Savings from IT in Healthcare Environment Questioned by the CBO
The Congressional Budget Office (CBO) published a new report (pdf), “Evidence on the Costs and Benefits of Health Information Technology”, that evaluated the supposed cost benefits associated with the implementation of information technology tools in the healthcare industry. The CBO report is available on the agency website.
In particular, the new government release calls into question the results from previous studies, suggesting that cost savings may be overly inflated. Specific studies cited include works published by the RAND Corporation and the Center for Information Technology Leadership. Those two, along with others, have suggested that widespread implementation and appropriate utilization of healthcare IT will result in dramatic savings across the industry.
The CBO effort considers implementation of health IT programs with funding provided through legislative efforts. An important distinction between the CBO report and other efforts is assessment of impact. CBO researchers focused on “likely” impact, whereas previous groups have considered “potential” impact.
Previous researchers have often not examined potential negative consequences from implementation or those that will not have either positive or negative financial implications. This approach has been employed in other works as any negative effects were chalked up to problems with implementation efforts. The CBO notes that this evaluation approach is simply incomplete.
With respect to savings for the federal government, the CBO report further notes faults with earlier works. For example, dramatic financial implications noted would be less impressive for the Centers for Medicare and Medicaid Services (CMS). This is because only one fourth of healthcare spending is carried by that agency. CMS is additionally limited in potential financial savings because of the current reimbursement schedule. Cost savings would require that this is revised.