HealthSouth Corp. Chief Executive Jay Grinney has concluded his testimony in the Richard Scrushy civil trial, ending with a devastating critique of the so-called 'digital hospital.'
'It was a very bad business decision that made no sense,' Grinney said of the half-completed Scrushy brainchild on U.S. 280 he inherited when he took over in 2004.
Ending his sixth hour of testimony over two days, Grinney said the hospital had an original budget of $200 million, and that much had already been spent when the the project was stopped halfway through. Another $200 million was required, he said.
When it came time to cut the $3.5 billion of debt that was burdening the company, Grinney said he had no hesitation about selling the building. Scrushy had envisioned the medical center as a 200-bed centerpiece of the HealthSouth empire, and called it the 'digital hospital' because of its planned technology component.
The building has been sold to real-estate developers,....
Scrushy is on trial in Jefferson County Circuit Court after being sued by HealthSouth shareholders. They are seeking $2.6 billion in damages from him for costs related to accounting fraud, corporate waste and insider stock trading while he ran the physical therapy company from 1996 through 2002
The 56-year-old Selma native is in the Shelby County Jail awaiting his court appearance in the case. He was brought to Birmingham from federal prison in Texas, where he is two years into a seven-year sentence for bribing former Alabama Gov. Don Siegelman.
In additional coverage by a local television station (NBC13.com),
When asked about the unfinished digital hospital on Highway 280, Grinney said, 'It was a pipe dream and a figment of the imagination. It never had a chance.'
Grinney testifed on Wednesday that HealthSouth would have had to forego investments in all of the company’s other 93 hospital for 2 to 3 years to finish the digital hospital.
What a contrast this was to the hype that surrounded the announcement of Scrushy's intention to build the "digital hospital." Let me provide some samples.
ComputerWorld allowed Scrushy to wax eloquent:
Hospital chain HealthSouth Corp. and software manufacturer Oracle Corp. are teaming to build what they say is the world's first all-digital, automated hospital.
The technological features will include patient beds with display screens connected to the Internet; electronic medical records storage; digital imaging instead of traditional X-ray film; and a wireless communications network that will allow doctors, nurses and other health care professionals to securely update and access patients' medical records using handheld devices.
'This will be the hospital model for the world,' HealthSouth Chairman and CEO Richard Scrushy said in the statement. 'By creating the first automated hospital ... we will demonstrate how technology can lower health care costs, greatly reduce human errors and provide patients with the best medical care available.'
The project will be fast tracked and hopefully completed by 2003. From the moment a patient registers at the hospital, every blood test and MRI will be recorded in a central patient record, and pharmacy visits will be tracked. All charting will be done at the patient's bedside, 'getting the nurses' back to the patient's side' and making doctors more efficient. Oracle will provide the technology that will allow Health South to improve record-keeping and patient care, officials of the two companies said in a briefing on Monday. Ultimately, they said, the improvements will reduce the overall cost of care. It was also added at the briefing that another 10 sites where the hospital can be duplicated have been identified. Its now the era of cyber hospitals!!!
Managed Care Magazine was only somewhat more measured:
The promise of HealthSouth's digital hospital is great. By planning for integration on a common platform with all suppliers involved from the start, HealthSouth is maximizing the likelihood of success.
Also, HealthSouth is attempting to make the physical facility as flexible as possible to allow for the adoption of additional new technologies as they become available.
If this hospital works, it is likely to set standards for a high level of patient care. HealthSouth is anticipating that the increased efficiency of the new facility will translate into a decrease in overall length of stay.
On the other hand, everything is still in the planning stages, and details are scarce. HealthSouth has no agreements in place with insurers. Of course, the paperless hospital evokes memories of the heralded paperless office of a generation ago — and we're still waiting.
The cutting edge can be painful. But the concept of the digital hospital, automating care and administrative operations, is so appealing, we can only hope it will succeed. Time will tell.
An article in the MIT Technology Review was just a little bit skeptical:
While others have previously failed to carry off such grand visions of high-tech medicine, the deep pockets of HealthSouth and Oracle could give them a fighting chance.
But the article's conclusion was less cautious:
Not only could electronic information management help eliminate errors, it could also eliminate two to three hours a day that nurses spend charting patient data, and dramatically improve communication between different departments. The bottom line: it could save lives.
Finally, I was able to find some discussion of the proposed "digital hospital" in a scholarly publication, in fact, in probably the most authoritative and well-read journal on health care policy in the US, Health Affairs. [Burns LR, Pauly MV. Integrated delivery networks: a detour on the road to integrated health care? Health Affairs 2002; 21: 128-143.] I would not call it gushy, but it hardly seemed skeptical:
The most radical development is the incorporation of all of these technological advances into newly designed and built 'digital hospitals.'HealthSouth, traditionally a provider of integrated rehabilitation services, has announced plans to build several digital acute care hospitals over the next decade (the first is now under way in Birmingham, Alabama). The publicity surrounding the new hospital and its partnership with Oracle not only has attracted other prominent product vendors but also has enabled HealthSouth to negotiate large discounts on all equipment supplied—in effect, lowering the cost of construction.
What are the likely prospects for this intervention, either at these beta-test
sites or diffused more generally? It is plausible (although difficult to demonstrate so far) that routine patient medical and billing records can be stored or exchanged electronically. It is less obvious that this technology should lead to changes in the cost of care or help to integrate different providers of service. Indeed, the biggest chasm to bridge may be the office systems of different physicians. Kaiser Permanente is reportedly struggling to develop a clinical information system that covers its thousands of physicians and other clinicians. The (as yet undocumented) benefits will likely depend on the ability to harness technological interventions with managerial innovations and interorganizational networks, in effect creating 'socio-technical systems of care.'
So we have gone from "the hospital model for the world," with great "promise," which "could save lives," proclaiming the "era of cyber hospitals," to a "pipe dream," just the shell of half-finished building.
So I wonder, if one were to identify every highly hyped, rapidly spun, magic new "innovation" promising to revolutionize patient care, and follow them forward in time, how many would even marginally improve health care, or provide benefits that marginally out-weighed their harms? How many would never come to be, or prove to be unworkable, useless, or even harmful?
But the short-term incentives for leaders of health care organizations push them to announce innovation after innovation, collect their bonuses and perks, and be somewhere else by the time their wondrous innovations prove to be not so good.
Keep in mind that some heavily promoted innovations, such as new pharmaceuticals, must be subject to randomized controlled trials and government approval. Yet, as perusing Health Care Renewal will show, many pharmaceutical companies have managed to make their glitzy innovations appear more efficacious and less hazardous by lavish, shrewd, and sometimes deceptive marketing, and by manipulating clinical research, and sometimes suppressing results. Medical devices are not subject to as much scrutiny. Health care information technology, and programmatic innovations by hospitals, health systems, managed care and health insurance companies can appear without any research evidence to support them.
This is why we all should be extremely skeptical of whatever new "innovations" our multi-million dollar health care CEOs and their cronies are hawking these days.