Health care industry could save $81B a year with e-records, study says

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September 19, 2005 (Computerworld) -- Digitizing medical records in the U.S. could save the health care industry as much as $81 billion a year and help medical practitioners avoid mistakes, according to a study released last week by the Rand Corp.
The study found that electronic medical records systems save money by reducing redundant care, speeding patient treatment and improving safety.
"Our findings strongly suggest that it is time for the government and others who pay for health care to aggressively promote health information technology," said Richard Hillestad, a RAND senior management scientist who led the two-year study.
The study also indicated that if the efficiency of the nation's health care system increased by just 1.5% a year -- the same level of increased efficiency brought about in the wholesale and retail industries through the use of technology -- annual savings could be as high as $346 billion.
The Rand study said installing electronic medical records systems would cost U.S. hospitals about $98 billion and physicians about $17 billion -- an average of $7.7 billion per year over a 15-year adoption period. However, replacing paper records with electronic tools would likely more than offset those upfront costs.
Already, some medical centers are making a move to digital systems. St. Joseph's Hospital Health Center, a 430-bed facility with 6,000 employees in Syracuse, N.Y., announced today that it will move from a manual records and radiological imaging system to a digital records and storage system. The move, aimed at boosting efficiency and speed, as well as allowing expanded access to records and radiology charts, will cut its storage systems total cost of ownership in half.
St. Joseph's is implementing the project over the next 30 days. Officials said the picture archiving and communications system (PACS) and the multitiered storage system supporting it will allow physicians and lab technicians to access patient information, data and X-rays in seconds from on-site and remote locations via a Web portal. The all-IBM storage system is expected to double overall performance and increase scalability five-fold.
"In health care, every IT dollar we spend is based on some clinical need, whether it's to allow a physician to practice more efficiently or to improve the quality of patient care," said Christopher Ryan, manager of IT at St. Joseph's. "The ability to have images available without having to store and retrieve film is the biggest impact from this project."
Ryan is replacing a single, outdated midrange EMC Clariion FC4700 storage array with a tiered storage-area network (SAN) built around a high-end IBM Enterprise Storage Server for primary storage, a midrange DS4300 array for secondary storage and an entry-level DS4100 array for online archival. The entire SAN will provide about 15TB of capacity, Ryan said. An IBM 3584 tape library with five linear tape-open drives will act as the permanent archival for the hospital's records, Ryan said.
"We looked at EMC and HP solutions. It would have been easier to go EMC because we had one in place, but the value add with IBM was its services and support. EMC at the time was outsourcing their service, and this was causing an issue for us," Ryan said.
Ryan also said he was able to extend the life of the health center's IBM AIX servers, which now run patient accounting applications, by three years by attaching them via SCSI to the ESS800 IBM hardware for additional back-end disk space.
Ryan said his SAN and PACS implementation will cost just under $1 million; he expects a return on his investment in about three years. And given the annual data growth rate of 10TB, the SAN will continue to grow with the medical center for at least the next seven years, saving money that might have been needed for future technology outlays.

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