A new study on an interoperable national healthcare information technology system shows that costs remain the biggest barrier to fulfilling President Bush's dream of a paperless system within a decade. Though the study doesn't identify who will pay what, study authors and sponsors say they will work to find the money.
The study looked at the cost of establishing a national network within five years.
"I don't think we're going to get there without some large, upfront investment," said lead study author Rainu Kaushal, a physician board-certified in internal and pediatric medicine and the project leader at the Center for Excellence for Patient Safety Research and Practice at Brigham and Women's Hospital in Boston.
But Kaushal said she doesn't expect that it all needs to come from the federal government. "I think their role is to provide some seed funding and provide some incentives for the private sector to invest in these systems and to create a payment model so these systems are sustainable over the long term."
Anne-Marie Audet, vice president of the healthcare quality improvement and efficiency program at the not-for-profit Commonwealth Fund, which co-sponsored the study, said: "What I think we will do in early September is put together a panel and have major policy discussions about where we'll find the money. It's time to have a pretty down-to-earth discussion about how we're going to finance this system. Is five years too ambitious, and if it is, what are we willing to settle for?"
The team of top researchers found that connecting major healthcare providers through a fully functioning national health IT network would quadruple current spending levels but would cost less than a previous estimate. They estimated five-year capital costs of $156 billion and $48 billion in operating costs, or less than $10 billion annually. The work was based on a synthesis of opinion from key IT experts that included President Bush's national healthcare IT coordinator, David Brailer. The new study contrasts with one released in January, which estimated construction costs of $276 billion over 10 years and $16.5 billion annually in operations costs. The new study uses some different assumptions about the nature of the spending.
In the Aug. 2 issue of the Annals of Internal Medicine, researchers from Brigham and Women's Hospital, Harvard University School of Medicine and other institutions further subdivided proposed spending on the national IT network into money that will set up centralized regional health information organizations, or RHIOs3/4which will be needed to connect providers -- and money to pay for the purchase and operations of seven essential provider-based IT systems.
A national system of RHIOs would require $53 billion in capital costs and $21 billion for operations to connect the healthcare organizations covered by the most recent study -- hospitals, physician offices, skilled-nursing homes, laboratories, pharmacies and home-care agencies.
Setting up all providers with the seven key IT systems would account for the remainder of the total estimated IT costs, or $103 billion in capital costs and $27 billion in operating expenses. Electronic health-record systems would be the most expensive of these systems, with a $62.4 billion price tag for capital costs and $15.6 billion in operating costs.
Hospitals would pay the bulk of the electronic-records tab -- nearly $36.4 billion for capital and $8.1 billion for operating costs. Physician office practices would pay $13 billion to buy and install EHR systems and nearly $3.8 billion to run them for the five-year period.
Other key IT systems would give providers the ability to view test results, equip providers with electronic order entry, allow for electronic claims submission, verify payer eligibility, provide secure patient communications and enable pharmacies to electronically receive prescriptions.
Physicians, because of their greater numbers, would foot the biggest connectivity bill at $31 billion for capital and $11 billion for operations. Software alone to achieve this level of connectivity would cost $20,000 per facility.
Smaller facilities and physician offices will be the most challenged, in part because their IT adoption rates are lower to begin with and because minimal IT costs represent a larger portion of the budget of a smaller facility than a large one.
Use of information technology is uneven today, with a digital divide opened between larger and smaller facilities and groups, and a wide variance in adoption between types of facilities and types of technology, the study found. For example, 86% of labs can electronically view test results, but only 8% of skilled-nursing facilities can do the same.
Continuing on the current spending path, the nation would spend $23.5 billion on capital and $6.6 billion on operating expenses by 2010 and still fall far short of achieving universal use of all seven component functions as well as national connectivity, the authors said.
Left to its own devices, at current spending rates, the healthcare industry would achieve almost universal use of electronic claims submission in five years, but only about 60% of pharmacies would be able to accept electronic prescriptions, according to the authors, and only slightly more than half of physician offices and hospitals would be able to review results electronically.
"I don't think the American public and the healthcare industry would tolerate us continuing with paper-based medicine for another 20 years," Kaushal said.