Healthcare IT: Savior Or Sinkhole?

Latest RAND report suggests we might be throwing taxpayer dollars away on EHRs and other healthcare IT systems.

Paul Cerrato, Contributor

January 11, 2013

4 Min Read

 7 Big Data Solutions Try To Reshape Healthcare

7 Big Data Solutions Try To Reshape Healthcare

7 Big Data Solutions Try To Reshape Healthcare (click image for larger view and for slideshow)

The Office of the National Coordinator for Health IT (ONC) has done an outstanding job of promoting EHR technology through Meaningful Use financial incentives, and it has fostered a spirit of cooperation among IT stakeholders. But ONC sometimes sounds more like a cheerleader than an objective observer on the extent to which modern informatics can transform healthcare.

The jury's still out. A RAND Corporation report in 2005 predicted that the efficiency and safety improvements made possible with health IT could save the U.S. healthcare system $81 billion a year. Since 2005, however, annual health spending has soared from $2 trillion to $2.8 trillion, and quality and efficiency have improved only marginally, despite an increase in health IT adoption, according to researchers Arthur L. Kellerman and Spencer S. Jones in a newly released RAND study published in Health Affairs.

Kellerman, chair of policy analysis at RAND, and Jones, a RAND information scientist and instructor at Harvard Medical School, lay it on the line: "In our view, health IT's failure to quickly deliver on its promise is not due to its lack of potential but to shortcomings in the design and implementation of health IT systems. ... As a result, we believe that the anticipated productivity gains of health IT are being hindered by the sluggish pace of adoption, the reluctance of many clinicians to invest the considerable time and effort required to master difficult-to-use technology, and the failure of many healthcare systems to implement the process changes required to fully realize health IT's potential."

[ To see how patient engagement can help transform medical care, check out 5 Healthcare Tools To Boost Patient Involvement. ]

ONC recently boasted about paying out $10.3 billion as of December 2012 to more than 180,000 physicians and hospitals to encourage installation of EHR technology and to bolster its meaningful use in patient care. The new RAND report suggests the program isn't exactly generating meaningful savings.

Like many other observers, the RAND scientists spotlight the lack of interoperability among electronic health record systems as a key barrier. One reason: Providers "have little incentive to acquire or develop interoperable health IT systems," the authors say.

In talking with thought leaders and clinicians, I also get the impression that many healthcare providers would rather forego the incentive checks and even cough up the eventual penalty fees than deal with the aggravation of implementing an EHR system.

Although Kellerman and Jones are right to point to poor design and lack of interoperability as obstacles, the other key to turning EHRs (as well as CPOE and clinical decision support systems) into cost-effective tools is to change the healthcare payment model.

Before healthcare providers small and large will see the need for this technology, they'll have to be forced into a pay-for-performance model that requires a lean, mean operational approach to patient care. Once that financial model is fully in place, clinicians will see the value of a computer-assisted system that picks up needlessly duplicative lab tests, life-threatening drug allergies buried in paper medical records, and the like. Because without such a system, all the excessive tests and adverse patient outcomes will come out of their pay checks.

Cathy Schoen of the Commonwealth Fund, a private foundation attempting to improve the U.S. healthcare system's performance, said it best: "When you pay [providers] differently -- especially emphasizing team care -- information systems become critical as they get used in an efficient and effective way, because people want to avoid duplication. ... They want real-time information on where the patient is and what's going wrong."

Health IT doesn't have to be a sinkhole in which we pour billions of dollars. And in fact many individual provider organizations have proved that it can improve quality of care and lower costs. But as a nation, we still fall woefully short of that goal.

Clinical, patient engagement, and consumer apps promise to re-energize healthcare. Also in the new, all-digital Mobile Power issue of InformationWeek Healthcare: Comparative effectiveness research taps the IT toolbox to compare treatments to determine which ones are most effective. (Free registration required.)

About the Author(s)

Paul Cerrato


Paul Cerrato has worked as a healthcare editor and writer for 30 years, including for InformationWeek Healthcare, Contemporary OBGYN, RN magazine and Advancing OBGYN, published by the Yale University School of Medicine. He has been extensively published in business and medical literature, including Business and Health and the Journal of the American Medical Association. He has also lectured at Columbia University's College of Physicians and Surgeons and Westchester Medical Center.

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