For a while now, experts in information technology have been chiding hospitals to slim down on the paper patient files and prescription slips and get into better digital shape. While many of the individual pieces of equipment in health care are now computerized, capturing data from these devices and storing it in a centralized system, which then allows for an effective transmission of information to the right people at the right time, lag far behind. One reason that hospitals have been slow to adopt such tools is they’re expensive to implement, and managing complex medical information is a difficult job.

Now several big players in health care and data management are bringing their expertise and money to bear on the problem. HealthSouth, one of the largest U.S. providers of health-care services, and Oracle, the giant software supplier, are the latest to announce plans to build an “all-digital hospital.” The $100 million facility in suburban Birmingham, AL, will include patient beds with information screens connected to a central database, electronic medical records storage, digital imaging of x-ray film and a wireless communications network that will permit doctors and nurses to update and access patients’ medical records using handheld devices. Doctors, for example, could access a patient’s history at his or her bedside, calling up x-rays taken two years ago or the results of the blood test taken that morning.

Not all of this technology is new, of course, but what will be novel about the HealthSouth facility is that all of the data will be in compatible electronic systems and stored in a centralized location. In most existing hospitals, medical departments work with customized software or databases that are not compatible with each other, and much of the data is stored on paper. HealthSouth says all of the Birmingham hospital’s data will be accessible to every department, so prescriptions can be automatically checked for possible interactions, and tests won’t be repeated in different departments.

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. “A digital hospital would require a lot of up-front investment. Electronic transactions would reduce errors and improve patient care efficiency, but it’s expensive to install,” says Barry Hieb, a physician who is also a research director for Gartner, a technology consulting firm. And, says Hieb, beyond the financials there are technology challenges. “We [Gartner] have a mixed response to the plan. From HealthSouth’s perspective, they’ve done a good job turning existing facilities around, but they don’t have a record of automated solutions. And Oracle isn’t a clinical-applications vendor. We’ve seen efforts like this fail before.”

But HealthSouth says it’s encouraged by earlier trials of digital doctoring. In 1994, the company rolled out a wireless system using handheld devices for automated clinical charting. That first taste of success inspired Richard M. Scrushy, CEO of HealthSouth, to take things farther. “Recent developments in IT made the idea of a digital hospital seem logical and cost effective,” says Scrushy.

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.