A Major Glitch for Digitized Health-Care Records

By Stephen Soumerai and Ross Koppel
The Wall Street Journal, September 17, 2012

In two years, hundreds of thousands of American physicians and thousands of hospitals that fail to buy and install costly health-care information technologies—such as digital records for prescriptions and patient histories—will face penalties through reduced Medicare and Medicaid payments. At the same time, the government expects to pay out tens of billions of dollars in subsidies and incentives to providers who install these technology programs.

The mandate, part of the 2009 stimulus legislation, was a major goal of health-care information technology lobbyists and their allies in Congress and the White House. The lobbyists promised that these technologies would make medical administration more efficient and lower medical costs by up to $100 billion annually. Many doctors and health-care administrators are wary of such claims—a wariness based on their own experience. An extensive new study indicates that the caution is justified: The savings turn out to be chimerical.

Since 2009, almost a third of health providers, a group that ranges from small private practices to huge hospitals—have installed at least some “health IT” technology. It wasn’t cheap. For a major hospital, a full suite of technology products can cost $150 million to $200 million. Implementation—linking and integrating systems, training, data entry and the like—can raise the total bill to $1 billion.

But the software—sold by hundreds of health IT firms—is generally clunky, frustrating, user-unfriendly and inefficient.

Now, a comprehensive evaluation of the scientific literature has confirmed what many researchers suspected: The savings claimed by government agencies and vendors of health IT are little more than hype.

To conduct the study, faculty at McMaster University in Hamilton, Ontario, and its programs for assessment of technology in health—and other research centers, including in the U.S.—sifted through almost 36,000 studies of health IT. The studies included information about highly valued computerized alerts—when drugs are prescribed, for instance—to prevent drug interactions and dosage errors. From among those studies the researchers identified 31 that specifically examined the outcomes in light of the technology’s cost-savings claims.

With a few isolated exceptions, the preponderance of evidence shows that the systems had not improved health or saved money.

It is already common knowledge in the health-care industry that a central component of the proposed health IT system—the ability to share patients’ health records among doctors, hospitals and labs—has largely failed. The industry could not agree on data standards.

Instead of demanding unified standards, the government has largely left it to the vendors, who declined to cooperate, thereby ensuring years of noncommunication and noncoordination. This likely means billions of dollars for unnecessarily repeated tests and procedures, double-dosing patients and avoidable suffering.


This article reinforces two points that we have made repeatedly about the application of information technology to health care: 1) The government needs to lead the process, and 2) We need to look elsewhere for means of controlling spending in health care.

Entrepreneurial approaches to health information technology are designed to make money – a lot of it. Competitors design their products to be incompatible with each other in hopes that one can dominate the market and crowd out the competitors. Public service approaches, such as the interoperable VistA system of the VA, are designed to help health care professionals give better and more coordinated care to their patients, but are not designed for profit. We already own the VistA system, and it could easily be adapted to become the national standard, at a small fraction of the costs of the private fragmented systems that are being forced on providers by the 2009 stimulus legislation.

Particularly annoying is the repeated claim that information technology and electronic records will save money. Not true. Yet the pursuit of these savings and the alleged savings from the various experiments in payment innovations found in the Affordable Care Act – which all experience to date has suggested have been and will be phantom savings – have distracted us from proceeding with reform that everyone knows would recover tremendous waste and ensure health care affordability for everyone forever – a single payer national health program, aka an improved Medicare for all.