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IT Investments Have Led to Spending Reductions, Says Research

By HealthLeaders Media Staff  
   September 18, 2017

Health information exchanges are beginning to show their promised value to the healthcare system, according to University of Notre Dame research.

Information technology investments in healthcare lead to significant spending reductions, potentially in the billions of dollars, according to research from the University of Notre Dame.

Health information exchanges (HIE) are beginning to show their promised value to the healthcare system, according to the research, which is forthcoming in Information Systems Research.

“We find significant spending reductions in health care markets that have established operational HIEs, with an average savings of $139 per Medicare beneficiary per year (1.4 percent decrease),” one of the authors,  Idris Adjerid, a professor at Notre Dame’s Mendoza College of Business, said in a statement.

“This equals a $3.12 billion annual reduction in spending if HIEs were to be implemented nationally in 2015 (the most recent year complete Medicare spending data was available).”

Many HIEs were created because hospitals needed ways to exchange medical data that were more efficient than photocopying, mailing, or faxing records. The research shows that when HIEs appear in regional markets, massive cost savings follow. Because of that, there is long-standing interest in implementing HIEs nationally.

The researchers collected annual data from a seven-year period (2003 through 2009) to compare average Medicare spending per beneficiary (adjusted for regional variation in age, race, and gender) in healthcare markets with an operational HIE relative to those without an operational HIE.

They analyzed these data using advanced econometric models that accounted for factors such as healthcare delivery infrastructure, regional hospital quality, health IT adoption, patient demographics, and economic factors.


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