A report from the Congressional Budget Office casts doubt on previous studies of substantial cost savings from widespread use of health information technology, particularly electronic health records. The report could influence prospects for congressional approval of I.T. legislation. The CBO report takes issue with previous studies particularly those from the RAND Corp. and the Center for Information Technology Leadership that forecast huge financial savings if providers widely adopted I.T. and used it appropriately.
Neither the RAND nor the CITL study, however, is an appropriate guide to the budgetary effects of legislative proposals aimed at increasing the use of health I.T.,î according to the CBO report. For example, both studies attempt to measure the potential impact of widespread adoption of health I.T., not the likely impact; a CBO cost estimate, by contrast, would estimate the likely effect.
In particular, CBO questioned the RAND study that was based solely on empirical studies from the literature that found positive effects for the implementation of health I.T. systems.
RAND researchers did not consider evidence of negative or no financial effect of I.T. adoption on the belief that adverse effects were attributable to ineffective or not-yet-effective implementation, CBO noted. Consequently, CBO concluded, ìthe decision to ignore evidence of zero or negative net savings clearly biases possibly quite substantially any estimate of the actual impact of health I.T. on spending.
Further, whatever net savings may accrue to the industry, the effect on the federal budget will be far smaller, according to CBO. Medicare and the federal share of Medicaid together account for only about one-fourth of total spending for health care services, the report states. Moreover, some types of savings, such as those from improved efficiency within a physicians office, could not be realized by Medicare without revising payment rates to physicians, which usually requires legislation.
In the report, CBO acknowledges that health I.T. has promise to reduce health care costs, but claims it is not a panacea. Research indicates that in certain settings, health I.T. appears to make it easier to reduce health spending if other steps in the broader health care system are also taken to alter incentives to promote savings. By itself, the adoption of more health I.T. is generally not sufficient to produce significant cost savings.
Text of the CBO report, Evidence on the Costs and Benefits of Health Information Technology, is available at cbo.gov.
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