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Health IT On Obama Agenda

January 5th, 2009

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.

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3 Responses to “Health IT On Obama Agenda”

  1. acavale Says:

    Dr. Miller makes an excellent point. The overhwelming consensus among practicing physicians is that IT by itself will not result in cost savings nor will it result in reduction in errors, because while limiting errors related to legibility, etc., EMRs will tend to increase errors from other sources like typing or programming.

    Further, if government wants to see substantial implementation of IT amongs the nation’s practices, it has to come up with a simple but effective method of levelling the playing field when it comes to IT companies. Current rate of expenditures related to implementation and maintenance of CCHIT-certified EMRs is beyond the reach of the majority of small practices, which provide more than 50 % of all the care in the communites across the country. While physician practices have to limit their revenues in a price-fixed marketplace, they simply cannot afford to continue to pay conventional “freemarket” rates to IT vendors. The goverment has to decide which side of this unequal equation can be eliminated – either allow physicians to collect their fair, freemarket payment rates from their customers/patients or let IT vendors play by the same price-fixed rules of third-party payment system.

    Incidentally, I find this idea of outcome-based reimbursements rather unique to the health care field. For instance, do we pay our accountants more if they get a higher refund from the IRS or less if we end up paying more? Or do we stop paying our investment advisor since all our investments tanked last year? Or do we not pay our barber because the haircut did not come out exactly as we had expected? Or do we not pay our lawyer in case we lost our legal case in court? Is there any profession that is reimbursed in such a manner, simply based on outcomes? While the idea sounds great, the perils of pursuing such ideas are far more than meets the eye.

  2. Jane Hiebert-White Says:

    Dr. Miller – Thanks for your comment! For readers who want to see the CBO May 2008 report, here’s a link to the PDF:

  3. Michael D. Miller, MD Says:

    The debate about how much health IT will save or cost – and to whom – has been going on for many years. The Congressional Budget Office’s May 2008 report that concluded there were no savings from health IT fueled this debate – and started a back and forth compare and contrast with the RAND report. [Note – one of the confusions was that CBO was only looking at savings and cost for Federal programs, and only within a 5 year timeframe.]

    I wrote about this controversy last May, (see –, and the reality is that health IT needs to be viewed as prevention: Money is spent up front to achieve improvements (cost savings, better quality, etc.) down the road. In the case of IT, the upfront costs can be significant, and those costs and the later savings may not be equally distributed, i.e. those who pay might not see the most benefits, etc.

    Another major challenge for making health IT useful and produce savings and improving quality, is getting clinicians and other health professionals to use it properly. This is particularly true for those working in the outpatient setting, because unlike in a hospital environment they often have much less institutional IT support and capital resources to invest in IT – and in its updating, maintenance and training. This is aspect of health IT needs more attention and funding, since dropping machines into the outpatient world will get IT “out there,” but it could also prevent long-term successful adoption if clinicians initial experiences are frustrating and counter-productive to their own interests.

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