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I.T. Progress at Smaller Hospitals


By Howard J. Anderson, Executive Editor February 1, 2008

America’s smaller hospitals are climbing aboard the clinical automation bandwagon. They’re turning to information technology as they look for ways to attract physicians to small towns and convince area residents that they don’t need to drive to the big city academic medical center to get high-quality health care.

“There’s a business case for small hospitals to do this,” says Tom Harlow, CEO at 70-bed Shamokin Area Community Hospital in Coal Township, Pa. “We are focusing on quality, value and service—How can we become the most efficient at delivering care at the highest quality level?”

The rural hospital, like many others, is moving to a digital environment to help it make the case to the 40,000 area residents it serves that they can get excellent health care close to home, Harlow says.

In Red Oak, Iowa, 25-bed Montgomery County Memorial Hospital is turning to clinical automation as a major incentive for big-city specialists to travel to the small town to treat patients once a week. “We have the good fortune of having visiting physician specialists who come here,” says Ron Kluewer, CIO. “We create an environment where the physicians like to come here, so we can attract a high-quality staff.”

More than 1,000 rural hospitals, including Montgomery County, have received federal designation as a critical access hospital. These facilities, which can operate no more than 25 beds, must be a certain distance away from the nearest hospital and offer emergency care. They can earn higher reimbursement rates from Medicare and Medicaid because of their essential role in providing care. Many then use this extra income to support aggressive I.T. initiatives.

Clinical Focus

Smaller hospitals are ramping up their spending on electronic health records and other clinical systems, following in the footsteps of larger facilities. Many have implemented online charting for nurses, but relatively few have enticed their physicians to enter data into EHRs.

“It used to be the main objective was to get the bills out,” says Steven Henkind, M.D., principal at Cardinal Consulting Inc., Larchmont, N.Y. Now small hospitals are investing in clinical systems to achieve their business objectives, he says. But their clinical automation goals often are “tempered by the reality of limited resources,” he adds.

A recent telephone survey of executives at 150 smaller hospitals confirmed that one of their biggest challenges is funding clinical systems. “They are behind the curve in implementing I.T., but they face the same business challenges as the largest health systems, especially attracting and retaining physicians,” says Angie Franks, vice president of marketing development for Dairyland Healthcare Solutions, a Glenwood, Minn.-based vendor that commissioned the survey and is now owned by Francisco Partners.

When it comes to working with software vendors, many small hospitals are putting all their eggs in one basket.

“Most cannot afford a best-of-breed approach or developing their own software,” Henkind says. “The smaller the hospital, the more likely they rely on one vendor to supply many of their needs.”

Most of the smaller hospitals that participated in the Dairyland survey said they prefer a single-vendor approach, Franks says. “Customer service is at the top of their list in what they want from a vendor,” she says.

Commenting on other survey findings, Franks adds: “Small hospitals tend to buy based on references, so they’re very interested in what their peers are doing.”

Shamokin hospital is relying on Dairyland for most of its applications because it lacks the I.T. staff to maintain and integrate systems from multiple vendors, says Kim Chaundy, information technology manager. It has a four-person I.T. department, up from three two years ago.

“The I.T. staff is so small that it would be too hard to manage multiple systems,” she says. By dealing with one primary vendor, the hospital eases training for I.T. staff as well as users, she notes.

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