed diagnoses or treatment resulting in injury.

Such disconnects across the world’s healthcare systems are causing an increase in poor health outcomes and in some cases even death.

A recent Institute of Medicine (IOM) report found that preventable medical errors kill up to 98,000 people each year in the United States alone. While improving computer systems would not eliminate all medical errors, many researchers believe they will reduce them dramatically.

In addition to saving lives, we at IBM believe between five and 20% of all healthcare costs could be saved by eliminating unnecessary tests. This view is supported by The Economist, which recently reported that redundancy and inefficiency account for between 25% and 40% of the US$3.3 trillion the world spends on healthcare every year and that this could be eliminated with proper IT implementation.

Change must be made. Healthcare systems that fail to address the challenges of the emerging environment will “hit the wall” and require immediate and major forced restructuring.

The choices left to stakeholders of today’s healthcare systems are when and how. If they wait too long or do not act decisively enough, their systems will be unable to continue on the current path. This is a frightening, but very real prospect.

Which direction will the industry take?

The answer is complicated. The healthcare ecosystem is extremely complex, based on intricate relationships, often with differing motivations. Most agree the chief goal is to improve healthcare systems to provide better quality service to more people, more efficiently and at lower cost. How to achieve that goal, however, varies widely by stakeholder. These complex factors create an urgent need to break down industry silos, establish partnerships and increase collaboration to drive progress.

That’s why IBM has taken a leadership role in the global healthcare transformation. It is working with major ecosystem stakeholders—ranging from healthcare providers and standards bodies to governments and other employers—to influence the adoption of a consumer-driven model.

This emerging, patient-centric model focuses on improved outcomes through disease management, prevention and well-being programmes. It gives consumers greater control over their healthcare, including in the selection of primary care providers and access to information needed to make better healthcare decisions.

Clearly, technology plays a key role in patient-centric healthcare by enabling the fast, efficient and secure flow of digital information between patients and their doctors. Moreover, it provides the tools to improve clinical decision making, collaboration, efficiency and administrative processes.

Fortunately, much of the technology needed to enable patient-centric networks is available today. But the transformation to a patient-centric model will require more than technology—it requires innovation and a shift to more open, collaborative and integrated systems. There remains a great deal of work to be done around standards, governance and workflows, which is critical to the easy flow of information within the healthcare ecosystem.

An Asia Pacific portrait

Asia Pacific Healthcare market is currently the smallest in size out of the 3 geographies—the US and Europe being the other two. However, it is exerting a tremendous influence on the global healthcare scene, for example:

— There is an expanding interest in medical tourism across Asia with India, Thailand and Singapore paving the way

— Many of the leading pharmaceutical companies are moving clinical trials from the US and Europe to India

— The Philippines is renowned as a leading exporter of highly skilled nurses around the globe

— The US has turned to Indian and Australian companies for the outsourcing of radiology readings and

— Australia has enhanced the US’s Diagnosis Related Groups (DRG) system, which was subsequently adapted by Singapore, France and Germany.

According to the World Health Organisation (WHO), the Health Systems Statistics vary significantly across the world’s developed and emerging countries. In the case of Asia Pacific, WHO claims inequitable health systems are preventing many Asia Pacific nations from meeting international goals set on health and poverty. Furthermore, the healthcare systems of many Asia Pacific countries are failing to deliver services of adequate quality, often using resources inefficiently or inappropriately.

The graphs from the WHO 2005 statistics for Health Systems highlight the healthcare facts and figures of relevance to key Asia Pacific countries and compares them to some of the world’s most developed countries.

In these graphs, India, China and Malaysia clearly stand out as having a significant low number of beds, physicians and nurses for every 10,000 people in their respective countries. As a result, we expect to see exponential growth of the healthcare industry in these three countries while the more developed countries will focus on reining in the healthcare costs and improving quality.

hospitals beds per 10000Linking the healthcare ecosystem

In all of the world’s markets, the healthcare industry functions as an ecosystem, with its various constituents, rules and interactions.

Currently, that ecosystem is plagued by a number of pervasive issues including: poor communications among constituents resulting in fragmented patient data and poor coordination across the continuum of care; inadequate information on quality and outcomes, worrisome patient safety issues; and misaligned financial incentives that focus resources on episodes of care instead of preventive medicine and long-term care outcomes.

These ecosystem issues have resulted in a strong interest across several countries to leverage technology (healthcare interoperability) in order to create regional electronic patient information exchanges. The basic concept is that these exchanges will provide physicians with the patient information they need at the time treatment decisions are made—e.g: what prescriptions is this patient on? what tests has he/she received? etc.—which in turn permits a substantial increase in the quality of care, patient safety and efficiency gains.

More than just data sharing utilities, these regional electronic patient information exchanges are also envisioned as places where community constituents can experiment with new business models to address the lack of incentives or the perverse incentives built in the existing reimbursement system, both for their own benefits and the greater good of the community.

To further illustrate these points, figure 1 indicates the typical stakeholders in a healthcare ecosystem, the initiatives that are of interest to them and the types of solutions that IBM can offer.

At the early stages of an initiative, it is key to carefully approach planning, constituent participation/buy in, governance, legal entity creation, and overall strategy in order to find the most effective and efficient path to success. Multiple technical options exist to set up a community and regionally based information exchange and IBM of course has strong competency in this area.

Establishing a sustainable multi-stakeholder business model is a bit more complex, given the well known value imbalance between providers and payers.

However, a range of potential redistribution mechanisms and incentive programs do exist and IBM is prepared with a methodology and financial model to assist with these critical planning and organisational milestones.

IBM’s financial model assists in creating a safe way for competitive constituents within the Healthcare Ecosystem to conduct meaningful and critical conversations regarding cost and benefits. The key and most elusive success factor in deploying a community or regional network is the will and ability for multiple constituents to work together on a sustained basis.

Leadership, accountability and collaboration for a win-win transformation

The transformational challenge facing many healthcare systems globally is daunting. It often needs to be achieved with limited incremental funding in an increasingly competitive global economy and healthcare environment. The task will require the establishment of a clear, consistent accountability framework supported by aligned incentives and reconciled value perspectives across key stakeholders.

The rewards of successful transformation are high, but will require all stakeholders to actively participate, collaborate and change.

Much of the computing infrastructure for modern systems already exists. What is now required is leadership, accountability and collaboration among governments, businesses and the community to embrace healthcare ecosystem integration. If governments are prepared to initiate change, they will need partners to implement it. Companies like IBM already have the track record of implementing successful e-health integration projects.

IBM sees the industry progressing in steps—from today’s world of siloed processes and technologies, toward patient-centric Networks where information is shared seamlessly across the healthcare ecosystem. IBM can provide end-to-end industry and technology expertise to link business processes to IT. We can help with the business planning, funding, solution development and delivery of a full end-to-end national healthcare information networks (NHIN) initiative. We can assist with the promotion and adoption of open standards to help with the integration efforts of NHIN projects. We have the capability to build and run the infrastructure for an NHIN system.

More importantly, leaders in the healthcare industry internationally are recognising the value of NHINs, as evidenced at The Asia Pacific National Healthcare Information Network Forum 2006. The forum, hosted by IBM Asia Pacific from 27 to 28 February 2006 in Beijing, China, brought together international thought leaders and practitioners in healthcare to discuss current industry challenges; the best approaches to NHINs; how to develop global NHIN standards; and share ideas about best practices for healthcare interoperability.

The change is definitely occurring. Now is the time to share progress, challenges and best practice to enable healthcare interoperability and link the ecosystem in the delivery of better quality care.