Health information technology is a branch of information technologies that deals with the shortage of medical information and data, their exchange and usage in order to provide healthcare organizations with communication and help them arrive at a decision. Today health information technologies become more and more popular, as they improve the quality of healthcare. In connection with this, the number of hospitals that use these technologies increased recently.
Healthcare organizations tend to apply information technologies to reduce the time needed for standards of care and evidence-based protocols. They also hope that this will bring down the price. Unfortunately, now the profit of health information technology is under the question, as yet it is not clearly seen whether the finances invested in their development can be fully returned (Zelman, McCue, Millikan, & Glick, 2003).
Information technology is considered to be one of the most expensive elements in any company. It needs great funding but does not provide the organization with products. Thus, it can be called a cost center, which means that no direct profit is produced and extra spending is added (Gray, 2010). This suggests that information technologies should be managed as an expense to be controlled. It is essential for the company to clearly understand what services it needs. Then more attention will be paid to the details, the system will be eliminated or upgraded at the proper time and without superfluities. By spending less, the organization will gain an appropriate service.
According to the data provided by Intermountain Health Care, approximately 3.5 percent of the operating costs and 18 percent of capital spending are taken by information technologies. As a rule, organizations apply some systems of control and measure this department to reduce its expenditures and increase benefits (CFO Research Services, 2004).
Intermountain Health Care’s Probst claims that information technology is very helpful. It allowed them to discuss different problems and find the best way of solution together. Taking this into consideration, health information technology can be managed as a mechanism for revenue growth. Of course, these technologies help to provide customers with certain services, and companies get more income relying on them. Some savings can also be found, as information technologies are able to gather people from different locations and substitute real-life communication. The information can be collected on the storage mediums, which seems to be cheaper and more convenient than a great number of paper ones. The majority of service operations that are provided by hospitals are not technical ones, but they depend upon technology. With the help of them, the organizations can quickly respond to their customers and calculate the cost of providing services.
However, the fact that a lot of money is spent on the development and improvement of information technologies is also weighty. Rapid progress in this sphere makes people change the equipment they have for a newer and better one. The organization admits that the best way to treat information technologies as a positive element and not just a cost center is to be fair and realize how much they spend and what they gain for that (CFO Research Services, 2004).
Thus, it is hard to say whether the information technologies can be paid off, as they do not provide the company with the concrete product that can be evaluated. That is why I believe that health information technology should be managed as a cost center.
References
CFO Research Services. (2004). IT moves from a cost center to a business contributor. Web.
Gray, P. (2010). Re: Is IT a profit center or a cost center? [Blog post]. Web.
Zelman, W., McCue, M., Millikan, A., & Glick, N. (2003). Financial management of health care organizations: An introduction to fundamental tools, concepts, and applications. Carlton, Australia: Blackwell Publishing.