RAND Walks Back HIT Savings Estimates

RAND researchers are walking back a report that the nonprofit public policy think tank issued in 2005 estimating that the widespread adoption of healthcare information technology could trim more than $81 billion each year from the nation's healthcare tab through improved efficiencies.

Instead, a new RAND analysis by a new team of researchers, published this month in Health Affairs, notes that seven years later, expectations about the safety and efficiency of HIT mostly have not been met, and annual healthcare spending has increased by $800 billion. 

"The failure of health information technology to quickly deliver on its promise is not caused by its lack of potential, but rather because of the shortcomings in the design of the IT systems that are currently in place," said Dr. Art Kellermann, the study's senior author said in a media release.

"We believe the productivity gains of health information technology are being delayed by the slow pace of adoption and the failure of many providers to make the process changes needed to realize the potential," Kellermann said.  

The new RAND study blamed the underperformance on several factors, including: sluggish adoption of HIT systems, along with balky systems that are hard to use and aren't interoperable; and a failure by providers and hospitals to adjust care processes to better benefit from HIT.

However, just as the 2005 RAND study over-estimated the potential savings with implementation of HIT, several observers tell HealthLeaders Media that the latest RAND report may be prematurely drawing too dire a picture of HIT adoption.

"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."

EHR adoption "in its infancy"
Pamela McNutt, senior vice president/CIO at Dallas-based Methodist Health System, says HIT advocates were a little naïve early in the process.

"There was a bit of over-simplistic thought that if we just purchased and installed some software that suddenly everyone would start connecting and talking and it is premature," McNutt says. "Even people who have met high levels and are ready to meet Meaningful Use Stage 2 still have to work to get efficiencies."

"Adoption is happening, but it is still in its infancy," she says. "It is not mature, even for people who've met meaningful use Stage 1. That is the reason there are stages, they bring us to different levels of maturity. And this whole healthcare information exchange idea is also in its infancy. We haven't had enough time to see the impact. We do need organizational change. Things like shared-savings programs, medical homes that are going to drive the change from different directions. We are getting there but we aren't there. But nobody should be looking at this and saying it didn't work."

McNutt says the whole idea of "efficiencies" in HIT is a bit undefined. "We have to talk about what are the efficiencies we are looking for," she says.

"I don't think anyone went into this thinking that this would cut hours out of doctors' and nurses' time every day. But are we going to get better outcomes, less complications, less morbidity and mortality.  That all adds up to dollar savings in a different kind of way, but I don't think I'd call that efficiency."

McNutt says using HIT to reduce costs won't happen until it can be done on a population health basis.

"When records from all providers, post-acute, acute, pharmaceutical, when all of that can be put into a usable record, that is where we might begin to have some savings," she says.

"But the RAND study does make a point that probably is true—that even if you have all the tools in the world to see what is going on in the patient you have to change your work flow to use the information from those tools."