FORTUNE Tech Transformations

Tech Rx for health care

One hospital hopes to save money (and lives) by going digital.

By Julia Ioffe

Caritas CEO Ralph De La Torre is spending $70 million to digitize health records.

(Fortune Magazine) -- Tucked deep in the stimulus bill passed in February is a $19 billion bundle of grants and incentives designed to wake up America's technologically sleepy health-care industry. The hope is that hospitals will swap paper records for digital files, enabling doctors and nurses to update records easily, share health information with others in the industry, and even diagnose diseases remotely - while saving the system billions.

It all sounds great: Imagine your doctor using a smartphone to call up your records or checking on your recovery via Twitter. The economy would benefit too, as big companies like IBM (IBM, Fortune 500) and HP (HPQ, Fortune 500) deploy employees to help hospitals go high tech.

It won't be an easy upgrade, though. The system is made up of tens of thousands of doctors' practices, hospital chains, and insurers, all of which operate on different software platforms that don't talk to one another - if computers are used at all. Older physicians are often cool to the idea of ditching their charts and prescription pads; getting them onboard will take time and training.

Despite the challenges, some hospitals are starting to go paperless. Caritas Christi Health Care, a nonprofit Catholic medical organization overseen by the Boston archdiocese, last year launched a $70 million, four-year tech face-lift.

What started out as a cost-cutting measure - the struggling six-hospital chain has amassed more than $270 million in debt - has turned into a grand experiment in modernizing health care. Caritas CEO Ralph de la Torre aims to completely digitize the hospital, using a centralized computer system to store patient records, and track and manage admissions. "It's going to be one collective brain that encompasses all a patient's needs," says de la Torre, a surgeon who was hired last year to run Caritas.

De la Torre in turn hired Todd Rothenhaus, a computer scientist and practicing ER physician, and John Morey, who helped create Microsoft Outlook. Using developers and off-the-shelf medical software from specialty firms such as eClinicalWorks, Rothenhaus and Morey have helped create a system called PatientKeeper that allows hospital employees and doctors to access records from any of the hospital's facilities via computers or smartphones. (Twenty doctors in a pilot group are already using PatientKeeper. Early feedback is positive, Morey says.) Each patient, identified by a number to protect his privacy, will be traceable across all specialists, procedures, tests, and medications.

This unified system will help the hospital manage a patient's stay, and it should prove to be a statistical gold mine: Caritas can analyze the records for trends that can help administrators figure out what kinds of drugs and vaccines to have on hand (say, in a flu outbreak), pinpoint safety issues (why is there a spike in falls in this unit?), and even make staffing decisions, based on patient traffic.

Medical economist Jeffrey C. Bauer of ACS Healthcare Solutions says too few hospitals are embracing tech the way Caritas is. He estimates that on average most hospitals spend only 2% of their budgets on information technology but probably need to spend "double to triple" that amount to make their operations more efficient.

If de la Torre succeeds in computerizing Caritas, he'll probably improve profits and patient care alike: When a patient calls for an appointment, for example, the admissions staff could use the online system to find a physician with an immediate opening who accepts the patient's insurance. Getting patients help right away makes their conditions easier - and less expensive - to treat.  To top of page

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