Savings outweigh high cost of IT exchange

Health Management Technology, March, 2005

The price tag to build a national system of healthcare information exchange over the next 10 years is a hefty $276 billion, according to a study by the Center for Information Technology Leadership (CITL) at Partners HealthCare System in Wellesley, Mass. Plus, operating the system would cost another $16.5 billion a year. But the payoff would be almost $78 billion a year in savings.

The study, by six researchers at CITL, is in response to a formal request last fall by David Brailer, M.D., at the Office of the National Coordinator for Health Information Technology, for ideas on how to design a national health information network. The researchers developed a 10-year national implementation scenario and determined that return on investment would start in the fifth year. Following implementation of the network, hospitals and clinician offices would save $33.5 billion annually, followed by payers ($21.6 billion), laboratories ($13.1 billion), radiology centers ($8.2 billion) and pharmacies ($1.3 billion), according to the report.

Researchers said the numbers are conservative because the study considered only savings from automating "direct care" transactions such as test orders and results, electronic prescriptions and billing functions. Also, the costs of implementing the network included the costs for all providers to purchase new, interoperable information systems.

The report, "The Value of Health Care Information Exchange and Interoperability," is available at the HIMSS Web site for $85 (members) and $105 (nonmembers). Visit www.himss.org/asp/book.asp?ContentID = 52848.