How to gain a competitive advantage with Health ICT

Opinion Paper

By David Lau, Industry Lead - Health at Optus Business

It's the big question occupying the minds of healthcare executives and policy-makers around the country: How do we maintain or improve our quality of care under increasing budgetary constraints?

Budgets are already tough enough, but they will only get tighter in years to come as Australia's population grows and ages. Allowing the level of care to degrade is unacceptable, but that's what will happen unless we attack the problem on two fronts. We need to:

  1. introduce large-scale preventative public health measures.

  2. improve the efficiency of the healthcare that organisations deliver.

In this paper, we will focus on the second front - how to get more value and better outcomes per dollar that we spend. And of all the factors that go into delivering healthcare, only one is sufficiently scalable and powerful enough to provide a meaningful improvement to efficiencies: information and communications technology (ICT).


There's no doubt ICT has become vital for healthcare in a lot of ways, yet many clinical processes are still very manual and reliant on oldfashioned media such as paper. This dependence on analogue processes is one of the main roadblocks to progress in the health sector.

Implementing well-designed IT systems can significantly improve efficiencies and lift the quality of care. These systems can enable medical practitioners and administrators to collect important data much more easily and consistently, and then quickly identify any meaningful discrepancies, trends or areas that need improvement. As a result, they can act promptly to improve efficiencies and outcomes in specific instances or across the organisation, state or nation.

In particular, IT systems can help:

  • improve the capacity to benchmark and assess the quality of care of a department or organisation

  • enhance compliance with policies and procedures, adding an extra safety net for patients

  • provide the evidence needed to redesign systems or complex processes for improved efficiencies and outcomes

  • aggregate data to develop new insights into regional and national populations and demographics, potentially enabling policy-makers to make better informed decisions

  • Apply contemporary evidence based decision support to clinical practice to reduce unwanted or unintended variation.


If the benefits of IT systems are so great, why aren't they used more widely? Because the health ICT sector is facing some huge challenges.

Perhaps the biggest hurdle is how heavily reliant the health sector is on government funding and as budgets tighten, the focus inevitably shifts to boost the number of doctors, nurses or hospital beds. Traditional thinking considers new technology as a much lower priority - particularly as systems that deliver meaningful benefits often require large capital expenditure.

That problem has been compounded by a series of high-profile ICT failures in the health industry. Organisations have spent sums over $1 billion and not achieved the results that were promised - so it's hardly surprising there’s a culture of scepticism.

These failures were due to a range of reasons, several of which are widespread problems throughout the industry:

  • Projects are too large. High-profile ICT projects often fail because the organisation doesn’t have the expertise to handle large projects, or because of poor planning or management. Due to the huge capital expenditure required, there's been a temptation to cram as much functionality as possible into each system. The result can be disastrous: a project that's too complex to track, an application that's too difficult to use or too many process changes for the organisation to handle.

  • Projects are too small. At the other end of the scale are the many small pilots which are created to solve a particular problem, but which often don't integrate with other systems or scale very well, or make a significant improvement to a process.

  • Outcomes are unclear or not measureable. It seems basic but this is a surprisingly common problem in health ICT. Without clear, measurable targets, the success of ICT projects is extremely hit-or-miss.

  • Applications don't cater for variable workflows. Compared to a typical corporate environment, where the aim is to standardise workflow as much as possible, medical processes vary quite a lot. As a result, it can be a real challenge to find the right software - or software combination - that delivers efficiencies while allowing the necessary variations between the workflows of individuals, departments and organisations.

  • Change management is poorly executed. The most valuable health ICT projects are those that fundamentally change an inefficient clinical process. Implementing these initiatives in a live clinical environment isn't easy and, unfortunately, many aren't accompanied by an effective change management program. One of the more common mistakes is not involving the right clinical staff in the planning and other key stages of the project.

  • Applications are difficult to use. Due to lack of planning, internal buy-in or testing, the user interface and ergonomics of new applications are sometimes poorly implemented.

  • IT departments don't have the right capabilities. Health organisations often have lots of small but important applications, so their IT departments are typically very reactive - spending much of their time desperately trying to manage everything. As a result, they don't have the capacity or expertise to deploy significant new projects, let alone create an ICT plan for the future.


To fulfil the promise of health ICT, we need to learn from past mistakes. Here are nine suggestions that may help healthcare decision-makers:

  1. Develop a widely accepted ICT roadmap. It seems an obvious measure, yet many health organisations don't have an ICT plan. But even for those that do, it's just as important that those plans align with their organisation's overall strategies and that they have buy-in from all key stakeholders. These plans need to be 'living documents' that are revised as technology and circumstances change over time.

  2. Undertake integrated smaller projects that deliver measurable outcomes. In the current risk-averse climate, don't pitch for a huge, ambitious project. Divide it up into stages that are more achievable. Each stage should provide significant improvements to one or more processes - and if it delivers measurable outcomes, you're far more likely to gain funding for the next stage.

  3. Prioritise high-return projects. Generally, some IT initiatives are designed to bring efficiencies and others to deliver better care or treatment. In today's capitalconstrained environment, take on projects that deliver the biggest cost savings first. That will free up more money for future investments.

  4. Get the right balance of interoperability. The temptation is to share as much data as possible between systems, but maintaining such a high level of interoperability is very expensive. Instead, focus only on information that is critical or high value: data, for example, that allows different departments and organisations to reliably identify a patient, view important medical alerts such as allergies, and other data only if the cost is quantified and regarded as acceptable.

  5. Drive change - but carefully. New systems are only effective if they significantly change or standardise processes. However, if you force change at the same time that you deploy a new system, all the growing pains will be associated with the system instead of the flaws in the original process. Separating the two may be a good idea. An effective change management program is also vital.

  6. Don't over-specify new systems. Aligning specifications with outcomes is vital to avoid the over-specification traps discussed earlier - and it can also help ensure new systems have enough flexibility to ease the change process. Why not allow individuals and departments scope to vary a process if it doesn't impact on the project's targets?

  7. Take a long-term view of procurement decisions. Ensure systems that you adopt in early stages don't highly restrict your options for future stages.

  8. Eliminate critical single points of failure. Is any important system dependent on just one IT person, and what would happen if that person left the organisation? Do your systems have redundancy? Do you have a disaster recovery plan? Can all vital clinical functions continue to operate if there's a system outage? How reliable is the underlying infrastructure, such as the fixed and wireless networks? Planning for the worst and eliminating potential disasters should be a key part of every ICT plan - especially in healthcare, where the stakes are high. This should include ensuring your IT team is adequately resourced and trained and external expertise is sought where there are gaps.

  9. Consider consumption-based IT. Cloud and managed services can potentially reduce costs and replace huge capital expenditure spikes with more predictable and manageable operating expenses. The key is to ensure they don't introduce new critical points of failure or produce over-reliance on a single vendor.


Finally, it's important for healthcare decisionmakers to understand the consequences of not acting now.

The economy and the industry are evolving quickly. Every health organisation is in a competitive environment - even government hospitals are competing for funding. So while early adopters gain the benefits of new systems, other organisations will find it increasingly difficult to compete. The cost structures of these laggards will be higher and their quality of care lower, so their stature will diminish. Patients and staff will look elsewhere, and with them will go the organisation's capacity for deriving sustainable revenues.

On the other hand, if you do move and others don't, a well-planned and -deployed ICT program will deliver a big competitive advantage.


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