The Unfulfilled Promises Of Health Information Technology

A 2005 RAND report predicted that widespread use of electronic health records technology would save the US healthcare system at least $81 billion per year. At the time, the vendor-funded report helped drive substantial growth in the electronic health records industry and probably contributed to the federal government making billions of dollars of incentive payments available to physicians and hospitals to adopt and meaningfully use electronic health record (EHR) systems via the Health Information Technology for Economic and Clinical Health (HITECH) Act.

Realizing that the cost savings and improvements in healthcare delivery are nowhere near what was optimistically predicted in 2005, RAND recently commissioned a new study to take a fresh new look at the state of health information technology.  The new study paints a very different picture and received broad coverage by mainstream news outlets, including “In Second Look, Few Savings From Digital Health Records” by the New York Times in January.

To put it bluntly, the authors of the new report essentially admit that the original RAND study was dead wrong. Healthcare spending has risen by $800 billion since the first report was published, and while much of that is due to an aging population and the increase in overall medical services, there is scant evidence of cost savings due to electronic health records. In addition, there is increasing concern that electronic records have actually made it easier for providers to over-bill for certain services...