The Development of Healthcare and Information Technology

The development of healthcare and information technology reflects a significant evolution in how health services are delivered and managed, particularly from the late 20th century to the early 21st century. Initially, the integration of information technology into healthcare was slow, influenced by cultural, organizational, and financial barriers. The first notable efforts began in the late 1960s, with hospitals like El Camino Hospital pioneering the use of computerized systems. Over time, as pressure from payers and rising healthcare costs increased, the adoption of technologies such as electronic health records (EHRs) and clinical decision support systems (CDS) gained momentum.

By the 2020s, EHR systems became commonplace, with a significant majority of healthcare providers utilizing them to streamline patient information management. These systems facilitate better decision-making, improve patient outcomes, and enhance communication between healthcare providers and patients. However, challenges remain, including concerns over data privacy, integration complexities, and the potential for technology to disrupt traditional care practices. Overall, the intersection of healthcare and information technology continues to transform the medical landscape, shaping how care is provided and experienced across diverse populations.

Published in: 2023

By: Kreidler, Michele L.

Subject Terms

The Development of Healthcare and Information Technology

Abstract

One of the greatest forces of change in the twenty-first century is the impact of information technology, which affects our communications, entertainment, personal finances, and our ability to know about the world around us. Ironically, this technology was slow to impact us at a most personal level—how we find and receive healthcare. This article looks at the development and application of information technology to healthcare delivery and will provide a brief analysis of why healthcare technology lagged behind other industries as well as at some of the new technologies that are transforming the delivery of healthcare in the US.

Overview

Though ubiquitous in the healthcare industry in the 2020s, the application of information technology has been an uphill climb hampered by a variety of cultural, organizational, and financial factors. Early efforts at clinical applications in healthcare began in the late 1960s. One of the first hospitals to embrace the potential of emerging computer technologies was El Camino Hospital in Mt. View, California. Designed by the Lockheed Missiles and Space Company, the system installed at El Camino was an extension of its computer applications developed for the space industry. Technicon Corporation provided management for the project. The system had two functions—computerized physician order entry and documentation of nursing activities. Despite the promising start represented by El Camion, there was a general reluctance on the part of healthcare providers to adopt emerging technologies. As a result, information systems and other technological advances in healthcare significantly lagged behind other industries such as manufacturing, finance, and telecommunications.

Although many stakeholders in the healthcare industry recognized the potential importance of computers, initial applications were limited to a handful of researchers, hospitals, and forward-thinking physicians. The National Library of Medicine (NLM) emerged as an early leader in the field of medical informatics. Driven by the need to computerize the Index Medicus, the nation's leading reference for biomedical research journals, NLM designed and built MEDLINE in the 1990s, an interactive, searchable, networked database that linked academic and research institutions to NLM's central computers in Bethesda, Maryland.

The earliest successes in adapting technology to the healthcare industry primarily addressed business functions, first in hospitals and later in private physician practices. The applications consisted of financial management information systems encompassing accounting functions (collection of revenue and expenditure data) and financial functions (planning and decision support). Data was used for reporting purposes and in financial planning to construct simple what-if scenarios (Smith, 2000). Other applications included routine operational procedures such as scheduling and patient information databases. As computing technology and capabilities increased, networking systems were developed that allowed providers to link with payers and automate claims processing and accounts payable.

The nonbusiness side of information technology continued to lag considerably behind the development of financial and administrative computing functions until the 1990s. Increasing pressure from payers (government, employers, and insurance companies), rising costs, and increasing technological capabilities combined to propel health information systems forward. The result was the development of applications beyond the routine processing of administrative functions and a shift to what Tan and Modrow (1999) call a "new paradigm" in healthcare information technology. This new paradigm was the application of technology for building computer models and knowledge-based systems to support clinical decision-making (Tan & Sheps, 1998).

Despite the acceleration of technology adoption in healthcare, there still existed barriers to full integration. In this essay, we will look at the obstacles that hindered the adoption of information technology in healthcare and then will consider two specific applications that transformed the art, science and practice of medicine: Decision support systems and electronic health records.

Obstacles to Information Technology (IT) in Healthcare. The obstacles to the full adoption of technology in healthcare were categorized into three areas: cultural, organizational, and financial.

Cultural. The organizational culture of healthcare is one that is dominated by physicians. Physicians assumed their central role of authority since the movement out of family-based medical care and into the scientific era of modern medical practice beginning in the early 1920s and 1930s. This role has been maintained through the apprentice-based training model, the tight network of collegial relationships, and the trust and status that society has granted the profession of medicine.

