Health Affairs, 24, no. 5 (2005): 1102 doi: 10.1377/hlthaff.24.5.1102 © 2005 by Project HOPE	New Online   Pay Cuts For Medicare Docs   Access To Care Woes   Public Coverage More Efficient   Empowering Consumers

This Article Extract Reprint (PDF) Submit a response to this article Alert me when this article is cited Alert me when eLetters are posted Alert me if a correction is posted Services E-mail this article to a friend Similar articles in this journal Alert me to new issues of the journal Add to My Personal Archive Download to Citation Manager Reprints & Permissions Citing Articles Citing Articles via Google Scholar Google Scholar Search for Related Content

Economics Of Health Information Technology

PROLOGUE

The Economics Of Health Information Technology

The first group of papers in this special issue of Health Affairs explore the economic interactions that ultimately connect the parties in this wilderness. While visions of a fully wired health system often emphasize HIT’s potential for simplifying the typical medical encounter, though, the realities of implementation offer no immediate escape from the system’s besetting sins of fragmentation and hypercomplexity. Richard Hillestad and colleagues at RAND estimate current adoption levels, the likely cost of full adoption, and the net potential savings from both increased efficiency and the value of patient safety and health gains. But critiques by James Walker, David Himmelstein and Steffie Woolhandler, and Clifford Goodman warn that the realities of health care practice and economics may swamp the RAND authors’ sophisticated modeling exercise. "What reason do we have to think that the care processes in thousands of hospitals and practices will be skillfully redesigned and supported by an [electronic medical record] that has been carefully configured and tested to support those processes?" Walker asks.

Next, Robert Miller and colleagues take a close look at the actual costs and benefits that a sampling of physician practices has experienced with HIT adoption. Their fascinating field study hints at the surprises that are in store for theorists in the real world as health care system gets wired. Even these relatively small practices presumed to be furthest behind the adoption curve may realize savings in unexpectedly short order. But quality improvement does not figure prominently among the benefits gained, and the provider revenue enhancements detailed by Miller and colleagues could have troubling implications for payers.

Finally, Sheera Rosenfeld and colleagues at Avalere Health present a rational scenario for how Medicare might speed HIT adoption by physicians, who represent the information infrastructure’s most difficult frontier. The intuitive appeal of a reimbursement-based approach to financing physician IT is substantial, since it builds a link between cash-strapped providers and payers who stand to benefit most in the long run from both the health and efficiency gains realized as a result of HIT. The key, these authors argue, is to structure Medicare payments so that they lead to standardized and interoperable systems that achieve the program’s objectives within a realistic budgetary framework. There are no easy fixes here.

                      What's this?