A Congressional Budget Office report questioning the value of healthcare information technology was greeted coolly by industry executives and at least one member of Congress.
The CBO report, released on May 20, said that two widely cited estimates of the potential savings from implementing health IT may be overstating the case. One of the reports referred to by the CBO was a 2005 RAND Corp. study that had estimated the national healthcare savings from implementing electronic records would reach $77 billion after 15 years and would cost $7.6 billion per year over the period. The CBO also questioned numbers from a Center for Information Technology Leadership study from 2003 that had estimated savings to doctors of electronic medical records would be $44 billion per year at a total cost of $14 billion to $30 billion.
For a number of reasons, they are not an appropriate guide to estimating the effects of legislative proposals aimed at boosting the use of health IT, the CBO report stated. The RAND study measures the potential impact of a national IT investment, not the likely impact, noting also that financial penalties would accrue to physicians and other providers by installing IT systems, according to the CBO. The CBO also said the RAND research excluded any studies that failed to find favorable results. The decision to ignore evidence of zero or negative net savings clearly biases any estimate of the actual impact of health IT on spending. And like RAND, assumptions used by the Center for Information Technology Leadership appear to be overly optimistic, the CBO said. The RAND research project was funded by Cerner Corp., General Electric Co., Hewlett-Packard Co., Johnson & Johnson Services and Xerox Corp.
The CBO also questioned the value of health IT outside of integrated systems. For providers and hospitals that are not part of integrated systems, the benefits of health IT are not as easy to capture, and perhaps not coincidentally, those physicians and facilities have adopted EHRs at a much slower rate, according to the authors of the CBO report. Office-based physicians in particular may see no benefit if they purchase such a productand may even suffer financial harm, the report said.
But proponents of health IT, in turn, questioned the value of the CBO study, which did not produce its own estimates of any potential savings and ignores some of the practical matters encountered when installing health IT systems.
Rep. Timothy Murphy (R-Pa.), co-chairman of the 21st Century Health Care Caucus, which favors health IT usage, said that he has battled with the CBO in the past over how it analyzes the short- and long-term financial impact that health IT would have on the industry, and said that the latest report is far off the mark.
Im concerned about this, Murphy said. If the CBO were estimating costs for the Pentagon, they would say: We dont need these jets. Were doing really well with horses.
Others noted that it is difficult to know how much value comes from IT because of limited data ahead of installation. Shelli Williamson, executive director of the Scottsdale Institute, a not-for-profit health IT association made up of healthcare providers, said one of the reasons a rigorous return on investment analysis isnt often done in advance of an IT purchase is because the systems themselves are often the sole source of data against which their efficacy can be measured. When you put in a system that notes and catches adverse drug events or other kinds of catches for errors, before you had these systems in place errors were occurring and nobody knew it, Williamson said. Now, you can say, Oh, we prevented 500 errors, or 1,000 errors, but there was no baseline because there was no way of catching them before. How do you know how much youve saved or improved if you didnt know what the starting points were?
For example, two years ago 19-hospital Banner Health, Phoenix, embarked on a systemwide, clinical IT development program with a price tag in excess of $100 million. But when Banner started, it had no hard ROI analysis on which the investment was made. We, like a lot of people, kind of took the plunge, so to speak, because it was the right thing to do, but we told our board we would do a make-good analysis after the fact, said Judy Van Norman, system director of care transformation at Banner.
Joseph Sullivan, chairman of the RAND Health Board of Advisors, defended the RAND macroeconomic analysis. The RAND study is I believe, the definitive work in this area, Sullivan said.