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Study: No Cost Savings With Electronic Medical Records

BOSTON — A new Harvard study (PDF) finds that computerized medical records don’t save money or make hospitals more efficient, despite claims that health information technology could generate huge financial returns.

The study has major implications for national health reform. Congress is counting on savings from health IT to help fund the cost of revamping the health care system and the Obama administration plans to use about $30 billion in federal stimulus money to spur the nationwide adoption of health IT, such as electronic medical records.

But Harvard Medical School professor Steffie Woolhandler said an analysis of 4,000 hospitals nationwide found no cost benefit from computerization.

“If people think we’re going to pay for health reform off of savings on hospital computerization, they’re really sorely mistaken,” said Woolhandler, one of the study’s co-authors. “There are no savings we were able to find looking at five years of information.”

The researchers examined data from 2003 to 2007, including from hospitals on the “100 Most Wired List” compiled by Hospital and Health Networks magazine. They analyzed the data for evidence of increased quality, cost savings or improvements in administrative efficiency.

Besides finding no indication that computerization lowers costs, the researchers found that some hospitals actually saw administrative costs rise after computerizing, probably due to the expense of buying and maintaining equipment and paying for technology staffs.

And those increased administrative expenses weren’t just one-time upfront costs of purchasing computer systems; those expenses remained elevated even several years after computerization had taken place.

In addition, the research showed that computerization hasn’t helped hospitals become more efficient, although it may have “modestly improved the quality of care for heart attacks,” according to the study.

One reason computerization may not be improving efficiency and quality of care: many medical software programs are designed primarily to help hospitals with their billing, accounting and registration needs, not their clinical work.

When hospital computer systems are designed with clinical care in mind, Woolhandler said, they can help prevent medication errors, flag a patient’s drug allergies, and ensure that prescriptions are written properly.

“I’m still a believer in computerization; I’m not a total Luddite,” she said. “But I think computerization is very often done wrong. And, certainly from a cost perspective in the U.S., it’s done wrong more than it’s done correctly … so I think we need to be smarter about the way we computerize in this country.”

The study appears online in the American Journal of Medicine.

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