The long road from potential to realized gains of information technology in healthcare--experiences from Norway.

• Author: Bergmo, Trine Strand
• Position: Report

Abstract

This paper deals with the contribution of information and communication technologies (herafter IT) in health to improve quality and efficiency in health care delivery. It also explores the technologies' potential contribution to innovation and economic development in Norway. The aim of this paper is to provide an overview of telemedicine and health IT in Norway. Using evidence from published studies this paper explores if the technologies have met the expectations and fulfilled the potential for improvement in health with focus on quality, efficiency and productivity improvement, highlighted with examples from Norway. In addition, this paper examines health IT 's role in rural development, innovation and economic activity in general. This paper argues that telemedicine and IT in health has been slow to diffuse and that documented gains from IT investments are still hard to find. This paper also shows that even if IT in health has been slow to diffuse, the existing IT-use has spurred some economic activity in both private and not-for-profit companies in addition to public service provision. A full-scale implementation of health IT and telemedicine may have a significant potential for innovation and economic development in Norway.

Introduction

In the 1980s and early 1990s the rapid diffusion of information technologies in different sectors of society seemed to have little impact on actual productivity growth. This is best described by Robert Solow 's famous paradox "you see computers everywhere except in the productivity statistics" [1]. This changed in the beginning of the 21st century. Positive impact of IT-capital on labour productivity became evident. An OECD report [2] showed that IT was having substantial impact on economic performance and the success of individual firms. It also became evident that the impact of IT on growth depended on several complementary assets such as skills, innovations, organisational factors and competition [3].

It is a strong political confidence in Norway that information and communication technologies (i) in health have the potential to revolutionize healthcare delivery. Policy documents reveal high expectations;" healthcare is a sector where the savings of IT-use may be in the range of several billion Norwegian Kroner" (1 billion NOK is 150 million US Dollars) [5]. This positive view seems to be shared with the rest of Europe. The following statement from the European Commission's first high-level conference on eHealth (ii) in May 2003 illustrates the political importance of e-Health; "eHealth is the single-most important revolution in healthcare since the advent of modern medicines, vaccines, or even public health measures like sanitation and clean water" [6]. This optimism is not confined to the health sector only. The latest eEurope action plan aims to provide a favourable environment for private investment and for creation of new jobs, to boost productivity, to modernize public services and to give everybody the opportunity to participate in the global information society. This through secure services (eGovernment, eLearning, eHealth and eBusiness) and a widely available broadband infrastructure [7].

The term "information technologies in health" usually refers to the use of modern information and communication technologies to meet the whole range of healthcare needs of citizens, patients, healthcare professionals, healthcare providers as well as policy makers. Telemedicine is a component of the broader term IT in health and can be understood as health related activities and services carried out over a distance by means of IT. In this paper we will mostly give examples from telemedicine services and systems, but IT-use in health in general will also be discussed.

IT in health has potential for both cost reduction and increased productivity especially in areas like administration, purchasing and supply chain, but also in care coordination. (iii) The latter can be improved trough electronic patient records, appropriate access systems and electronic information exchange between different actors and levels in the healthcare system. Moreover, modern communication facilities may also improve access and reduce the cost of proving healthcare to remote areas and local communities through real-time consultations and store-and-forward telemedicine using for instance digital images and sound files.

These are direct and potentially measurable savings of IT as a capital input in healthcare. Productivity and efficiency improvement can also generate indirect benefits to the rest of the economy. A healthier workforce, less time off work due to illness and lower public health expenditures can improve productivity and growth economy-wide. It has been argued that providing high standard healthcare via IT and telemedicine can sustain and strengthen rural communities and may counter rural-urban migration [8]. It has also been argued that the use of IT in health may have potential to make rural communities more appealing for health personnel to work and live in and spur economic development trough local IT business initiatives [9].

The aim of this paper is to provide an overview of IT-use and telemedicine services in Norway. Using evidence from published studies this paper explore to what extent the technologies have met expectations and fulfilled the potential for improvement in healthcare delivery performance. This paper focuses on the potential impact of health IT on quality, efficiency and productivity, highlighted with examples from Norway. In addition, health IT's role in innovations and economic development is explored.

Norway--an Overview

Norway is one of the world's northernmost countries, making up the western and northern part of Scandinavia. The country has a population of approximately 4.5 million [10] with the majority living in the southern on-third of the country and in communities scattered along the coast. The northern region is sparsely populated with long distances between the communities. Norway is endowed with natural resources--petroleum, hydropower, fish, forests, and minerals. In 2004 GDP was 250 Billion USD. In 2005 the overall GDP grew at 2.4% and the unemployment rate was 4.6% [11]. It is a strong political commitment to maintain viable local communities and facilitate a sustainable demographic pattern in all parts of the country with special emphasis on fishing and farming communities. This is reflected in all parts of politics from education and health to industry. One of the political strategies to secure sustainable economic prosperity for rural and remote areas is to promote high-speed Internet access throughout the country with the government funding rural broadband development in areas where it is not commercially feasible [12].

The government is funding and administering most public services including transport infrastructure, education and healthcare. The public sector accounts for almost one fourth of mainland investment and a third of the total labour force [13]. The costs of providing public services have increased considerably over the last decade [14], and one of the main challenges for the public sector is to increase efficiency to be able to meet future demand from an increasing elderly population with a decreasing workforce.

The Norwegian Health Care System

Norway has developed a national health system funded by general taxation to cover the health care needs of the population. The Norwegian healthcare system is based on the principles of universal access to healthcare and decentralization of production and delivery of services to local governments. The system operates at three levels. At a national level the Ministry of Health and Care Services is responsible for legislation, policy development, budgeting and planning and information management. Five regional health authorities are responsible for planning and provision of secondary care services like in-patient care and specialist services. The municipalities are responsible for the provision of primary care including disease prevention, health promotion and social care. The health care expenditure as a percentage of the GDP was 9.6 in 2002 [15].

All residents of Norway are insured under a compulsory national insurance scheme. All insured persons are granted free hospital in-patient treatment including all medicines. Most travel cost associated with acquiring health services are also covered by the government. The patients themselves only pay a small user-fee for outpatient consultation at the hospital in addition to copayments for laboratory tests, X-rays, some pharmaceuticals and travels. The patients also pay a limited share of the costs of treatment at primary physicians, psychologists, physiotherapist, chiropractors and some prescriptions. The patients' first contact with the health care system is usually with a primary care physician. If the primary physician needs assistance he/she sends a referral to a specialist at a secondary care hospital. The patients are free to choose both primary and secondary care providers.

IT-Strategies and Status

There is a strong political commitment in Norway to support activities to develop and implement IT in all sectors of society [16]. Like most of the European countries Norway consider information technologies so central to national economic growth that the Government has initiated national "e-strategies" within almost all major areas in public management [17]. In the most recent strategy "eNorway 2009", the authorities still emphasize the need for an active political involvement in development of a modern information society [14].

Several reports and action plans for IT in healthcare have also been initiated during the last two decades. The first national action plan for health IT and telemedicine was published in 1996 ("M ore health for every bIT ") [5]. This plan focused on IT and telemedicine as a tool to modernize healthcare...