An estimated $156 billion in capital investment and $48 billion in annual
operating costs are necessary to create a model National Health Information
Network (NHIN) in the next five years.
Though expensive, the capital investment figures represent just 2 percent
of annual national health care spending for five years, according to a report
in the August 2 Annals of Internal Medicine by Rainu Kaushal, M.D.,
of the Division of General Internal Medicine at Brigham and Women's Hospital
in Boston, and colleagues.
A panel of 10 information technology leaders in government, industry, and
academia estimated the costs of achieving a model NHIN, defined as the costs
of moving from current levels of investment to a model NHIN in five years.
Costs were estimated for two categories of spending:"
functionality," or the specific functions that participants in
the network need to be able to perform; and "interoperability," or
the ability of separate participants to exchange data with each other
Critical functionalities for physician offices, hospitals, and
skilled-nursing facilities were defined as electronic viewing of lab and test
results, maintenance of electronic health records, computerized physician
order entry, and electronic claims submission and eligibility checks.
To estimate the national costs of achieving interoperability, the panel
used the experience of the Santa Barbara County Data Exchange, a"
brokered peer-to-peer" network of health care providers within
Santa Barbara County, Calif., linked through a central host to allow data
Estimated total costs to achieve functionality of a model NHIN in five
years are $103 billion in capital costs and $27 billion in annual operating
costs. By comparison, the health care industry is currently expected to invest
$24 billion in capital costs and $7 billion in annual operating costs over the
next five years.
Total costs to construct a brokered peer-to-peer communication network
nationwide are projected to be $53 billion in capital investment and $21
billion in annual operating costs.
"If we continue on our current trajectory of IT adoption, the health
care system will spend about one quarter of the costs of the functionalities
of a model NHIN and will probably not even begin to address issues of
interoperability," the investigators stated. "These findings
suggest that policy initiatives are needed if we are to close this
"The Costs of a National Health Information Network" is posted