For HIT, Innovation, Not ROI, is the Benchmark

Edward Prewitt, February 28, 2012

Healthcare IT is expensive. Just for starters, consider that the per-bed cost to implement EHRs and CPOE runs between $14,000 and $65,000 in the US, according to the federal Office of Management and Budget. Even at the low end of the estimate, that's an astonishing amount of money, and it doesn't include higher-order IT systems such as clinical decision support.

The high cost of IT creates a catch-22 for healthcare leaders already strapped for cash and forecasting declining revenues in years to come. IT systems offer a way—perhaps the only way—to lower healthcare system cost in a sustainable manner. But where do you find the money to invest in IT?

A useful perspective comes from a US–European Union comparison. Jean-Pierre Thierry, MD, MPH, points out that the comparable cost for implementing EHR and CPOE is a magnitude lower in western European countries—under $6,000 per bed, on average, and as low as $3,000 per bed in Germany. Part of the discrepancy comes from higher administrative costs in the US due to the multiplicity of payer approaches and billing systems.

Put differently, it's bureaucracy, but not in the usual sense of the word. The state-organized payment systems in Europe run more efficiently than the maze of homegrown systems in the US.

Edward Prewitt Edward Prewitt is the Editorial Director of HealthLeaders Media. Twitter
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