The advent of computers in the early 1960s saw two types of responses by physicians in relation to technology and their position of authority in the delivery of healthcare. The responses were almost diametrically imposed. The first was the assumption that integrating computers into medicine would have no effect on the physician's practice of medicine. Information technology (IT) was perceived to be remote from clinical care, much like business or maintenance operations—necessary and important functions but ancillary, not integral, to their work, i.e., caring for patients (Shortliffe, 2005). The opposite view was the perception that computers might eventually limit or even diminish their role in patient care and thus were viewed as a threat to physician autonomy (Bernstein, 2007). Many physicians, as well as other patient care providers, were also concerned about issues of confidentiality.

Organizational. Unlike many other industries, healthcare was characterized by fragmentation—many players, and little coordination (DePhillips, 2007; Shortliffe, 2005). Even physicians, in their pivotal role in patient care, got lost in the tangle of various and diverse service providers, technicians, office staff, administrators, and so on. Middleton (2005) observed that the failure of IT to be fully adopted into healthcare systems was a lack of an adequate business model. For example, physicians generally were not employees of a hospital or a health system but independent businesspeople. They had little incentive to align themselves with administrative efforts to install IT systems, especially if they did not see the value in it for themselves. Strong leadership was needed to get physicians on board with IT initiatives so that they become part of the planning as well as implementation process rather than having new IT initiatives thrust on them (Bernstein, 2007).

Financial. The planning and implementation of IT systems was expensive, time-consuming, and disruptive to a medical staff already fully consumed with patient care and other administrative and operational responsibilities. Many local and regional hospitals were not-for-profit organizations and did not have the capital resources to invest in IT without significant sacrifices in other areas of operation. Middleton (2005) pointed out an asymmetrical risk and reward for hospitals and physician practices that acquire IT systems. Third-party payers and managed care organizations were pushing for the implementation of IT because the benefits of reducing costs, reducing errors, and providing efficiencies in the delivery of healthcare were well-documented. However, it was the providers who were paying for the IT systems while the payers reaped the rewards at lower costs. Middleton cited a study by Johnston et al. that found that implementing a computerized order entry system in physicians' offices realized an 11 percent gain for the providers but an 89 percent gain for payers. Kleinke (2005) noted that IT in healthcare was a classic case of market failure and that it was time for the government to step in and help with a “third hand” to create a national health IT system that would both reduce costs for all the stakeholders in healthcare and improve the quality of care.

In 2009, the Obama administration stimulated the development of an electronically connected health-care system with the Health Information Technology for Economic and Clinical Health (HITECH) Act, which set “meaningful use” as the intentional implementation of electronic health records (EHR). Doctors and hospitals that treated Medicare patients were subject to fines and penalties through reduced Medicare reimbursements if they were not using EHRs by 2015. The act also provided incentive payments to those who adopted and used EHRs for six years beginning in 2011. To defray the cost of the new EHR technology, the government distributed over $16.5 billion in subsidies from 2009 through 2013 to healthcare professionals who treated Medicaid and Medicare patients (Levingston, 2013); in 2016, the Centers for Medicare and Medicaid Services reported that it had distributed more than $35 billion in incentive subsidies to eligible providers between May 2011 and November 2016. Medicare providers were required to direct 5 percent of their patients to an online portal to establish the transition from paper to digital records. About 50 percent of Medicare professionals had met the requirement by mid-2013. Into the late 2010s and early 2020s, the adoption of EHR exploded and became the norm rather than the exception. By 2021, 86 percent of all general acute care hospitals had adopted EHR, and EHR had been adopted by 78 percent of office-based physicians (Office of the National Coordinator for Health Information Technology, n.d.).

Clinical Decision Support Systems. Clinical decision support systems (CDS) can be defined as a specialized group of technologies that organize data in a way that supports decision-making. In contrast to operational systems that collect, retrieve, and report data elements, a CDS presents information in a way that assists the user with making decisions. Examples include presenting comparative information, listing consequences of alternative decisions, or integrating information links to reference, research, or educational databases. McLeod, Eidus, and Stewart (2012, p. 23) identify four features that are critical to an effective CDS:

Point-of-care reports to summarize a patient’s health history, such as diagnoses, lab results, and medications, and also list any needed preventive or chronic care needs;
Overdue reports to call attention to patients who have not been seen by a doctor recently or are overdue for chronic or preventive care;
A registry that offers a complete view of patients and groups them by unique health traits such as specific diseases or markers;
Directly linked with the healthcare provider’s electronic health record so that when the EHR updates a patient’s chart, the CDS is automatically updated at the same time.

