In the healthcare world, 2006 may mark a watershed year for investing in information technology. Looking over the landscape of healthcare budgets, the influential accounting firm PriceWaterhouseCoopers' Health Research Institute concluded that the healthcare industry will devote five percent of its collective budget this year to new technology that will improve care, speed collections and spur the flow of data needed to track individual and institutional performance standards. That marks a major buildup in spending for an industry that has historically reserved only two to three percent of its budget for IT and that years ago gained a reputation as a stubborn shirker in the technology revolution. The investment that has already been made has been paying off handsomely, says the accounting firm. "Patient safety was rated as the most important benefit of increased information technology integration among hospital executives surveyed by PwC," said the accounting firm. "The research found that digitally advanced hospitals have better quality. They have seen a large drop in average length of stay and a large increase in operating revenues. These hospitals also ranked higher on seven of 10 process measures in the treatment of … heart attack, heart failure and pneumonia. "Information technology is crucial to resolving many of the issues plaguing the healthcare industry. Significant progress will be made in 2006 by government, industry coalitions and banks to build a technology infrastructure to improve claims processing, create electronic medical records, reduce medical errors and track performance. Healthcare organizations have little latitude for error and will to need to develop a system for making wise decisions about technology investments to ensure maximum acceptance, flexibility and return on investment." The Bush administration has made healthcare IT investment a key part of its overall strategy for reining in soaring costs and reducing errors. Just weeks ago, President Bush used the State of the Union address to highlight advances in healthcare IT as a needed fix for a troubled industry. Health and Human Services Secretary Mike Leavitt and the public-private American Health Information Community group are planning to roll out new pilot programs for personal medical records so that people can begin to see a future where they can easily access and manage their healthcare information. Online tools are also being developed to help people manage chronic ailments. The National Coordinator for Health IT, a government office run by Dr. David Brailer, is also testing e-prescribing programs in seven states. The programs will examine how e-prescribing can work to reduce costs and medical errors. Brailer's job description is to push the country to the point where all patient records will be kept in an electronic medical record. Healthcare Information and Management Systems Society CEO H. Stephen Lieber says that these kinds of government intitiatives are playing a big role in spurring broader reliance on technology to reduce errors. And even in smaller towns and rural areas, technology has taken root. "There are numerous success stories across the country that should be replicated," says Lieber. For example, in Beaumont, Texas, Southeast Texas Medical Associates credits its use of transcription for documenting medical records to helping the organization grow to three clinical locations and a fully integrated operational EHR system with 24 physicians and a staff of 260. Wayne Obstetrics and Gynecology, based in Jessup, Georgia with more than 6,000 patient encounters a year, is "a model of excellence for small provider practices in a rural setting." Just last month the eHealth Initiative gathered together a group of healthcare executives in Tampa to hear about the progress being made by newly minted regional health information organizations that are connecting hospitals and physician practices. The Tampa Bay RHIO, for example, is linking three hospitals and hundreds of local doctors and there are more than 100 such initiatives newly underway in 45 states. "By sharing knowledge at the community level we are seeing health information exchange efforts move from 'talk' to 'action," said Janet Marchibroda, the CEO of the eHealth Initiative. Those regional initiatives are aimed at fostering broad industry adherence to interoperability and a national IT architecture – all on the drawing board for this year. The trend toward e-health has also helped fuel the growth of a number of companies, like Irvine, California-based Quality Systems, which sells a mix of practice management software with patient record systems.