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Obama's national health records system will be costly, daunting

But an electronic health records system could save the nation $300B a year

January 20, 2009 12:00 PM ET

Computerworld - President Barack Obama has said that a national electronic health records system will be a priority in his first term, not just for streamlining workflow at hospitals and physician offices but to cut costs and improve the quality of health care.

And while he has pledged to invest $10 billion a year over the next five years on the effort, the price tag for such a system could be closer to $100 billion over the next 10 years, according to experts. They also note that sticking to his five-year timetable could prove to be daunting.

Money for the e-health records (EHR) system would come out of the $825 billion economic stimulus package Obama hopes to push through Congress.

"The magnitude of what we're going to need to do on the Obama scale is just incredible to think about, when you consider linking all these medical records across all these different towns, cities, states," said Dr. Charles O. Frazier, a vice president of clinical innovation at Riverside Health System in Newport News, Va. "We have enough of a problem with that in our own health system."

In 2004, President George W. Bush called for establishing EHRs for most Americans by 2014. Bush created the Office of the National Coordinator (ONC) for Health Information Technology to lead the way. The ONC pushed several pilot projects and created standardized medical records. Even so, a survey of 2,700 U.S. doctors by the New England Journal of Medicine last July showed only 4% were using "fully functional" EHR systems; the rest are all still paper based.

Currently, only 25% to 35% of the nation's 5,000 hospitals use -- or are in the process of rolling out -- computerized order-entry and medical record systems, according to Dr. David Brailer, who served as President Bush's health information czar from 2004 to 2006. Full EHR systems include patient care order-entry systems and networks to share patient data between hospitals, primary care physicians and insurance companies, and to fill pharmacy prescriptions.

"It's a multiyear implementation. Hospitals will have to make a sizable, potentially multihundred-million dollar budget commitments," Brailer said. "But the $100 billion is a one-time cost over the course of a decade. That's in an industry that spends $2.2 trillion a year now and 10 years from now will spend $3.7 trillion per year. So it's a relatively small amount of money."

Brailer said the nation stands to save between $200 billion and $300 billion a year once an EHR system is in place by cutting down on duplications, reducing errors that generate expensive care later, avoiding fraudulent claims and better coordinating care between primary care doctors, hospitals and specialists. The idea is "just to create a more efficient workflow," he said.

Money an issue

To date, getting physicians and hospitals to spend money on EHR systems has been a sticking point.

Charlene Underwood, a member of the board of directors for Chicago-based Healthcare Information and Management Systems Society, said the Bush administration did a good job of getting the infrastructure in place, but "it didn't move the needle forward on adoption."

What's needed now is money for record-keeping technology that doctors and nurses often do not have as well as provide point-of-service technologies, such as notebook tablets for convenient data entry into those EHR systems.



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