New Health Care Technology AND Financial Implications Research Paper Example

Abstract

The paper aims to examine the relationship between the utilization of a new health care technology and the financial implications. Both advantages and disadvantages of implementing such new technology are analysed. Besides, the paper investigates the essence of budgeting process together with its impact on technology capital expenditure. The unified system of health information in the first place requires the alignment of actions and decisions at the administrative and operational levels. In order to establish effective monitoring in terms of financial aspect, robust organizational and legal models are required. It is worth noting that they should be focused on optimizing modern automated information systems in medical-diagnostic process. Furthermore, the influence of health information technologies on hospital operating expenses is explored. Implementation and use of new health care technology and health information management requires comprehensive support to meet the challenges of health facilities in the modern conditions.

Introduction

Health care is considered as a key element of social, cultural and economic development of a country. There is a growing recognition of the role of public health as a strategic factor of stability and welfare of society. Health care system has experienced a range of challenging factors, such as the aging population, the rise in the incidence of chronic diseases and disabilities along with the emergence of new treatments and costly medical technologies. The focus of the development of health care should be put on the preservation and improvement of human health through improved planning, expansion and strengthening of the technical base of health care as well as the organization of the budgeting process. The paper endeavours to explore not merely the impact budgeting has on technology capital expenditure, but also the financial implications that the use of a new health care technology may have on administrative and operational costs.
The rising cost of health care has led to the seriousness of the policy-making in the health sector and identified the need to reconsider the implementation of new technology. Monitoring is a great tool for evaluating the effectiveness of measures both in terms of introducing information technologies and evaluation of financial outcomes within the health care system. In order to monitor cost-effectiveness and facilitate service planning, it is of paramount importance to integrate clinical and financial information. The inefficient use of resources is the major issue that has a strong impact on budgeting, which in turn contributes to other problems in the area of ​​health policy, as well as triggers the search for alternative effective strategies and adequate funding. Improving the health financing system is a key element of improving health care.