Components of a CDS. Although CDS can be constructed in a variety of ways, most systems have a minimum of three components. The first is the data management module. This module consists of the warehouse of data elements or pieces. As part of the CDS construction, end users determine what data elements are needed, appropriate, and available.

The second component of the CDS is the model management module. This module is the most critical component of the CDS. The model management component is where the different decision scenarios or analytical algorithms take place. This module has been described as the black box of the CDS (Wager, Lee & Glaser, 2005). The different types of models represent different types of decision-making, such as mathematical, statistical, or expert systems.

The third module of a CDS is the dialog module. This module includes the many ways that the user can interact with the CDS. The user can pose the problem, select data, choose the decision model, and specify how the data should be displayed. Displays generally include both text and graphics formats.

CDS systems, particularly when paired with electronic health records, have the ability to reduce medical errors, improve the quality of care, and reduce the risk of liability.

Electronic Health Records In his 2004 State of the Union address, President Bush announced a bold and ambitious goal for every American to have an electronic health record by 2014. In October of 2007, US Health and Human Services Secretary Mike Leavitt announced that a five-year demonstration project would be launched to assist small to medium physician practices with implementing electronic health records. Under the direction of the Centers for Medicare and Medicaid, the demonstration project would be open to 1,200 physician practices beginning in Spring 2008. The project offered financial incentives for implementing electronic health records into a practice. Participating practices would also be eligible for bonus payments if they met clinical quality standards and achieved qualifying scores on a standardized assessment of EHR integration in healthcare delivery ("HHS project promotes," 2007). While Bush’s goal of a complete transfer of medical records to an electronic system may not have occurred by 2014, the overwhelming majority of Americans had electronic medical records in 2021, as 98 percent of office-based physicians in the United States had adopted the system (Office of the National Coordinator for Health Information Technology, n.d.).

The switch to universal electronic medical records was also supported by the Obama administration when in 2009, the Health Information Technology for Economic and Clinical Health (HITECH) Act was incorporated into the president’s stimulus program. EHRs also supported many of the goals of the Affordable Care Act of 2010. Ten years later, EHS had become so ubiquitous in the United States that the Trump administration was suggesting reforms to the system to allow more ease of access by patients to their records (Rucker, et al., 2020).

Patient Medical Records. The patient medical record was one of the areas of physician practice that had been most resistant to technology. The record may contain computer-generated lab reports, database print-outs of patient information, and receipts of computerized physician order entries, but the document itself had never been integrated into a workable tool to aid the physician in clinical care, diagnosis, and decision-making.

The medical record is the compendium of all data related to a patient's health status, diagnoses, treatment history, and treatment outcomes. Wager, Lee, and Glaser (2005) stated that the paper-based medical record that had been the hallmark of medical practice was a passive tool of healthcare and was no longer sufficient for the practice of twenty-first-century medicine. They asserted then that physicians needed an active tool that was immediately available, supported clinical decision-making, and could link to the latest medical information and research findings. This active tool is the electronic health record, which is designed to present all of a patient’s data to the health professional. Software companies like Epic entered a new EHS industry that revolutionized patient medical records so that EHS is now an integral part of the healthcare system in the United States. In the 2020s, patients could go anywhere in the country and feel confident their medical records would follow them and be instantly available (Hudspeth, 2020).

Advantages and Disadvantages of EHR Systems. An important distinction of electronic health records as opposed to the other levels of medical record keeping is that the EHR is patient-centered and fully integrated. The EHR links a suite of information products and linked data systems that allow providers to retrieve patient information, access clinical care guidelines such as evidence-based best practices, provide decision support, and handle the logistics of care such as entering doctor’s orders, making referrals, placing prescriptions, and generating reminders and alerts.

Successful implementation of EHR systems transformed not only operating procedures within the hospital or the physician's practice, but also the dynamics of the doctor-patient relationship. Overall, patients reported satisfaction with the use of EHR by their doctors ("Americans prefer," 2007). Doctors were challenged in two ways when implementing EHRs; they had to learn how to navigate the EHR system and also ways of integrating the use of the EHR into the doctor-patient relationship (Als, 1997). Studies showed that doctors with good communication skills using a paper medical record retained these good skills with the introduction of EHRs. However, communication skills were observed to deteriorate with the introduction of EHR in cases where communication skills were poor, to begin with (Frankel, Altshuler, Kinsman, Robertson, et al., 2005).

