Cost Savings From Health IT: Priceless

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Of all of the arguments at the heart of the U.S. health care debate this year, one stands out as particularly nonpartisan and uncontroversial: If we could just migrate everything doctors and hospitals do onto computers, the whole system would run more smoothly and, in turn, be cheaper.

A RAND Corporation study estimated the savings from electronic medical records would be about $77 billion a year. The Center for American Progress added the federal government would save $196 billion over the next decade. The Obama administration has made the argument — probably because of its consensus appeal — a focal point of its health care pitch going back to the 2008 campaign. The whole idea just seems, well, common sense.

Not to spoil a good holiday week (and a rare hiatus in the health care wrangling in Washington), but a new Harvard study suggests all of these claims are simply wrong. Health “information technology,” the research concluded, has yielded neither substantial efficiencies nor any real savings at the U.S. hospitals that today use various forms of it.

The results of the national survey of about 4,000 hospitals were published Friday online in the American Journal of Medicine. They reflect the reality that even health IT is intimately bound up in a system tied as much to profits as health outcomes. Most of the software currently on the market — and purchased by hospital administrators, not doctors — is designed to facilitate billing, not necessarily patient care.

The Harvard study was based on a survey of hospitals currently using health IT, while the other figures are based largely on mathematical projections and not analyses of existing data — data which even the Congressional Budget Office said before now existed in scant form. A link to the CBO assessment can be found here.

“In my everyday work with a computer system at my hospital, which is one of the widely distributed ones, I go through probably a couple hundred unnecessary mouse clicks a day that are there purely for billing purposes,” said David Himmelstein, a Harvard professor and one of the authors of the study, alongside Adam Wright and Steffie Woolhandler.

Whenever he sees a patient, for example, he must answer these questions: Did he have to use an interpreter? If so, was the interpretation done face-to-face or over the phone?

“That’s purely because the hospital can be reimbursed by some insurers a bit more if I have an interpreter,” he said.

In one sense, this software actually does the opposite of what many of us assume. Rather than help anyone save money, it helps maximize the hospital’s ability to collect money from patients and insurers.

Health IT could, in theory, improve the work of clinicians and the quality of patient care, allowing for benefits like faster access of lab results and better communication between referring doctors. But Himmelstein’s critique is twofold: The systems currently in existence aren’t prioritized to do that, and even if they were, the result wouldn’t include the windfall in savings we all expect.

When asked why so many of us assume this to be true when it’s not, Himmelstein deferred to this YouTube clip of a cheery 1961 promotional video touting the endless promise of electronic medical records:

We’ve been convinced, Himmelstein says, by a 40-year marketing campaign and our own wishful thinking.

“We wish that there were a quick, easy solution that didn’t actually involve any difficult political decisions for how we’re going to save money for health care and improve the quality of care,” he said. “That’s part of what would be lovely about computers – gee, we don’t have to do anything but install this machine and solve all these problems.”

It’s easy to imagine Himmelstein’s sobering study in the hands of red-faced Republicans on the floor of the Senate as it moves forward after Thanksgiving with the health care debate. See, the research seems to suggest, the Obama administration doesn’t know what it’s talking about.

Himmelstein and his colleagues are no strangers to academic cherry-picking on the Hill. They authored another report this year, linking 45,000 deaths a year in America to the lack of health care coverage, that made little-known Florida congressman Alan Grayson a C-Span star.

But if any politicians are wondering what the researchers think, Himmelstein and his fellow authors — members of Physicians for a National Health Program — believe that in the absence of a silver-bullet solution like health IT, Congress has to make a really politically difficult decision.

“They ought to start from scratch and do it right,” Himmelstein said.

Which means what exactly?

“A single-payer national health insurance system.”

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