Financial Viability, Medical Technology, and Hospital Closures

Informed investments in medical technology and information systems are associated with financial viability of community hospitals. Financially distressed facilities are 3 to 4 years behind proactive hospitals in supporting high-speed, voice, and image transmissions to physicians in various locations. Impact of the Balance Budget Act of 1997, fraud and abuse activities, Y2K issues, and lack of information systems suport for physicians will result in 800 hospital closures and mergers of distressed hospitals over the next 60 months. These findings are based on the application of an eight-step framework for classifying information systems in healthcare entities. This framework is validated by survey instruments, site visits, interviews with senior management in 44 healthcare entities containing 576 hospitals, and judgments on the financial status of the healthcare entities