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Hospitals Report Room for Growth and Improvement

What are the nation's hospitals thinking when it comes to things such as HIPAA (Health Insurance Portability and Accountability Act) compliance, ASPs, outsourcing and vendor relationships?

Gordon & Glickson asked hospitals with 250 or more beds about those issues in its Healthcare Technology Survey. The prognosis is that there is both room for growth for outsourcing of IT services and a need to improve levels of satisfaction with IT and service provider vendors. HIPAA compliance remains a mixed bag.

The survey suggests that while hospitals have made significant strides in HIPAA compliance, there is work to be done to avoid penalties under upcoming HIPAA compliance dates. (HIPAA mandates the standardization of electronic medical transactions in the U.S. by October 2002.) That translates into potential opportunities for ASPs and outsourcers able to ease the HIPAA burden.

Respondents reported that while they were well on their way to compliance with transaction and code set standards and privacy standards aspects of HIPAA, few had begun significant work on compliance with the proposed security and identifier standards. More than half of respondents were still in the development and planning stages of compliance with the "business associate" rules under the final HIPAA Privacy Rule.

Given the sweeping changes mandated by HIPAA, it was surprising to note that more than 35 percent of respondents did not see HIPAA as the most serious technology-related issue facing their organization in the coming year.

"While the security rules have not been finalized, compliance dates for the Final Privacy Rule are fast approaching," said Diana McKenzie, partner and chair of the healthcare technology practice at Gordon & Glickson. "Hospitals should continue to press ahead with all HIPAA compliance efforts to avoid the costs and penalties of rushing projects and missing the deadlines."

The survey also reports that hospitals have turned to outsourcing and ASPs options, but mostly for niche health information systems such as laboratory, transplant surgery, recruiting and performance management. But there is reason to believe that as hospitals become more technology savvy, ASPs and other service providers can expand into providing outsourced services for more traditional IT services such as help desk and system maintenance. "Hospitals have entered the information technology sector in material ways and have become sophisticated technology users," McKenzie said.

Over half of the survey respondents were at least fairly satisfied with vendor performance in outsourcing and ASP services. However, only 15 percent of respondents said they were "extremely satisfied." Deal-breakers for ASPs included HIPAA compliance, service level guarantees and minimum response times.

Gordon & Glickson, is a Chicago-based law firm that specializes in providing legal services to the technology markets. The Healthcare Technology Survey is one of a series of healthcare technology surveys the firm conducts.


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