Big electronic network could save big money

A report estimates that a national network for health could net $78 billion in annual savings. But some question the estimate.

By Tyler Chin, AMNews staff. Feb. 14, 2005.

A national electronic health network enabling doctors, hospitals and other health care entities to seamlessly exchange standardized information would net $78 billion annually in savings after it is fully implemented, according to a report published on the Health Affairs Web site.

Such a network would cost $276 billion over 10 years, and it's likely that the net savings would be greater than projected because the savings exclude clinical benefits, says the report, written by researchers at the Center for Information Technology Leadership, a nonprofit research organization created by Partners HealthCare, a health care system in Boston that includes about 10 hospitals.

The researchers did not attempt to measure clinical benefits -- particularly the economic impact that information that goes missing in a paper environment has on medication errors -- because there weren't enough data in that area, said internist Eric Pan, MD, a co-author of the report and associate fellowship director and senior analyst at the center.

Thus, the researchers focused on measuring and analyzing potential savings from administrative efficiencies and fewer laboratory and radiology tests, Dr. Pan said. Of the projected $78 billion savings, $34 billion would go to physicians and hospitals, $21.6 billion to insurers, and the rest to independent laboratories, radiology centers, pharmacies and public health departments, Dr. Pan said.

The researchers based their projections on previously published research, literature, information and estimates from a panel of experts. They also used analytical software to crunch and model their data.