Extrapolating Evidence of Health Information Technology Savings and Costs

Extrapolating Evidence of Health Information Technology Savings and Costs

Federico Girosi
Robin Meili
Richard Scoville
Copyright Date: 2005
Edition: 1
Published by: RAND Corporation
Pages: 108
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  • Book Info
    Extrapolating Evidence of Health Information Technology Savings and Costs
    Book Description:

    Provides the technical details and results of one component of a study to better understand the role and importance of Electronic Medical Record Systems (EMR-S) in improving health and reducing healthcare costs--the national-level efficiency savings that would be brought about by using Healthcare Information Technology-and the costs the nation would have to incur to realize those savings.

    eISBN: 978-0-8330-4099-2
    Subjects: Health Sciences

Table of Contents

  1. Front Matter
    (pp. i-ii)
  2. Preface
    (pp. iii-iv)
  3. Table of Contents
    (pp. v-vi)
  4. Figures
    (pp. vii-viii)
  5. Tables
    (pp. ix-x)
  6. Summary
    (pp. xi-xiv)
  7. CHAPTER ONE Introduction
    (pp. 1-4)

    Health Information Technology¹ (HIT) is receiving attention from the U.S. President on down, and many would like to see it play an expanded role in providing care. The result of our effort to gain a better understanding of the potential of HIT to transform the provision of healthcare is documented in Hillestad et al. (2005), and the policy implications of that work are reported in Taylor et al. (2005). In this monograph, we expand on some of the quantitative aspects of the Hillestad et al. and Taylor et al. research, providing detailed supporting material on the following four related aspects...

  8. CHAPTER TWO Scaling Up and Projecting Savings into the Future
    (pp. 5-18)

    Our typical scenario for how we use evidence from the literature on HIT-related savings to extrapolate the savings figures to the national level involves a provider (a physician or a hospital) that incurs a yearly expenditure of a certain type and uses HIT to reduce it. We refer to the yearly expenditure per provider as thebase cost B, and we denote the percentage reduction (savings) in base cost obtained by using HIT ass. For example, a physician might buy an EMR-S and be able to save 50 percent (s=0.5) of his or her yearly expenditure of $7,000 (B=7,000)...

  9. CHAPTER THREE Estimating the Benefits of HIT
    (pp. 19-40)

    In this chapter, we set out to quantify the benefits of HIT by extrapolating findings from the literature to the national level. We document savings separately for the inpatient sector and the outpatient sector, where byoutpatientwe mean all the ambulatory practices, and not necessarily only those associated with hospitals. (Other transaction and administrative costs relating to claims processing and insurance-program enrollment are discussed in Appendix B.) Within each sector, we consider several categories of savings, such as the savings related to reductions in duplicate laboratory tests or to reductions in length of stay. For each category of savings,...

  10. CHAPTER FOUR Estimating the Cost of HIT
    (pp. 41-52)

    The savings described in the preceding chapter are contingent on the adoption of EMR-S in both inpatient and outpatient settings. In the following sections, we estimate how much it will cost providers to acquire and maintain these systems. We do not include in our calculations expenditures incurred to allow all the different components of the healthcare system to share patients’ clinical information. Although such sharing is a very important component of HIT, none of the savings documented in the preceding chapter depends on such capabilities. A tentative estimate of the cost, but not the benefit, of “connecting” all the U.S....

  11. CHAPTER FIVE Simulation of Financial Incentives
    (pp. 53-64)

    The analysis of the preceding chapters suggests that large benefits are to be gained from HIT adoption and that the nation might benefit if the pace of HIT adoption were to quicken. In this chapter, we consider financial incentives aimed at increasing HIT-adoption rates. We will address the question of how much they could cost, whether the benefits would outweigh the costs, and how incentive parameters, such as size and duration, affect the benefit/cost ratio.

    We do not have detailed data about how individual providers might react to financial incentives, so our modeling is very simple and is done at...

  12. CHAPTER SIX Conclusion and Summary
    (pp. 65-68)

    In this document, we have presented several findings on the costs and benefits of HIT. We do not draw here the implications of these findings for policy; a discussion of HIT policy is presented in Taylor et al. (2005), nor do we attempt to set them against the larger background of how HIT is transforming healthcare, which is discussed in Hillestad et al. (2005). Rather, we summarize here the main lessons learned. We start with costs and benefits, whose main statistics are shown in Table 6.1.

    Several messages emerge from this table:

    Large benefits are associated with HIT adoption. Summing...

  13. APPENDIX A Taxonomies
    (pp. 69-74)
  14. APPENDIX B A Note on Transaction and Administrative Costs
    (pp. 75-80)
  15. APPENDIX C Cost of Connectivity
    (pp. 81-88)
  16. Bibliography
    (pp. 89-94)