Can information technology transform healthcare?

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A two-year study of information technology in the U.S. healthcare industry found that electronic record systems could prevent 2.2 million adverse drug events, 400,000 deaths, and 40 million missed workdays.

Richard Hillestad, Ph.D, senior principal researcher and professor of policy analysis at the Pardee RAND Graduate School, presented the results of the study this week’s Health Information Technology (HIT) Symposium at MIT in Cambridge, Mass. The study was completed in spring of 2005 and was funded by Cerner Corp., GE Healthcare, Hewlett-Packard, Johnson & Johnson, and Xerox.

Recommended care is provided only about 55 percent of the time, Hillestad said. Only 20 and 25 percent of hospitals use electronic record systems and only 10 and 15 percent of physician practices use them. The study estimated costs of $120 billion—a modest amount when compared to potential savings. The study estimated $630 billion in efficiency savings. And because the chronically ill absorb about 75 percent of national health expenditure, the RAND study found that electronic records-enabled prevention and disease management can reduce mortality and the economic impact of chronic illnesses.

With all the potential benefits, why aren’t more providers using electronic records? Because they don’t see the most savings from EMR investments, according to RAND researchers. Providers have little incentive or capability to institute standards-based, interconnected EMR systems, Hillestad said. “The current adoption process may lead to a two-tiered healthcare system and inhibit future change.” The government should intervene now, he said. “The government is the largest employer and healthcare payer and has considerable leverage on the industry. Government could promote standards and certification, support implementation, promote interoperability and regional connectivity, and provide leadership with Medicare incentives.