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4/8/2010
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VA Health IT Generates $3 Billion Savings

Over a 10-year period, the VA lowered costs while improving healthcare quality because of its health IT investments, says a research group..

During the decade 1997 to 2007, the Department of Veterans Affairs spent $4 billion on health IT investments and saved more than $7 billion over the same period, a new study finds.

The study reported that the VA's use of technology lowered costs by a net of $3.09 billion, while improving quality, safety, and patient satisfaction. It was conducted by members of the Center for Information Technology Leadership, a Charlestown, Mass. academic research organization that assesses the impact of health information technologies.

"VA has seen its investment in health information technology pay off for veterans and taxpayers for many years, and this study provides positive evidence for this correlation," said secretary of veterans affairs Eric Shinseki. "The benefits have exceeded costs, proving that the implementation of secure, efficient systems of electronic records is a good ideal for all our citizens."

Technology that eliminated duplicate tests and reduced medical errors accounted for more than 86% of the department's savings. Lower operating expenses and reduced workloads accounted for all other savings.

During the last two decades, the VA has adopted a full range of health IT to address patient care including computerized patient records, bar-coded medications, radiological imaging, and laboratory and medication ordering.

According to the study's authors, the findings "serve as a framework to inform efforts to measure and calculate the benefits of federal health IT stimulus programs."

The authors also note that "this analysis is the first to examine the potential value of long-term investments in several health IT applications across settings in the VA. Our findings suggest that the VA's investment in the Veterans Health Information Systems and Technology Architecture is associated with significant value through reductions in unnecessary and redundant care, process efficiencies, and improvements in care quality. We conservatively estimate that the VA's investments in the four health IT systems studied yielded $3.09 billion in cumulative benefits net of investment costs by 2007." In addition to savings, the study also found that technology has helped VA patients meet clinical guidelines through the use of electronic medical records and computerized physician alerts.

The study selected diabetes as a focus of quality to measure the approximately 25% of VA patients who have diabetes. When compared to Medicare's private-sector benchmark, the results showed that VA patients with diabetes had better glucose testing compliance and control, better controlled cholesterol, and more timely retinal exams. Retinal damage can be caused by diabetes. The VA averaged about 15 percentage points higher than the private sector on preventative care for patients with diabetes.

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