Information Technology in the Health Care Industry

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Proceedings of the 33rd Hawaii International Conference on System Sciences - 2000

Information Technology in the Health Care Industry: A Primer Peter B. Southard, Soongoo Hong, Keng Siau Department of Management College of Business Administration University of Nebraska-Lincoln Lincoln, NE 68588-0491 USA E-mail: psouthar@unlserve.unl.edu, shong@tamiu.edu, ksiau1@unl.edu

Abstract
The paper discusses current and future applications of information technology within the healthcare industry. It presents some broad strategies for approaching information technology investments and various tools available.

1. Introduction
Today, information technology is considered not just a supporting tool but a “strategic necessity” by world class organizations. As competition increases, the use of more sophisticated information technology tools and techniques, such as information warehousing and the Internet, is imperative in order for organizations to obtain a competitive advantage. The health care industry, with its shifting regulation, is not immune from this escalating wave of competitiveness. Information has been developed regarding how a company should approach capital expenditures in information technology but none of it appears practical with regards to this particular segment of industry. This paper discusses how health care organizations should approach information systems investments. It also discusses how information technology can support the medical providers’ competitive strategy.

avenue for communication in both research and health care marketing. Most hospitals and clinics in the 1970s and 1980s implemented hospital information systems for administrative purposes as a way to deal with patient admission and billing processes. In the 1990s, health care organizations started to use information systems for clinical purposes to improve patient care [1]. Health care organizations (providers) must carefully plan how to use scarce assets in order to best compete. A structured framework is the best way to allocate those capital investments in information technology.

3. Information Technology Strategies – Proposed Framework
The framework for evaluation consists of three basic steps: 1) decide what goals the health care organization wants to accomplish, strategically, 2) decide what tools can accomplish the goal most effectively and, 3) decide how and when to measure the accomplishment of those goals. While these steps sound simplistic and common sense, it is how the health care organization approaches them, which makes them unique.

3.1 Strategic Analysis

2. Background
Information systems have been employed in health care organizations for almost three decades. The information systems currently utilized by the health care organizations generally fall into three main areas: transaction processing systems, management information systems, and decision support systems (DSSs). In addition, a few organizations have begun to use the Internet as an

The first step for a health care provider in evaluating the opportunities presented by information technology is to develop a strategic plan. This plan must include a strategic analysis of the industry and of the individual provider through the establishment of goals and priorities, decisions made regarding the control and architecture of the system, analysis of the effects not only on the MIS department but also the other functional areas, and evaluation of the infrastructure and management issues associated with new technologies. Health care organizations that are

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Proceedings of the 33rd Hawaii International Conference on System Sciences - 2000

considering moves into more advanced information technology must realize how important and comprehensive their strategic plan must be. Investing in information technology merely because the competition has done so is a common but shortsighted goal. The strategic analysis begins with...
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