The success of EHS became evident right away. A 2013 study by the managed healthcare consortium Kaiser Permanente showed that physicians who switched from paper to electronic records for their diabetic patients saw a 5.5 percent reduction in diabetic patient visits to the emergency room and a 5.3 percent reduction in hospitalizations, which was an overall savings of $158,478 for every 1,000 patients (Levingston, 2013). The Centers for Disease Control and Prevention reported that in 2014, 50.5 percent of US doctors used EHR systems, which was up 48 percent from 2009 figures. By 2021, 98 percent of US doctors used EHR systems (office of the National Coordinator for Health Information Technology, n.d.).

Not all healthcare providers reported positive experiences and results with EHR systems, however, at first many doctors and nurses found the electronic system time-consuming and daunting with the potential for life-threatening mix-ups and errors (Freudenheim, 2012). Medical software companies addressed this problem with extensive training programs. Also, as with any computerized structure, EHRs had the potential to crash, which could immobilize the practice or hospital until the system was back online. Additionally, critics of EHRs claimed that deceptive billing was much easier with the system.

Moreover, with sensitive patient information stored and transmitted electronically there were concerns over information privacy and security and these concerns remain. Health information has gained currency among cybercriminals, and flawed code and backdoors in outsourced or cloud-based information technology services can leave healthcare providers' EHR systems vulnerable to data breaches by hackers (Tanenbaum, 2016).

During the COVID-19 pandemic, EHR became important to prevent the spread of disease. Patients could be monitored through their EHR without risking the spread of COVID-19. Symptoms could be monitored remotely and treatment plans created without patients ever visiting a doctor or hospital.

Conclusion

Throughout the twenty-first century, reforming the healthcare system has been at the front and center of the nation's political debate. Providers, payers, and consumers were pressuring the healthcare industry to reduce costs, reduce errors, and increase the quality of care. Stakeholders in the healthcare industry looked to information technology as well as other computer technologies to solve these problems. Consumers in particular become a more powerful force in healthcare delivery as access to the Internet empowered them with information on health promotion, disease prevention, and alternative approaches to managing their healthcare issues (Shortliffe, 2005). In an ironic turn of events, the implementation of the Health Information Portability and Accountability Act (HIPAA) of 1996 (with its legislative mandate for protecting the privacy of medical records) was a driving force in the implementation of electronic health records. Patient confidentiality became a motivation to further technological development (Shortliffe, 2005). The barriers to fully integrating information technology into healthcare have been erased. The government provided much needed financial assistance to providers who acknowledged the need for information systems but lacked the requisite resources to install them. New developments in the organizational structure of healthcare, such as vertical integration and streamlining processes along with advanced technical capabilities, meant that large volumes of data could be moved across different organizations to create a seamless healthcare delivery system.

Terms & Concepts

Clinical Decision Support Systems: A group of linked data systems that provide the user information to support health-care-related decision-making.

Electronic Health Records: A healthcare information technology application that provides a longitudinal medical history of a patient and includes customized health education information based on a patient's health history.

Healthcare Delivery: The activity of providing or supplying healthcare to individuals or groups of individuals.

Medical Record: A paper-based compendium of a patient's health history.

MEDLINE: The online searchable database of Index Medicus developed by the National Library of Medicine.

Bibliography

Agha, L. (2014). The effects of health information technology on the costs and quality of medical care. Journal of Health Economics, 3419–3430. doi:10.1016/j.jhealeco.2013.12.005. Retrieved December 4, 2015, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=94692721&site=ehost-live&scope=site

Americans prefer electronic health records. (2007). The Information Management Journal, 41(4), 8. Retrieved January 27, 2008, from EBSCO Online Database Academic Search Premier. http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=25853877&site=ehost-live

Bernstein, M. L., McCreless, T. & Cote, M. J. (2007). Five constants of information technology adoption in healthcare. Hospital Topics, 85(1), 17–25. Retrieved January 27, 2008, from EBSCO Online Database Academic Search Premier. http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=24660402&site=ehost-live

Centers for Disease Control and Prevention. (2012, December). Use and characteristics of electronic health record systems among office-based physician practices: United States, 2001–2012. Publications and Information Products: NCHS Data Brief. Retrieved November 21, 2013, from http://www.cdc.gov/nchs/data/databriefs/db111.htm

