On HIT Cost Savings

Real or Imagined SolutionsUS Capitol

According to David M. Cutler, of the Center for American Progress Fund [CAPF] on May 11, 2009, health care will be the major challenge to the federal budget in coming decades. Rising health costs will account for nearly all of the expected increase in government spending relative to gross domestic product [GDP].

Healthcare Costs and GDP

Health care currently accounts for 16 percent of domestic GDP, and that share is forecast to nearly double in the next quarter century. Spending money on health care is not bad, but wasting money is very bad.

Link: http://www.americanprogressaction.org/issues/2009/05/health_modernization.htmlHIT

HIT to the Rescue

But, $600 billion might be saved over the next ten years, and $9 trillion saved over the next 25 years, if HIT initiatives are used; says the CAPF.


Estimates suggest that a third or more of medical spending—perhaps $700 billion per year—is not known to be worth the cost. Wasting hundreds of billions of dollars on inefficient health care is a luxury the country cannot afford.


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3 Responses

  1. For the last 30 years, hospital information systems (HISs) have steadily grown in popularity. At present, nearly every acute care hospital in the United States has at least some form of HIS; at a minimum performing administrative tasks such as patient billing, payer accounting, and employee payroll tracking.

    Depending on the size of the hospital, an information system may initially cost from several hundred thousand dollars to tens of millions of dollars. In 2004, for example, about $25.8 billion was spent on hospital information technology (IT) in the United States. The amount today is far more! Consequently, it is critical that such a system produce a positive return on investment (ROI) through patient care quality improvements, increases in organizational efficiency, or enhanced negotiating power with third-party payers and other stakeholders.

    And; the Obama administration; ups-the-ante [even more].

    Some HIS projects, especially more complex undertakings, have been clear failures to the extent that the organization had to abandon the new HIS in favor of the previous manual system.

    Thus, the goal on this ME-P and elsewhere [CCHIT, etc] should be to illustrate how hospitals can maximize their chances for successful implementations of HIS while at the same time providing a positive ROI.

    Richard J. Mata; MD, MIS


  2. Well done Dr. Mata,

    I remember a few decades ago when the Medicare prospective payment system was first being phase in at our hospital [DRGs]. The hospital administrator reminded us that while physician salaries make up only a small portion of healthcare costs [20% today], the decisions by physicians, like which medications, procedures, interventions and tests to order, etc, account for more than 80% of costs; leading to the aphorism “the doctor’s pen is the most expensive piece of healthcare equipment.”

    Of course, in the future it will be “physician’s keyboard,” CPOE, iPhone app, cloud configuration, or other technology, etc. Thus, it seem like the more things change, the more they remain the same. I hope we never forget this “law.”

    Dr. D. Edward Robinson; Jr.


  3. HIT costs, profits and consequences
    “Hospitals Must Decide on Most Effective IT Spend as Costs Add Up”
    By Gregory A. Freeman for HealthLeaders Media, November 27, 2017.
    “62 Indiana hospitals named in $300 million fraud suit over EHR kickbacks”
    By Beth Jones Sanborn for HealthCare IT News, November 27, 2017

    Darrell Pruitt DDS


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