September 14, 2005

Computer health records seen saving US $81 billion

By Veena Trehan

WASHINGTON (Reuters) - Computerized medical records could
save the United States more than $81 billion annually through
greater efficiencies and reduced errors, according to a study
published on Wednesday.

The RAND study appearing in Health Affairs journal follows
a report in the same publication in January that predicted $78
billion in savings by speeding the computer exchange of patient
information between health care providers.

A bill to encourage development of health information
technology cleared the U.S. Senate's Health, Education, Labor
and Pensions Committee in July.

Proponents of electronic medical records and computerized
drug prescriptions believe such systems promise great savings
but some warn the technology will be difficult to implement and
is unlikely to yield huge benefits any time soon.

Harvard Medical School health policy experts, in a
commentary on the RAND study, said steady but slow progress had
been made in medical computing over the past three decades.

"But computers don't offer the panaceas that politicians
hope for and computer firms are peddling," said Dr. David
Himmelstein, an associate professor of medicine at Harvard
University and former head of clinical computing at Cambridge
Hospital in Massachusetts.

The RAND report predicted improved efficiencies of $77
billion annually and an additional $4 billion from improved
safety, primarily through reduced prescription errors.

RAND said funding for the study was provided by companies
with an interest in health information technology including
Cerner Corp., General Electric Co., Hewlett-Packard Co.,
Johnson & Johnson, and Xerox.

The RAND study assumed an average investment of $7.7
billion per year over a 15-year period resulting in 90 percent
of doctors and hospitals "successfully adopting" the technology
and using it "effectively" to achieve the forecast savings.

Currently 20 to 25 percent of hospitals and 15 to 20
percent of physicians' offices have adopted computerized
records but are "generally limited" in their ability to share
information, according to the RAND researchers.

They recommended that the federal government accelerate
efforts to set universal technology standards to foster
adoption and to consider financial incentives for institutions
embracing the technology, according to RAND researchers.

"It is time the government and others who pay for health
care to aggressively promote health information technology,"
said Richard Hillestad, the RAND senior management scientist
who led the two-year study.

But Dr. Himmelstein of Harvard sees the complexity of the
challenge as a major obstacle.

"To mount a national program to do in every hospital that
which has yet to be done in any hospital ... risks failure on a
colossal scale," he said.