Questioning The True Cost-Savings Of Digitized Health Care Records

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In an opinion piece today in The Wall Street Journal, Harvard professor Stephen Soumarai argues that the savings promised from electronic health records is little more than hype.

Soumerai, a professor of population medicine at Harvard Medical School and the Harvard Pilgrim Health Care Institute, writing with Ross Koppel, a professor of sociology and medicine at the University of Pennsylvania, suggests that the IT guys selling this stuff are promising huge savings that “turn out to be chimerical:”

Since 2009, almost a third of health providers, a group that ranges from small private practices to huge hospitals—have installed at least some “health IT” technology. It wasn’t cheap. For a major hospital, a full suite of technology products can cost $150 million to $200 million. Implementation—linking and integrating systems, training, data entry and the like—can raise the total bill to $1 billion.

But the software—sold by hundreds of health IT firms—is generally clunky, frustrating, user-unfriendly and inefficient. For instance, a doctor looking for a patient’s current medications might have to click and scroll through many different screens to find that essential information. Depending on where and when information on a patient’s prescriptions were entered, the complete list of medications may only be found across five different screens.

Now, a comprehensive evaluation of the scientific literature has confirmed what many researchers suspected: The savings claimed by government agencies and vendors of health IT are little more than hype.

To conduct the study, faculty at McMaster University in Hamilton, Ontario, and its programs for assessment of technology in health—and other research centers, including in the U.S.—sifted through almost 36,000 studies of health IT. The studies included information about highly valued computerized alerts—when drugs are prescribed, for instance—to prevent drug interactions and dosage errors. From among those studies the researchers identified 31 that specifically examined the outcomes in light of the technology’s cost-savings claims.

With a few isolated exceptions, the preponderance of evidence shows that the systems had not improved health or saved money. For instance, various studies found the percentage of alerts overridden by doctors—because they knew that the alerted drug interactions were in fact harmless—ranging from 50% to 97%.

The authors of “The Economics of Health Information Technology in Medication Management: A Systematic Review of Economic Evaluations” found no evidence from four to five decades of studies that health IT reduces overall health costs.

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  • Mary

    I read this with interest. I used to work in a large medical practice and before that I worked in an insurance company,…. many insurance comapnies in fact, where I spent years reading or trying to read messy doctor’s handwriting. the old saw about messy and illegible doctor’s handwriting was fact! What the writer fails to take into account is that this new medical technology give you something you never had before… clear written legible notes as to what is wrong with the patient, what his diagnosis, prognosis, and all of his prescriptions are, along with medical history.. Before that, it was a struggle to read those notes. I realized that very abruptly after having read my husband’s doctor’s hand written notes, which are circa 1972-5 and earlier. Poor handwriting was responsible for medical errors that caused death and injury to many- not just eye strain to claims adjusters. You may not be able to quantify what didn’t happen in terms of lost productivity from additonal time spent in the hospital, or from someone dying from a medical error which could have been avoided if someone had been able to read the doctor’s notes, but sure the lives saved must be worth something.

  • JEngdahlJ

    Business intelligence can help hospitals get a better return on
    investment for their electronic medical records.

  • Reasonable?

    I work in health care IT for one of the big EMR vendors here in MA.
    I think the allegations above are mostly true, this article doesn’t touch on the reason.

    The stimulus for EMR adoption advantaged companies that could sell fast at competitive prices. Product innovation was contrained to meeting “Meaningful Use” criteria established by the federal government. These two factors narrowed entry to new upstart EMRs.
    Medical practices are buying EMRs that roughly match their current work
    flows. Administrators check patients in, nurses colllect vitals,
    doctors examine and writes prescriptions. The savings wiith EMR’s is in
    the billing department. So cost savings mostly accrue to large organizations, not small practices. At small practices, Sydney the admiin spends 30 minutes more a day doing data entry and saves 45 minutes on getting billing processed.

    Most importantly technology lowers costs when coupled with a disruptive business model. The business model for heath care is still evolving. EMRs are necessary but not sufficient for cost saving innovations to come.