RAND Walks Back HIT Savings Estimates

John Commins, for HealthLeaders Media , January 14, 2013

RAND researchers are walking back a report that the nonprofit public policy think tank issued in 2005 estimating that the widespread adoption of healthcare information technology could trim more than $81 billion each year from the nation's healthcare tab through improved efficiencies.

Instead, a new RAND analysis by a new team of researchers, published this month in Health Affairs, notes that seven years later, expectations about the safety and efficiency of HIT mostly have not been met, and annual healthcare spending has increased by $800 billion. 

"The failure of health information technology to quickly deliver on its promise is not caused by its lack of potential, but rather because of the shortcomings in the design of the IT systems that are currently in place," said Dr. Art Kellermann, the study's senior author said in a media release.

"We believe the productivity gains of health information technology are being delayed by the slow pace of adoption and the failure of many providers to make the process changes needed to realize the potential," Kellermann said.  

The new RAND study blamed the underperformance on several factors, including: sluggish adoption of HIT systems, along with balky systems that are hard to use and aren't interoperable; and a failure by providers and hospitals to adjust care processes to better benefit from HIT.

However, just as the 2005 RAND study over-estimated the potential savings with implementation of HIT, several observers tell HealthLeaders Media that the latest RAND report may be prematurely drawing too dire a picture of HIT adoption.

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2 comments on "RAND Walks Back HIT Savings Estimates"

Frank Poggio (1/14/2013 at 3:31 PM)
As one who has worked as a health provider CFO and CIO, systems developer/vendor, and health care consultant for over forty years I am not surprised Rand came to its current conclusion. I was really surprised when they said in 2005 we could save $80bill a year. In all my years of health care experience I have never seen a capital investment in healthcare/medicine actually save dollars when you take a total health system view. Think about it. Back in the 60's most lab procedures were done manually. So for better quality and efficiency we invented lab auto analyzers, they could do 2 to 4 chemistry tests all at once. In the 70's it went up to 20 tests, in the 90's it went up to 50 and it could be 'discreet' meaning you could pick and choose which test to run. Was all this more efficient? You bet it was. Was it better quality health care? Of course it was, and better quality (and quantity) generated far more information and as such identified many previously hidden patient medical problems. And finding more medical problems meant more health care was needed. The same can be said for Radiology, first simple Xrays, then CAT scans, PET scans,then NMR, and so on. More efficient, yes, better health care, yes, and more medical problems identified. In short, better diagnoses tools means you will always find more patient problems, which in turn demands more therapies, and more protocols, more specialists, and even more sophisticated tools. Then add to that an aging patient population, more chronic illnesses, and societal issues such as obesity. What we seem to forget (or ignore) is that health and medical care is not a zero sum game. We have absolutely no idea how many medical problems are out there. The human body is far too complex. Youare not born with with a maintenance manual or a trouble shooting guide. For over a thousand years, using trial and error, we have been trying to 'reverse engineer' the human body, trying to identify all these possible problems. Yet it seems for every one we do identify we find three more. All these wonderful medical devices have taken us deep into human biology and we still could fill an ocean with what we do not know. Looking at overall health expenditures and expecting EMRs to reduce them is like believing that the new screw driver set you just bought is all you'll need to fix your car. EMRs are no more than tool and a relatively simple one at that. Frank Poggio The Kelzon Group KelzonGroup.com

Jeff leston (1/14/2013 at 3:17 PM)
RAND- Those were the people who used to estimate how many millions would be killed in a nuclear war, right?




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