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RAND Walks Back HIT Savings Estimates

John Commins, for HealthLeaders Media, January 14, 2013

"We're moving as fast as we can"
John Halamka, MD, CIO at Beth Israel Deaconess Medical Center in Boston, says that the savings from EHR haven't been realized yet because "we are still at an early stage of EHR implementation, healthcare information exchange connectivity, and decision support. Meaningful Use Stage 2 in 2014 will take us to a new level that will begin to reduce redundancy, over treatment, and waste. Stage 3 in 2016 will take us even further by enhancing outcomes."

"We're on a journey and I have every expectation we'll change the practice of medicine to improve its value (quality/cost)," Halamka wrote in an email exchange. "We're moving as fast as we can to accomplish this and I believe by 2016 we'll realize the improvements we're seeking from the meaningful use foundation we've built. Expecting significant cost reductions by 2013 is not realistic at this point in the process."

A lot of the nagging HIT problems
Jeff Smith, assistant director of public policy with the College of Healthcare Information Management Executives, concedes that HIT has been off to a sluggish start in some areas, but he says that is to be expected.

"It is something that you see especially in the technology world when you have these great expectations about what technology can do and when you start to implement the technology especially on such a wide scale you see that it doesn't always meet the highest expectations," Smith says. "I think when they came out with the $81 billion annual savings that was a high expectation first of all and it's a difficult calculation to come up with consistently."

That said, Smith adds that the report also identifies a lot of the nagging problems with HIT, including issues with interoperability and usability, the fragmentation of the vendor market, and a lack of patient-generated data.

"When we are looking at academic articles, they are relying on data in a high-tech world and even data up until now is going to have a certain bias towards the old way," he says. "So when you look at this article and other articles that focus on 'is health IT worth the ROI?' you really have to think 'well the data they are using is by and large contingent upon a world that was fragmented.'"

Stage 1 took great leaps and bounds toward the adoption of election health records, but it's not going to be until we get to Stage 2 that we start to see things coalesce, especially around standards that will lead to greater interoperability," he says.

"My initial reaction is [that] if they revisit this same study in another five years and they may the same conclusions then we might have some problems, we might really need to reassess what is going on.

"But the pieces that have been put in place in Stage 1 meaningful use generate data that didn't exist before and the pieces for Stage 2 will align the data in a standardized way so people can use it, and you are going to see a leapfrog effect."

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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?