Obama’s Assumptions Related to Health Care IT Investment

I’ve been thinking a lot about the legislation that’s about to hit the fan in regards to investment in healthcare IT and in particular EHR and EMR softare. My biggest fear in this whole process is that the underlying assumptions being made will turn out to be wrong.

The following is a list of assumptions I’ve seen made in regards to the government’s investment in healthcare IT and EHR and its possible benefits. I’ll also offer a few comments on each assumption for people to consider.

Cost savings – The largest savings I’ve seen a medical practice receive from EHR implementation is in saved transcription costs. There’s some small savings from charting supplies and the like. Otherwise, where are the cost savings occurring? My guess is that if you polled those using an EHR you’d find very few cost savings. You would however find a number of new costs related to investment in technology. There must be some long term cost savings that the government sees that I’m missing.

Cut waste – I guess this has some minimal “Green” benefit. It just seems rather minimal to me.

Reduce the need to repeat expensive medical tests – I can’t wait for this benefit to be realized. Unfortunately, I’m afraid that the technology and more significantly the policies are in place to make this happen. Long term this benefit will be awesome, but we’re so far from realizing it that it’s hard for me to use this as a strong justification for the investment.

Save jobs – Health care has been relatively immune to lost jobs, but this investment will help save some jobs. We’ll just have to see if the money ends up going to big EHR companies who will just get richer in the process or whether this investment will do something significant in regards to saving and creating jobs.

Save lives by reducing the deadly but preventable medical errors that pervade our health care system – I’ve seen far too many research articles on both sides of this argument. Some say it helps prevent medical errors and others suggest that it may cause other errors. I’m not sure which way to think on this. In a perfect world it would certainly prevent medical errors. Unfortunately, a computer can only think so much. I’m afraid that an EHR isn’t the secret elixir we’d all hoped to use to solve medical errors.

I’m sure that I’ve missed other reasons. Feel free to add comments and other reasons I’ve missed in the comments.

I think I better work on a follow up article on the reasons why Obama should invest in health care IT. I think there are good reasons to invest in this area. Otherwise, I wouldn’t be writing about the subject. However, I think it’s interesting and valuable to have a realistic picture of why EHR implementation is important. I really am an EHR and EMR optimist.

About the author

John Lynn

John Lynn

John Lynn is the Founder of the HealthcareScene.com, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference, EXPO.health, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.

10 Comments

  • Cost savings – no paper to buy, store, archive or secure

    Longevity and transportability of medical records and claims handling will also save a ton of money over time.

  • In Europe (very pro-Obama) there is a tendency on accepting things as “good” if Obama says so. So this kind of plans will help not only American people, but indirectly European people too

  • Eric,
    I think it’s a false assumption to say that you’ll have no paper to buy. You’ll still be printing a lot of things out of your EMR for the forseeable future. e-Prescribing, fax servers and records on disc are all good movements to save on the cost of paper. However, that’s still a ways off for most and even with all of those great paper savers, there’s still quite a bit of paper being printed.

    The archiving and storage cost savings are big and important. Thanks for reminding me of those.

    Maybe you’ve seen different, but it seems to me that the insurance companies claim the most benefits from improved claims handling. Doctors can receive some benefit if done right, but not as much as the insurance companies.

  • yampeku,
    Interesting to hear about the European perspective. I don’t know the raw numbers, but I have a feeling that the US could follow many other countries in getting broader EMR adoption.

    Either way, I think we should all help each other. This shouldn’t be a nationalistic sort of change.

  • Their estimating $18 billion with just the HITECH Act EHR stimulus package. Will be a much larger number when considering planned investment in Health Care overall.

  • EMRs was a career choice for me since I graduated from college. After 10 years working at various hospitals nationwide, I agree that the change will come to healthcare once EMRs are implemented. The many improvements outlined by many of you make it clear that the need is evident. While I agree with President Obama’s point to improve healthcare with the use of EMRs, there is a greater need for hospitals to improve their business operations.
    Too many times, hospitals do not have leadership in place with a firm understanding of ROI and other basic business models to be successful. While the abuse of funds may not be as high as the financial industry, the lack of knowledge in managing funds is questionable for many healthcare organizations where physicians and nurses move through the ranks to become members of leaderships, but they do not have a busines administration background to support major implementations. If this area is left unchecked, we will be presented with another set of issues in healthcare that has long gone unnoticed.

  • One of the biggest savings we realized was a reduction in turnaround time for billing. Because we did not have to deal with the long process associated with paper billing and code checking we shortened the time on E&M billing from about a week or more to a few days. Surgery billing was taking weeks and now it is at about a week only because we require the surgeon to document and code what he did.

    I also agree that it did not save in paper costs and I do not believe (from our practice experience) that it ever will.

    The bottom line for us was that it made an otherwise very inefficient operation more efficient in terms of time spent toward improving overall patient care. (managing phone calls, appointments, tests, patient notes are all in one place and documented)

  • Cyndee,
    That’s another good reason to implement. This can definitely be true if it’s done right. Always better to have the reimbursement back as fast as possible.

    I agree that I’ve seen the benefit of efficiency in operation. The biggest problem is that it’s more difficult to measure and compare.

  • […] One particularly attractive technological advance is the ability to replace paper patient files with electronic health records (EHRs). Over the past several years US political leaders have espoused the efficiencies and subsequent savings that could be achieved in the US healthcare system through the adoption of this technology. One study suggests that savings from such systems could average more than $77 billion per year. Given the magnitude of these savings together with national debt concerns, then Senator from New York Hillary Clinton and former Speaker of the House Newt Gingrich, in a surprising example of bipartisanship, held a joint press conference in May 2005 calling for more federal efforts to spark the use of such tools. Four years later, President Obama signed The American Recovery and Reinvestment Act of 2009 which, among other things, allocated $59 billion for health care. Approximately $20 billion of this sum was designated for EHR adoption (see Obama’s Assumptions Related to Healthcare IT Investment). […]

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