The savings promised by advocates of health information technology (HIT)
may materialize for large payers of health care after widespread adoption by
physicians and hospitals. However, individual doctors will likely suffer
long-term net losses along the way, according to some health care financing
Unless policymakers address physicians' concerns about the costs,
technological compatibility and the legal exposure they face in adopting
health care technology, the large savings that federal, state, and local
governments and other large payers of health care expect as the end product
may take a long time to appear, according to health policy experts and a
report by the Congressional Budget Office (CBO) released in May.
An increasing amount of research has indicated that large-scale public and
private health systems have had less expensive and improved patient care from
the use of computer-assisted medicine. But individual hospitals and clinicians
that have started to implement HIT—such as electronic health records
(EHRs)—have seen less benefit, which is a likely reason relatively few
have adopted comprehensive HIT systems, according to the CBO report.
"Office-based physicians in particular may see no benefit if they
purchase such a product—and may even suffer financial harm,"
concluded the report's authors. "Even though the use of health IT could
generate cost savings for the health system at large that might offset the
cost of a EHR system, many physicians might not be able to reduce their office
expenses or increase their revenue sufficiently to pay for it."
Widespread use of HIT tools, such as EHR systems that provide notification
to avoid duplicate tests on the same patient, could provide up to $80 billion
in net annual savings, according to a recent RAND report. But most expected
savings would not benefit clinicians.
Clinicians would have to bear substantial costs for HIT systems. A 2005
report by David Gans and others published in Health Affairs estimated
that the total price tag for office-based EHRs can typically range from about
$25,000 to $45,000 per physician. The annual costs for operating and
maintaining the system, which includes services such as maintenance and
technical support, range from about $3,000 to $9,000 per physician per year,
according to another 2005 survey by Robert Miller and others published in
The research indicates that smaller groups of physicians typically pay more
per physician to implement HIT systems than larger offices.
"Significant financial benefits [from HIT adoption] will never flow
to individual doctors and hospitals," said Peter Orszag, director of the
CBO, at a June briefing before Congressional staff.
Although HIT adoption will have large costs for many physicians, the CBO
noted in its report that those costs for physicians are somewhat lessened by
the fact that nearly all clinicians already have much of the hardware
necessary to operate a HIT system and need only the software.
Even limiting HIT to software can become expensive, according to Janet
Wright, M.D., a cardiologist and vice president for Science and Quality at the
American College of Cardiology. Physicians not only have to buy replacement
systems when a HIT software provider goes out of business, but they have to
fund expensive transfers of data to a new system.
Even worse than the cost of transferring data is discovering that data in a
defunct vendor's program cannot be transferred to a new program because of
"We've learned that platforms have to be flexible and accept data
quickly," Wright said.
Another cost to physicians is the drop in productivity as they learn how to
use the system and adjust the ways in which they practice. The 2005 Miller
survey of HIT adoption among physicians found an average drop in revenue of
$7,500 per physician during a months-long implementation period from loss of
productivity related to training.
Convincing more physicians to adopt HIT systems may be facilitated by
educating them about the potential cost savings. Savings could stem from
reducing the pulling of paper charts and the use of transcription services in
larger practices. Savings also could be gained from the use of templates that
can significantly reduce the amount of time spent on regular activities, such
as typing in notes and ordering medications, according to the CBO.
Sara Rosenbaum, chair of the Department of Health Policy at George
Washington University, said Congress can overcome physician reluctance to
adopt health technology if it effectively addresses the increased cost for
clinicians, the lack of national physician HIT standards to improve
interoperability, and the legal vulnerabilities the technology creates for
In a survey she conducted of physicians on health technology, Rosenbaum
found that clinicians who had not yet adopted the technology were much more
focused on potential legal liabilities that could arise from the exposure of
their practices' statistics on health outcomes, which could come from their
use of digital records (see
FIG1). The survey results were
published online in the June 18 New England Journal of Medicine in
the report "Electronic Health Records in Ambulatory Care—A
National Survey of Physicians."
Physicians would be more likely to adopt HIT systems if the liabilities for
not adopting them were perceived to be greater than the liabilities they may
face by adopting them, Rosenbaum said.
Congress has made little progress to date on legislation promoting
comprehensive HIT adoption, although it recently began to advance legislation
under consideration since 2005 to encourage the adoption of EHRs. The fate of
the legislation (S 1693) still appears uncertain because of differences over
how much control patients should have over their records.
Broader clinician and hospital adoption of HIT would require a system of
rewards and penalties for health care professionals, according to Orszag and
others. Widespread adoption of HIT systems could be spurred by subsidies to
help with adoption of new technologies, penalties for failing to use a HIT
system, and a legal requirement that clinicians use a HIT system.
The CBO report concluded that the federal government could spur HIT
adoption by subsidizing physicians or by requiring them to purchase health
technology. Among the possible approaches the report cited was having Medicare
pay an additional amount per billed service to health care professionals who
used EHRs or limiting Medicare participation to clinicians who use EHRs.
"If policymakers are interested in promoting health IT, some version
of a requirement or an explicit or implicit penalty for providers who fail to
adopt health IT is likely to be more cost-effective for the federal government
than a subsidy," said the report.