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Does Health IT Reduce Costs or Not?

Last week, Health Affairs published a study by Danny McCormick, David H. Bor, Stephanie Woolhandler, and David U. Himmelstein entitled “Giving Office-Based Physicians Electronic Access to Patients’ Prior Imaging and Lab Test Results Did Not Deter Ordering of Tests.” Some commenters interpreted this to mean “electronic health records increase health care costs.”

As a result of this article and subsequent responses, BPC is being asked: isn’t health IT supposed to reduce costs? Does this study raise questions about the value of health IT—a premise upon which so many policy decisions have been made?

According to the study, doctors with computerized access to imaging results ordered tests on 18 percent of visits, while those without such access ordered tests on 12.9 percent of visits. The electronic availability of lab test results was also associated with ordering of two additional blood tests. The study was based on an analysis of 1,187 office-based physicians included in the 2008 National Ambulatory Medical Care Survey (NAMCS).

Does an increase in tests ordered mean that HIT does not in fact reduce costs? There are four important things to consider when reviewing the results of the study.

An Increase in Tests Alone is Not the Right Measure for Cost-Effective Care.

Electronic health records (EHRs) provide clinicians access to important information about a patient’s medical history at the point of care. The ability, for example, to see which tests have been performed on a patient, as well as the results, enables providers to avoid ordering unnecessary or redundant tests and to spot gaps in care. EHRs arm clinicians with information to make smart and more informed decisions about diagnostic testing for their patients.

So, why did the IT-using physicians in this study order more lab tests? The study does not reveal the clinical necessity of the additional tests. It may be that the IT-using physicians were more aware of tests that should have been ordered but were not. For instance, colon cancer screening is only performed on 56 percent of adults age 50 and over.* Interoperable EHRs help to address these gaps in care—failing to do so can drive up health care costs.

Simply “Reviewing Test Results” Electronically Does Not Provide the Context Needed to Reduce Costs or Improve Quality.

The promise of health IT lies not just in providing test results electronically but in providing other robust capabilities that support high quality, cost-effective care. These capabilities include decision support, which help clinicians determine the clinical necessity of diagnostic tests. Another capability is health information exchange, which gives clinicians access to data about a patient (such as imaging and lab tests performed) that resides at a different health care setting.

Even today, there is still very little clinical decision support and health information exchange, and in 2008—the year on which the study is based—there was virtually none. This means that physicians in the study who simply reviewed results electronically did not have all of the tools available today. This will change as more clinicians respond to the Medicare and Medicaid EHR Incentive Program—or “Meaningful Use”—which requires increased use of clinical decision support and health information exchange. Our recently released BPC report, Transforming Health Care: The Role of Health IT, recommends that future Meaningful Use requirements include more robust requirements for health information exchange and clinical decision support.

The Evidence Overwhelmingly Supports the Fact That EHRs Can and Do Save Money.

Any study should be viewed in context, and this is no exception. In 2011, Health Affairs also published a comprehensive review of the literature associated with health IT’s effects on quality, efficiency and provider satisfaction outcomes. This review indicated that 92 percent of more than 100 recent articles published on health IT reached conclusions that were positive overall, with limited negative results.** Such positive overall results included those related to efficiency of care, effectiveness of care, provider satisfaction, patient safety, patient satisfaction, and care process.

EHRs Alone Don’t Solve the Problem.

As noted in BPC’s recently released report, EHRs alone cannot solve the enormous challenges associated with health care cost and quality. The U.S. health care system largely rewards volume over value. In other words, there are few financial incentives to reduce the number of tests performed, regardless of what tools are used to identify which tests should be ordered. Interoperable EHRs, along with robust electronic exchange of information across systems, can raise awareness of gaps in care and redundancies in tests that contribute to rising costs within the health care system. To truly address challenges associated with uneven quality and rising costs, public and private sector purchasers and health plans must align incentives and payment with higher quality, more cost-effective care, enabled by new delivery models that promote more coordination of care and accountability. This is one of the most significant recommendations in BPC’s report.

So, What Is The Takeaway?

From a policy perspective, there are at least two important lessons:

  1. First, EHRs, operating alone, were never designed to address the current challenges around cost and quality in the U.S. health care system. Payment reform—aligning incentives with improvements and outcomes in both cost and quality—are needed, along with delivery system reforms, which promote coordinated, accountable, patient-centered care (enabled by health IT). Policy change in these two areas will—by far— make the most impact in addressing the challenges in U.S. health care. Importantly, such payment and delivery system reforms are not possible without the use of robust, interoperable EHRs and health IT.
  2. Second, continuing—and indeed extending—programs that promote the development and use of EHRs with robust functionality (such as Meaningful Use and related programs)—is imperative. Meaningful Use and the related standards and certification programs in Stage 2 (which is currently under review) should significantly expand requirements associated with robust, bi-directional exchange, offering clinicians the ability to both access (query) and “push” test results and other important clinical information using health IT. They should also promote and support more clinical decision support. Other public sector and private sector programs should follow suit.

* Agency for Healthcare Research and Quality. (2011). 2010 National Healthcare Quality Report. AHRQ Publication No. 11-0004. Accessed March 10, 2012. ** Buntin, MB, Burke M, Hoaglin M, and Blumenthal D. (2011). The benefits of health information technology: a review of the recent literature shows predominantly positive results. Health Affairs 30. No. 3 (2011): 464-471.

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