NCPA - National Center for Policy Analysis

Hospitals At Y2K Risk

March 29, 1999

Hospitals may be behind other industries in preparing for the Year 2000 computer problem, experts warn. Even the most basic hospital services today depend upon computers.

For example, electronic security controls -- which allow or deny entry into various hospital locations -- depend on computers.

  • Only 21 percent of 301 hospitals surveyed last fall had integrated and tested Y2K upgrades in their administrative computer systems.
  • Computer systems in hospitals schedule patients, keep records, monitor treatment and medications, order supplies, track prescriptions, analyze diagnostic tests and record results.
  • Many hospitals intend to beef-up staff by canceling vacations for the first two weeks of January, discharge all but the most critically ill patients and cancel all elective surgeries.
  • The 5,000-member American Hospital Association estimates that the cost of getting ready for Y2K will come to $8.2 billion nationwide by January 1.

Moreover, the federal Health Care Financing Administration -- which is responsible for reimbursing $330 billion annually to hospitals and physicians under the Medicare and Medicaid programs -- is struggling to patch together its own computer network. The agency has 50 million lines of computer code that must be assessed for Y2K compliance.

Hospital officials warn that unless payments continue to be made in a timely fashion, they will have to dip into cash reserves almost immediately if they are to keep their facilities open.

Source: Milo Geyelin, "Hospitals Face Complex Task Preparing for Dec. 31," Wall Street Journal, March 29, 1999.


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