Saving money can be expensive.
Indeed, the quest to save dollars in the nation's $2.1 trillion annual healthcare bill is becoming a lucrative market of its own. Thousands of companies, large and small, are pitching cost-saving ideas that range from electronic health records to new medical devices.
It's not all marketing hype. Experts in health policy agree that there is a real opportunity to curb health spending, which last year was the equivalent of $7,000 for every man, woman and child in the country. Studies predict a gain of as much as 30% in efficiency, mostly through reducing unnecessary tests and prescriptions, paperwork and medical mistakes.
Every cost-saving product or service requires an upfront investment, which bets that it will produce overall savings. And so the paradox kicks in. "There is money to be saved, but it is not going to be cheap," said David Cutler, a health economist at Harvard University.
The experience of Richard Baron, a physician who practices with three other physicians in an office in Philadelphia, provides a glimpse into the predicament. In 2004, Baron and his colleagues made the transition from ink and paper to computers and EHRs. They were doing what healthcare reformers had been advocating for years. But the arithmetic of investing in health information technology is daunting, especially for small practices like Baron's. His office spent $140,000 on personal computers, including tablet PCs, servers, software and installation.
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