E-ffective healthcare

The use of information and communication technologies in the health sector lags behind its use in many other parts of the economy, yet the advantages and potential savings are evident. Policymakers can do much to help close the gap.

Juanita Doe lives on Formentera, a remote island in the Balearic archipelago. Although Formentera attracts five times its population in tourists every summer, access to specialist emergency care has been the island’s major predicament. There are not enough people living on Formentera yearround to justify supplying the local hospital with all the highly-skilled personnel and equipment that can be found in a major city. So, when Juanita’s husband had a stroke, she feared the worst.

During a stroke, every minute counts and access to neurological care soon after onset of initial symptoms makes the difference between life and death. But Juanita’s husband is one of the many patients who have been treated successfully through the Balearic Telestroke programme since it was first established in 2006. Through the use of advanced video-imaging technologies, broadband and electronic health records (EHRs), neurologists from the capital city, Palma, can today provide life-saving remote care. This is not second-best treatment: the quality of care provided is proving to be every bit as high as that given to those physically present in Palma.

Jens Doe is a Swedish pharmacist. Like all his colleagues in Sweden, when giving patients the medicines they need, he no longer has to try to interpret the bizarre hieroglyphs that some doctors think pass for writing. Instead, doctors input the necessary information directly into an e-prescription system, which can be accessed directly by Jens. Processing prescriptions has become safer, quicker and easier in Sweden since Apoteket, a state-owned company selling pharmaceuticals, made a decision in 2001 to deploy e-prescription nation-wide. The system in Sweden has virtually eliminated the transcription errors associated with paper prescriptions. It also picks up safety issues, making sure that over-prescribing is avoided, that generic drugs are used when possible, and that potential drug-drug interactions are signalled automatically. Overall, customer satisfaction has been improved, with doctors and pharmacists each saving as much as 30 minutes per day, allowing staff to provide new services that help diversify the pharmacy’s revenue base.

John Doe lives in the US state of Massachussets, where he has access to some of the best quality healthcare in the world. John is fortunate enough to have healthcare coverage, but would rather that it did not cost so much. A major challenge across the state is the rising premium inflation. Recently, he was thrilled to find that since joining the New England Healthcare Electronic Data Interchange Network, a consortium of providers and payers, his care provider had made massive savings in the costs of administrative functions, such as billing, patient scheduling and paper forms. Claims that previously cost $5 per paper transaction are now being processed electronically at 25 cents.

The three Does are fictitious characters, but their situations are real and increasingly common, as analysed in a new OECD report (see references). Their examples show how greater use of information and communication technologies can improve quality of care and reduce costs.

But making sure that IT is in place is only the first step on a long and difficult journey towards taking full advantage of these technologies in healthcare. Indeed, it is fair to say that while the potential gains from greater use of these technologies have been apparent for years, most countries are still facing major implementation and adoption challenges, and their use in the health sector lags way behind many other parts of the economy.

There are three main reasons for this. First, the way healthcare is financed and organised can create disincentives for physicians in pursuing these systems. For example, good quality electronic health records can improve disease management and save unnecessary tests. But the main beneficiaries from the use of these records are often going to be patients and payers, whereas the costs of purchasing and inputting routine data into the systems falls on physicians, hospitals and other healthcare providers. Doctors might well gain something as well–as in the case of Jens Doe–but perhaps not enough to justify the considerable investment. Hence, many countries have put subsidies and special incentives programmes in place to motivate doctors to use these systems in clinical care. Clearly, what is needed is a “business model” to ensure that those who benefit from e-health technologies can compensate those whose costs go up.

A second reason for the low IT uptake concerns privacy issues, which are particularly sensitive in healthcare. People worry about possible security breaches and their medical records being too freely accessible. The trouble is that the regulations put in place to guarantee privacy also often prevent the potential gains from easier access. For example, in the Canadian province of British Columbia, an unintended consequence of the commitment to protect privacy has been to prevent government from accessing critical health data to carry out the studies they need to improve services. Striking the right balance is a key policy challenge.

The third reason is the health sector’s own very mixed results with large-scale e-care projects. Health systems have remained largely like cottage industries, with a fragmentation that inhibits the economies of scale and scope that have spurred technology diffusion in other sectors. Effective system-wide exchange of medical information continues to be logistically difficult. In addition, too often, projects have been started without the clear systems that are needed to make progress, for instance, setting the objectives in terms of the health gains expected or introducing the appropriate workflow redesign, change management, education and training. This lack of governance is also reflected in the absence of reliable monitoring systems and good ways of assessing the effectiveness of the IT investments. The three Doe examples from Spain, Sweden and the US are among the few that have been evaluated properly and where oft-trumpeted gains from investment in e-health can be quantified.

The message is simple yet urgent: the sustainability and affordability of health systems is a growing challenge, and information and communications technologies are key for ensuring value for money. But realising this potential will not happen by market forces alone. Governments will need to intervene to overcome the difficulties in ensuring that e-health improves the quality and efficiency of healthcare.


OECD (2010), Achieving Efficiency Improvements in the Health Sector through ICTs, Paris.

OECD (2008), “Medicine and the Internet: A healthy relationship?” in OECD Observer No 268, June. Visit www.oecd.org/health  

©OECD Observer No 278 March 2010

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