Investments in IT in the healthcare sector often have a bad reputation, with cost overruns aligned with seemingly lackluster returns.  It’s an accusation that research from MIT suggests is somewhat unfair.

The promises of health IT are undoubtedly considerable and this has aligned itself with huge investment in recent years.  For instance, after the HITECH Act was introduced, some $30 billion was invested in electronic medical records and other forms of health IT in the US.  This meant that the adoption of electronic health records became nearly total by 2014.

Barriers to success

As in other sectors, there are numerous barriers to a successful implementation of digital technologies, however, be they complexity, competition, or cost.  Whereas there are similarities between healthcare and other sectors, the costs of mistakes in healthcare can obviously have significantly graver implications.

There can also be a lack of trust among medical staff of health IT, which coupled with a reluctance to change can slow progress considerably.  There are also considerable privacy implications given the inherent sensitivity of the health data IT systems have to manage.  The researchers believe that stringent privacy laws can reduce IT adoption by up to 24%.

Measuring the impact

Given the immense scale of investment in health IT systems, there has been an understandable desire to measure the clinical impact of this investment.  After reviewing nearly 1,000 papers investigating the impact of health IT, the authors were able to identify a significant positive impact on both healthcare productivity and patient outcome.

There was, however, significant variation, with the more successful implementations appearing to focus intently on communication and coordination between and across systems and hospitals.

What the investment in health IT hasn’t really been able to deliver is a reduction in costs, which is such a burden on a sector that stubbornly observes Baumol’s cost disease.  Indeed, the researchers found that costs tend to increase after adopting health IT as the staff takes time to learn the tools and experiment with the best ways to use them.

The benefits that are felt are unfortunately not distributed evenly across the healthcare workforce.  For instance, the analysis found that there has been considerable growth in the number of information technicians in the sector, with those roles also enjoying wage growth.  Such growth was, unsurprisingly, not felt by medical transcriptionists, whose work has largely been displaced.

The researchers believe their findings demonstrate that health IT typically complements IT workers rather than replacing them, albeit with some displacement occurring in the middle of the skill distribution, as we’ve seen in other sectors.

As innovation around the use of HICT continues to grow, finding ways to increase the skills of the labor force to complement the new technology can improve the wellbeing of the workforce while improving productivity at the same time.