On Saturday, President-elect Barack Obama highlighted health information technology as part of his plan to improve the economy and health system. In his weekly address, Obama said: “To save not only jobs, but money and lives, we will update and computerize our health care system to cut red tape, prevent medical mistakes, and help reduce health care costs by billions of dollars each year.”

As the National Journal’s Tech Dose Daily reported, Obama is scheduled to meet next week with leaders from both parties to discuss his plan. Health IT wonks eagerly noted the attention. On The Health Care Blog, David Kibbe and Brian Klepper offer an updated “Open Letter” to the Obama Administration on Health IT today.

Amidst the enthusiasm, readers may well ask how these “billions of dollars” of savings will be achieved. Many of the cost estimates build on the RAND Health IT project that estimated fully implemented electronic medical records could save the U.S. health system $81 billion per year [free access article]. Another early estimate by Jan Walker and colleagues at Partners HealthCare placed the value of “electronic health care information exchange and interoperability between providers (hospitals and medical group practices) and independent laboratories, radiology centers, pharmacies, payers, public health departments, and other providers” at $77.8 billion per year [free access article].

Some analysts, questioned the estimates saying, “it ain’t necessarily so.” Jaan Sidorov of Geisinger Health Plan wrote in Health Affairs: “once physicians’ reluctance is overcome, the EHR’s [electronic health record’s] business case will not necessarily be aligned with the nation’s interest in lowering costs and increasing quality. As the EHR’s installation and maintenance expenses pass to the consumer through increased billings—absent any economic return on efficiency or quality—costs are likely to be accelerated.”

This past fall, Carol Diamond of the Markle Foundation and Clay Shirky of New York University called on proponents of health IT to resist the “magical thinking” that “technology will transform our broken system, absent integrated work on policy or incentives.” They laid out a description of an alternative policymaking route:

“The alternative route to transforming the health care system sets all its sights on the crucial destination. This is not, “And then ten thousand hospitals bought new databases,” but rather, “And then one million patients had better outcomes.” This alternative approach would focus on a minimal set of standards at first and would make utility for the user to improve health outcomes, rather than agreement of the vendor on the key criteria…. The appeal of magical thinking, as always, is not having to face hard problems. The appeal of this alternative route, hard as it might be, is that it could actually work.”

Stay tuned for a theme issue of Health Affairs devoted to Health IT in March 2009.