Predicted HIT savings fail to materialize

January 22, 2013

Despite hopes of cost savings, health information technology has failed to deliver, according to a new report.

Health information technology (HIT) advances have failed to save the healthcare industry money because the current systems are too disconnected and difficult to use, according to a new report from Rand Corp.

“The failure of [HIT] 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," says Art Kellerman, the senior author of the new study and holder of the Paul O'Neill Alcoa Chair in Policy Analysis at Rand, a nonprofit research organization. The study, titled “What it will take to achieve the as-yet-unfulfilled promises of health information technology,” was published in the January edition of Health Affairs.

Rand researchers had predicted in 2005 that HIT could save the United States healthcare industry more than $81 billion per year. But 7 years later, cost savings from HIT are nowhere to be found considering that healthcare spending has grown by $800 billion.

Kellerman’s paper, co-authored by Spencer S. Jones, says that big changes are needed to increase the productivity and efficiency of HIT.

“We believe that the original promise of [HIT] can be met if the systems are redesigned to address these flaws by creating more-standardized systems that are easier to use, are truly interoperable, and afford patients more access to and control over their health data,” Kellerman and Jones write. “Providers must do their part by reengineering care processes to take full advantage of efficiencies offered by health IT, in the context of redesigned payment models that favor value over volume.”

The study blames a “sluggish” adoption pace, the reluctance of clinicians to devote the time and effort to learn the new systems, and the failure of healthcare systems to implement necessary process changes for holding back the progress of HIT. Additionally, current electronic health record (EHR) systems have not been designed to “talk” to one another. Kellerman and Jones compare today’s EHR systems with “frequent flyer” cards rather than the ideal “ATM cards,” because instead of providing access to patient data form anywhere at any time, the current system is intended to enforce a brand loyalty to a particular healthcare system. The information in most systems today is useless when the patient goes to another healthcare system, the authors note.

Only about 40% of physicians and 27% of hospitals in the United States are using EHRs, estimates the Rand report-much lower than the 90% anticipated in the 2005 study. And those figures only represent the use of at least a “basic” EHR system.

Federal incentives have accelerated the use of HIT, but mostly among hospitals. And patients are even worse when it comes to using EHRs: although most patients believe they should have online access to their medical records, few use the access they already have. The report cites one study that found that only 42% of eligible patients signed up for online medical records access, and less than half of them viewed their online record more than once in the 2 years after they got access.

Other obstacles to saving costs through HIT go back to the function of the U.S. healthcare payment system. Kellerman and Jones write that under current payment models, HIT adoption actually may be causing hospital charges to increase.

“Until fee-for-service payment, which inherently incentivizes ‘do-more, bill-more medicine,’ has been phased out, healthcare providers will have little incentive to use HIT in ways that reduce costs instead of increasing them,” the authors note.

Kellerman’s and Jones’ suggestions for improvement:

  • Health information should be stored in one IT system that enables it to be retrievable by others, including doctors and hospitals that are a part of other health systems-especially in emergency situations.

  • Patients should be given ready access to their electronic health information and have the ability to view their own records and share them with the healthcare providers of their choice.

  • HIT systems must be engineered to aid the work of clinicians, not hinder it. Systems should be intuitive so they can be used by busy healthcare providers without extensive training.

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