regulatory structures are being applied to IT issues, creating confusion and probably ineffective oversight. For example, online pharmacies, whereby the physician enters orders into pharmacy computers often using a handheld wireless electronic prescription pad, have given rise to a set of jurisdictional issues. These issues relate both to federal and state responsibilities and, at the federal level, to questions about the responsibilities of different agencies (i.e., Federal Trade Commission, Food and Drug Administration, Drug Enforcement Administration, Department of Justice, U.S. Customs Service, and U.S. Postal Service) for consumer protection, rooting out of fraud and misinformation, drug quality, advertising of prescription drugs, and importation and domestic mailing of pharmaceutical products (National Health Policy Forum, 2000).
The 21st-century health care system will require a significant financial investment in information technology—far greater than current investments by most health care organizations. Capital will be needed to purchase and install new technology, while installation of the new systems is likely to produce temporary disruptions in the delivery of patient care and result in sizable short-term costs to manage the transition. Some specialized training and education will also be needed to help the workforce adapt to the new environment.
In addition, some health care organizations have invested heavily in legacy systems—older computer systems built around mainframes (Turban et al., 1996). There is no easy way to shift from such systems to state-of-the-art information systems based on an open client-server architecture, personal computer networks, and more flexible, nonproprietary protocols. These are important considerations for all health care organizations when making decisions about investing in IT. Recent reductions in Medicare payments under the 1997 Balanced Budget Act have likely contributed to an even more cautious approach to long-term investment in technology on the part of many health care institutions.
Access to capital may be particularly limited for certain types of health care organizations. Not-for-profit hospitals and health plans must obtain capital from bond rather than equity markets. Many small physician group practices have a limited ability to obtain capital. Large for-profit health plans may have ready capital to invest in IT, but absent strong, long-term partnerships with provider groups, lack the leverage and incentive to implement such systems.
These capital decisions are also being made in an environment in which benefits are difficult to quantify. Unlike billing or pharmaceutical transactions, clinical transactions have only an indirect effect on profitability, and demonstrating the value of clinical information systems in improving the quality of care has been difficult although, as discussed above, evidence has begun to accumulate about their usefulness in specific settings and applications. Moreover, as dis-