Lengthy cover story yesterday at Information Week on the use of information technology to reduce costs in healthcare.
What’s interesting about this article was the discussion of how the uses of IT to reduce healthcare costs have become the providence of early adopter Human Resources and benefits managers – not the CIO or IT manager.
The other thing that was interesting were the numbers – which were staggering. Check these:
Employers today pay 78% more and employees 64% more for health care than they did in 2000 (source: Towers Perrin). This year’s expected 8% hike in health-care expenses marks the first time in years that growth wasn’t in double digits, largely because of fierce cost fighting by companies.
American Standard Cos., a diverse manufacturer best known for its faucets and toilets, last year spent $190 million (!) on health care for its 20,000 U.S. workers. That’s $9500 per employee on revenues of almost $10 billion last year. The company expects its health care costs to average $240 million per year ove rthe next five years – a whopping $1.2 billion.
Towers Perrin estimates the average cost of health-care coverage per employee in 2006 would have increased by $750, instead of $597, had it not been for companies’ major cost-fighting efforts – often with IT.
The article divides companies using IT to contain healthcare costs into two categories those that use IT to help employees live healthier lives and make better health-buying decisions, and those use tools to analyze their insurance costs to look for places to cut costs.
The article also mentions that big businesses continues to pressure doctors and hospitals to more quickly adopt electronic medical records, E-prescriptions, and other IT systems in their practices to lower costs and improve care.
More after the jump.
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