Financial implications of new technology within health care

Use of electronic health records (EHRs) is deemed efficient in terms of reducing practice costs, increasing revenue as well as ensuring positive health outcomes for patients. The adoption of health information technology, including the nationwide exchange of health information, is a substantial step forward aimed at reducing costs and boosting patient, staff, and provider satisfaction. Use of electronic patient data is bound to improve health outcomes, as it offers a prompt access to comprehensive and accurate patient records. According to Sittig and Singh (2011), electronic health records might increase clinicians' legal responsibility and accountability. At the same time, it is worth noting that the safety, efficiency and quality of healthcare are inextricably linked with the financial incentives. Besides, budgeting is required even for monitoring costs.
Even though the implementation of EHRs embraces potentially high financial investments, it is important to realize that the database of information is of immense assistance with regard to the effective coordination of patient care. This, in turn, is likely to result in the prevention of medical errors as well as the expanded access to affordable care. Furthermore, it should be noted that governance must be diversified, as a variety of stakeholder representatives, both physicians and the community, does have an impact on effective health care financing. Thus, a set of indicators should be used to measure the effectiveness of new technology.
New technology is likely to reveal the scientific potential of medical staff and allow equal access to quality health care. Effective healthcare management is closely related to the rational use of allocated resources. The main structural unit, ensuring the implementation of new technology are medical organizations, as they ensure the provision of efficient and high quality preventive and curative care. The analysis and evaluation of the main health indicators define the potential areas of possible management decisions for the protection of public health. The decision making process with regard to implementation new technology should be transparent. Innovative technology should facilitate implementation of functional and corporate governance as well as the strategies adopted within health care facilities.
Modern health care system has encountered various problems, causing the exponential growth in expenses compared to the limited financial resources. New drugs require a huge cost for treatment, as well as the implementation of new technology implies the associated increase in costs, that presupposes the health care system to rationalize the use of resources. Besides, the use of advanced methods of health economic analysis requires financial incentives as well in order to evaluate and implement the best use of scarce resources.
It could be argued that the problem is seen in cost containment. Therefore, efforts aimed at ensuring equity in access to health care and improving public health are often constrained by the desire to limit the actual costs of the industry. Given the high costs of new health care technology, federal support are deemed necessary. The mechanism of limiting the growth of the actual cost should be implemented on the institutional levels, as it should be the basis for the rational use of health care resources (Cleverley et al., 2011). Governance of health should focus on the actual outcome, namely health. Thus, it is crucial not only to reflect the basic needs of the population for health care in the formation of health facilities for the provision of health services, but also it is imperative to take into account indicators of their activity.
World experience demonstrates that the health system works most effectively with a diversity of ownership and organizational and legal structures of medical and industrial organizations. It is crucial to reach a sustainable ratio of public and private as well as profit and non-profit health care institutions. This ratio should match the level of socio-economic development of a country and provide reliable social protection along with quality provision of health services through the use of modern technology. Thus, there is the need not merely to increase the allocation of funds, but also to monitor the financial mechanism of the effective use of new technology, ensuring the quality of health care.
Usage of health care information systems has a positive impact on patient scheduling applications and efficient practices for treatment based on their personal health records. For-profits hospitals tend to display lower operational expenses rather than not-for-profits ones (Cleverley et al., 2011). Lower hospital operating expenses are argued to be associated with effective financial management.
It is imperative to differentiate between financial and nonfinancial costs within the process of launching new technology. Financial costs encompass purchases of hardware and software licenses, as well as maintenance and technical support. Moreover, mechanisms that ensure pooling of funds across services are costly. Nonfinancial costs should be also taken into account, as they embrace the time that is spent in order to bring technology into full use. Thus, concerted efforts should be made in order to ensure an equitable distribution of funds. Evaluation of profitability in health care is a question of value for money. Financial evaluation of health care interventions is possible on the basis of a comparative analysis of alternative treatment courses of action in terms of costs and their consequences (Cleverley et al., 2011).
The most commonly used methods for economic evaluation in health care are cost-effectiveness and utility cost analysis. Assessment methods differ in the way in which results are expressed, but essentially they serve the same purpose, namely evaluation of the maximum health outcomes within a limited budget. The results of treatment in the analysis of cost effectiveness of the relevant costs are normally expressed quantitatively. Increasing the level of profitability is the ratio of the alleged differences between the cost of the alleged options for medical intervention and the alleged differences between the results of these options (Cleverley et al., 2011). Within the theoretical framework, this aspect defines the estimated additional cost of an additional unit of health, which is created by the intervention of the medical treatment options as compared to the most cost-effective alternative to such interventions.
Evaluation and implementation of new technology are likely to have a considerable impact on administrative and operational costs as well as on the organizational management in health care. Financial planning and adequate financing of technological integration are focused on improving the quality of medical assistance. Financial planning embraces the estimation of potential risks within the health sector in terms of financial resources, including redistribution and cash income (Cleverley et al., 2011). The essence of financial planning in the health care evaluates the scope of possible sources of funding as well as the approximate health care costs, including the schedule of necessary financial resources and timely payments.
When it comes to ethical dilemmas, Sittig and Singh (2011) mention ownership of protected health information as well as the potential privacy breaches. There have been also concerns with regard to the increased risk of unauthorized disclosures of patients’ private records. Computer-based personal health data breaches tend to lead to substantial financial consequences for both parties. The aforementioned concerns raise complex legal and ethical issues and, thus, they require effective ways in terms of regulation and safe use of personal health information. Sittig and Singh (2011) are adamant that the implementation of electronic health records as well as health information exchange will necessitate rationalization of payment mechanisms within the realm of health care delivery.
With regard to financial dilemmas, Sittig and Singh (2011) outline three major issues. The majority of monetary benefits from the use of electronic health records goes not to those who finance the implementation process, but to health care payers. Thus, it is questionable who should be responsible for the cost of the resources required for implementing new technology in health care industry.
Patient-centered medical care requires long-term strong financial support. In this regard, it is not clear who will pay for storing and maintaining the electronic records in the long term. What is more, it could be argued that reducing costs in health care is overdue. However, mounting concerns have been expressed regarding the downstream impact of decreasing health care expenditures through health information exchange and electronic records (Sittig & Singh, 2011). Furthermore, there is a lack of conclusive evidence to demonstrate how the cost shifting might occur.

Conclusion

Implementation of new technology represents a significant transformation in the realm of health care. The process of restructuring of the health care system in an innovative way will lead to greater resource efficiency, quality and accessibility of medical care. The paper has discussed the advantages and disadvantages of technology management, taking into consideration the financial aspect.
In terms of the implementation of new technology, there is an urgent need for ensuring quality outpatient care as well as the intensification of the use of electronic health records. Moreover, further implementation of resource-saving technology is required. Patients, clinicians, policymakers, lawyers, economists, philosophers as well as tech savvy experts should discuss the issues regarding the implementation of new technology within the health care. Such discussions are likely to facilitate the process of prioritizing solutions to the financial, ethical and other related issues.
The paper has also discussed the effectiveness of the introduction of technological innovations. Thus, the computerization of medical practice is a challenging, and yet rewarding process. The organizational innovation should be a key element with regard to the technological basis for the integrated management system of medical institutions. With the apparent prospect of economic efficiency, organizational forms of technological innovation will be effectively introduced in public health practice, thereby justifying the costs. Therefore, comprehensive analysis of the efficiency of health technology as well as the understanding of viable issues make it possible to develop proposals to speed up the cost-effective restructuring of the health care.

References

Cleverley, W. O., Song, P. H., & Cleverley, J. O. (2011). Essentials of health care finance (7th ed.). Sudbury, MA: Jones and Bartlett Learning.
Sittig, D. S., & Singh, H. (2011). Legal, ethical, and financial dilemmas in electronic health record adoption and use. Pediatrics, 127(4): e1042–e1047. doi: 10.1542/peds.2010-2184