CCHF: Cost Savings from Electronic Health Records Is Hype

Kaye Beach

Oct. 22, 2012

From the Citizens Council for Health Freedom’s Oct. 2012 Newsletter. (If you are not subscribed to this free informative newsletter, you can do so here)


HHS has spent $25 billion of Recovery Act funds on health IT.

A new extensive study on the use of health information technology (IT) shows that the purported cost savings associated with electronic health records (EHR) is more hype than reality. Researchers from McMaster University Medical Center in Hamilton, Ontario, and scholars from other research centers (including U.S.-based centers) poured through almost 36,000 research studies of health IT. They were able to identify 31 that specifically addressed the outcomes of cost savings from health IT. The Wall Street Journal reports:
With a few isolated exceptions, the preponderance of evidence shows that the [health IT] systems had not improved health or saved money.
The authors of “The Economics of Health Information Technology in Medication Management: A Systematic Review of Economic Evaluations” found no evidence from four to five decades of studies that health IT reduces overall health costs. Three studies examined in that McMaster review incorporated the gold standard of evidence: large randomized, controlled trials. They provide the best measure of the effects of health IT systems on total medical costs.
A study from Regenstrief, a leading health IT research center associated with the Indiana University School of Medicine, found that there were no savings, and another from the same center found a significant increase in costs of $2,200 per doctor per year. The third study measured a small and statistically questionable savings of $22 per patient each year.
In short, the most rigorous studies to date contradict the widely broadcast claims that the national investment in health IT – some $1 trillion will be spent, by our estimate – will pay off in reducing medical costs. Those studies that do claim savings rarely include the full cost of installation, training and maintenance – a large chunk of that trillion dollars – for the nation’s nearly 6,000 hospitals and more than 600,000 physicians. But by the time these health-care providers find out that the promised cost savings are an illusion, it will be too late. . . . [All emphasis added.]
As cited above, it is estimated that the United States will spend some $1 trillion on health IT. Billions of dollars from the Recovery Act of 2009 have already been spent on it. The federal government’s Recovery Act-Funded Programs website shows that HHS has spent over $25 billion on health IT as of January 2012. Of that, $20.6 billion was spent on the Medicare and Medicaid EHRs Incentive Program, while another $2 billion was spent on the Office of the National Coordinator for Health Information Technology’s Implementation Plan.
Yet the federal government recently questioned whether now is the time to move forward with regulations for a National Health Information Network. In response to its request, HHS received over 140 comments on the proposed nationwide health information network, according to The article notes that the federal government concluded that “now is not the time, probably, to pursue a regulatory approach that follows what we laid out in the RFI [request for information].” [Emphasis added.]
Furthermore, an analysis of Medicare data by the New York Times says:
The move to electronic health records may be contributing to billions of dollars in higher costs for Medicare, private insurers and patients by making it easier for hospitals and physicians to bill more for their services, whether or not they provide additional care. . . . Regulators say physicians have changed the way they bill for office visits similarly, increasing their payments by billions of dollars as well.
As a result, four committee chairs in the U.S. House have called for the suspension of “meaningful use” incentive payments “until your agency [HHS] promulgates universal interoperable standards” that would “also require a commensurate delay of penalties for providers who choose not to integrate HIT into their practice.” The October 4 letter is signed by Reps. Dave Camp, Fred Upton, Wally Herger, and Joe Pitts.
Americans must demand accountability and corrective action from policymakers for the enormous financial investment in health IT, which has not proven to save money or lives, according to the empirical evidence cited above.

Health Freedom Watch is a monthly email newsletter published by the Citizens’ Council for Health Freedom (formerly Citizens’ Council on Health Care), a national nonprofit, educational organization whose mission is to support patient and doctor freedom, medical innovation and the right to a confidential patient-doctor relationship. Health Freedom Watch provides reports on national and state policies that impact citizens’ freedom to choose their health-care treatments and practitioners, and to maintain their health privacy – including genetic privacy. Citizens’ Council for Health Freedom (CCHF) is not affiliated with any other organization. © Citizens’ Council for Health Freedom.


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