Colpas, P. (2013). Contemplating meaningful use. Health Management Technology, 34(8), 8–11. Retrieved November 21, 2013, from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=89584196

DePhillips H. A., III. (2007). Initiatives and barriers to adopting health information. Disease Management and Health Outcomes, 15(1), 1–6. Retrieved January 28, 2008, from EBSCO Online Database Academic Search Premier. http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=25139618&site=ehost-live

Frankel, R., Altschuler, A., George, S., Kinsman, J., Jimison, H., Robertson, N. R., et al. (2005). Effects of exam-room computing on clinician-patient communication: A longitudinal qualitative study. Journal of General Internal Medicine, 20(8), 677–682. Retrieved January 25, 2008, from EBSCO Online Database Academic Search Premier. http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=17638316&site=ehost-live

Freudenheim, M. (2012, October 9). The ups and downs of electronic medical records. New York Times, p. D4.

HHS Project Promotes Use of EHRs. (2007). Managed Care Outlook, 20(24), 1. Retrieved January 27, 2008, from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=27677653&site=ehost-live

Hudspeth, M. (2020, Feb 23). Epic, the software company that's changed the sharing of medical records (including, probably, yours). CBS News. Retrieved June 16, 2023, from https://www.cbsnews.com/news/epic-the-software-company-thats-changed-the-sharing-of-medical-records-including-probably-yours

Kuziemsky, C., & Jahnke, J. (2005) Information systems and health care V—A multi-model approach to health care decision support systems. Communications of the Association for Information Systems, 2005(16), 407–420. Received January 25, 2008, from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=19323575&site=ehost-live

Levingston, S. A. (2013, November 14). Electronic health records’ “make-or-break year.” Bloomberg Businessweek. November 21, 2013, http://www.businessweek.com/articles/2013-11-14/2014-outlook-electronic-health-records-make-or-break-year

May, E. (2012). Pulling it all together: What makes health IT more meaningful?. Healthcare Executive, 27(5), 10–20. Retrieved November 21, 2013, from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=79369603

McLeod, W., Eidus, R., & Steward, E. (2012, March/April). Clinical decision support: Using technology to identify patients’ unmet needs. Family Practice Management. Retrieved November 21, 2013, from http://www.aafp.org/fpm/2012/0300/p22.html

Middleton, B. (2005). Achieving U.S. health information technology adoption: The need for a third hand. Health Affairs, 24(5), 1269-1272. Retrieved January 27, 2008, from EBSCO Online Database Academic Search Premier. http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=18283608&site=ehost-live

Putre, L. (2012). Health care IT: Staying on top of the game. H&HN: Hospitals & Health Networks, 86(1), 47–57. Retrieved November 21, 2013, from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=70732705

Quickstats. (n.d.). Office of the National Coordinator for Health Information Technology. Retrieved June 16, 2023, from https://www.healthit.gov/data/quickstats

Rucker, D., Verna, S., & Kushner, J. (2020, March 9). Trump administration ensures health records access for every American. USA Today. Retrieved June 16, 2023, from https://www.usatoday.com/story/opinion/2020/03/09/trump-administration-ensures-health-records-access-every-american-column/4977620002

Shortliffe, E. H. (2005). Strategic action in health information technology: Why the obvious has taken so long. Health Affairs, 24(5), 1222–1233 Retrieved January 28, 2008, from EBSCO Online Database Academic Search Premier. http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=18283370&site=ehost-live

Tan, J. K. H., & Modrow, R. E. (1999). Strategic relevance and accountability perspectives for health care information design. Topics in Information Management, 19(4), 84–107. Retrieved January 26, 2008, from EBSCO Online Database Academic Search Premier. http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=6897302&site=ehost-live

Tanenbaum, W. A. (2016). IT systems put security into health care cybersecurity. Journal of Health Care Compliance, 18(4), 21–26. Retrieved December 28, 2016, from EBSCO online database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=116756774&site=ehost-live&scope=site

Wagner, K., Lee, F., & Glaser, J. (Eds.) (2005). Managing Health Care Information Systems: A Practical Approach for Health Care Executives. San Francisco, CA: Jossey-Bass.

The Development of Healthcare and Information Technology

On this Page

Subject Terms

The Development of Healthcare and Information Technology

Abstract

Overview

Conclusion

Terms & Concepts

Bibliography

Suggested Reading