Computers Aren’t Saving Hospitals Money — Report
Computerization has been a promised cost-saver for hospitals, but is it?
It’s long been known in IT circles that digitizing medical records saves money, reduces errors and speeds treatment when every second counts.
But that may be hype from a bruised industry that reached its cultural and corporate pinnacle a decade ago.
Harvard researchers say computerization hasn’t made medicine cheaper nor more efficient. True or not, the report comes at an unfortunate time for President Obama and his health care reform push because backers say the cost of reform can be somewhat muted by savings from modernization.
The report’s lead author, Dr. David Himmelstein, associate professor at Harvard Medical School and former director of clinical computing at Cambridge Hospital in Massachusetts, says hospital computerization “hasn’t saved a dime.” Nor has it helped administrative efficiency.
Four thousand hospitals were monitored from 2003 to 2007. Among the facilities were those considered the most highly digitized. Two reasons for the finding could be:
* The sheer cost of installing and running the systems
* More software has been created for admins compared to that for clinicians
Dr. Himmelstein’s team said there was no cumulative or delayed benefit, either, as might otherwise be expected when large new information systems are deployed. It is not uncommon for such efforts to pay for themselves incrementally over time.
In fact, the study found that hospitals computerizing the fastest reported the largest increases in administrative costs compared to their peers in the survey.
Dr. Steffie Woolhandler, professor of medicine at Harvard and study co-author, suggests that health care reform advocates look at the Veterans Administration.
The VA has seen significant improvement in care and quality ratings, says Dr. Woolhandler, largely by creating a global budget for the agency. That slashes billing and accounting costs, and, in turn, freeing health care workers to pay more attention to patients.
Another way to describe the VA’s system is single-payer. The organization pushing the report, Physicians for a National Health Care Program, is a group of 17,000 physicians advocating for a single-payer system.
The study’s title is, “Hospital Computing and the Costs and Quality of Care: A National Study”. A summary of the findings are on The American Journal of Medicine’s site.
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This is hard to believe, but the VA is saving as you say, and I take some comfort as a vet knowing that the VA system is connected, a VA hospital on the other end of the country has the same info as my hometown- and thats what they really need but they will resist this information sharing because every hospital wants to bill to capacity. The business culture is that the machinary is here, so lets use the capacity and make more money!
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As a computer professional, I can tell you that up until the mid-90’s computerization never saved anybody a cent. But once the benefits kicked in, they kicked in bigtime, and the savings rapidly accelerated. You can trace the predominance of several major national businesses to the mid-90s when the trendlines crossed and those who exploited the technology started to have a huge competitive advantage. Up until that point, similar studies to the one you cite would have been true, but would have completely missed the point.
I have no dog in this fight. I know that business success never can be attributed to any one or two factors any more than you can say the lighting or the score makes “The Godfather” the best US movie ever made.
Having reported on information technology for about a decade, my impression is that IT promise usually falls short of IT performance.
It’s:
In response to another comment. See in context »* Oversold by developers
* Over promised by vendors
* Overhyped by analysts with conflicts of interest
* Overbought by companies
* Under deployed by consultants and
* Under examined by CEOs who can’t take back the money they paid for the systems
Yes, 6 times. IT is poorly understood by customers, and the business model of providing software drives prices higher than the content merits.
In response to another comment. See in context »The story of Wal-Mart is the story of e-commerce and data mining in transforming the supply chain. These kinds of gains can be made in improving the efficiency of delivering health care services, though the savings won’t be overnight- it’ll take years to break even, but it’ll be the only way out of the ongoing cost inflation we see in these services.