Public health journal Health Affairs recently released findings of the VA study, conducted by the Center for Information Technology Leadership, a Charlestown, Mass. academic research organization that assesses the impact of health IT, that found that from 1997 to 2007 the agency spent $4 billion on health IT, but achieved savings of $7 billion.
The VA's net savings of $3 billion was achieved in large part by a reduction of medical errors and elimination of redundant testing, but also through workflow improvements and lower operating expenses.
The VA has been using health IT systems for more than 20 years, but ramped up investment in and adoption of its Veterans Health Information Systems and Technology Architecture, or VistA, over the last 10 to 15 years. From 1997 to 2007, through a series of initiatives the VA spent about $4 billion to roll out to VA healthcare facilities VistA components, which include e-health records, digital radiological imaging, electronic medication and lab test ordering, and administration systems.
By contrast, during that same time frame, health IT adoption in the private sector lagged significantly, with deployment of e-medical records and other related systems by U.S. hospitals and doctors estimated to be in the single to low-double-digit percentages.
But, since the passage in February 2009 of the American Recovery and Reinvestment Act's HITECH provisions that will offer more than $20 billion in financial incentives to healthcare providers who use health IT meaningfully, adoption of e-health records and other health IT is being buoyed.
In the meantime, studies by other researchers -- including a recent Harvard report, also published by Health Affairs -- have found the cost savings and other benefits from health IT in the private sector so far have been minimal.
But even those studies -- as well as the recent study of the VA -- suggest that the biggest bang in savings from health IT comes when a tipping point occurs in mass adoption of those systems, widespread use of the technology, and information sharing.
"The issue is there's a necessary threshold of adoption and information exchange that needs to be met before real benefits are realized," said Dr. Stephen Ondra, a senior advisor for health affairs at the VA in an interview with InformationWeek.
A goal of HITECH is to have a majority of U.S. healthcare providers using health IT meaningfully by 2015. Once a "threshold" or tipping point of mass adoption is met, along with faithful use of the technologies and adherence to standards-based data exchange is achieved, Ondra said he's confident the private sector will also realize cost and quality improvements akin to what the VA has accomplished with VistA.
Ondra, however, points out that the business models of healthcare providers in the private sector, whether they are large integrated delivery systems or smaller fee-for-service practices, differ somewhat from the VA's business model. Yet, "each entity needs to look for return on investment calculations that fit their model," he said.
Besides the private healthcare sector needing to be patient over time while striving for ROI in health IT, healthcare providers also need to be mindful of the change management that's important when deploying these systems, said Ondra.
"Acceptance and use of these systems is part of reaching the threshold," he said. Healthcare providers need to choose systems that "fit into workflow" or else the systems risk being underutilized by clinicians.
Finally, in addition to private healthcare providers evaluating health IT systems to help them meet the federal government's short-term meaningful use requirements, doctors and hospitals have to keep an eye on the bigger picture, advises Ondra.
"When looking at IT systems, make sure they meet meaningful use [criteria] now and are also positioned for health information exchange in the future."