Health Care & Medical:<BR>Prognosis Good For Key Patient-Care IssuesHealth Care & Medical:<BR>Prognosis Good For Key Patient-Care Issues

For instance, Nelson says compliance with HIPAA regulations--federal standards for electronic health-care transactions, patient privacy, and security--will help reduce from an average of 10 to one the number of papers needed for some health-care transactions. But when Nelson recently asked a hospital executive about the effect that will have in terms of reducing the number of people working in the facility's administrative roles, "it was apparent that process change wasn't part of the technology adoption for HIPAA" at the facility, he says.

For Kindred Healthcare, a significant part of its IT budget, which is holding stable this year at about 2.5% of the company's $2.3 billion revenue, is earmarked for HIPAA-related compliance, CIO Chapman says. Kindred has completed compliance work for transaction sets, which spell out standards for processing electronic health-care transactions for payment. Part of its HIPAA-compliance work and IT strategy of standardizing IT architecture for economies of scale is migrating 800 servers and 9,000 desktop systems to Windows 2000.

Next year, Kindred will roll out automated patient-care records at its hospitals and is looking to upgrade its pharmacy system to provide more real-time information that will alert doctors to patient drug allergies and other potential problems, something that's sorely needed. "As an industry, there's an average of one medical error per patient stay," Chapman says.

For health-care companies, IT is critical for eliminating those errors, improving patient care, and making their businesses more efficient.