Study Says Hospital EMRs Don’t Save Money

By November 25, 2009Commentary

More extensive use of health information technology is being advocated by just about everyone, largely on the basis that it will improve efficiency, lower costs and improve quality.  It was for these reasons that the stimulus bill included $20 billion to encourage physicians and hospitals to adopt electronic record systems.  Yet research into the use of these systems rarely finds significant savings or better quality, at least in the near term.  Harvard researchers have published a new study examining hospital IT use in the American Journal of Medicine.  (AJM Study)

The researchers compared HIMSS survey results of hospital computerization level with Medicare cost and spending reports and some Dartmouth Atlas work on spending and quality.  They found no decrease in overall administrative costs associated with more computerization and only a slight increase in a limited number of quality ratings.  Administrative costs, however, were measured as a percent of revenue and on an aggregate basis.  A better analysis would be to look at the impact of computerization of a specific function on the cost for that function.  Looking at overall administrative costs to some extent only tells you what portion of their revenue hospitals are willing to devote overall to administration.  If spending in one area goes down, it will likely go up in another.

It should be noted that the primary authors of this study are strong advocates of a national single-payer system, advocacy which at times may color their research.  Their intent in this study is likely to say health IT won’t achieve reform goals, you need a single-payer system.  Notwithstanding their potential bias, their research results are consistent with other studies showing a limited effect of IT on cost or quality of care.  It doesn’t mean having electronic records isn’t a good idea, it probably is, but expectations should be lowered about how much of a benefit they will create and how quickly.

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