Report Shows Electronic Health Records Haven't Cut Costs

Jan 11, 2013

Conversion to electronic health records hasn't produced hoped-for savings in health care costs predicted by a 2005 report, and it's had mixed results in improving efficiency and patient care, according to a RAND Corporation report. RAND's 2005 predictions helped drive growth in the electronic records industry and encourage billions of dollars in subsidies from the federal government to hospitals and doctors to implement such systems, Reed Abelson and Julie Creswell of The New York Times report.

The 2005 report predicted that widespread use of electronic health records could save the U.S. health care system at least $81 billion a year. "But evidence of significant savings is scant, and there is increasing concern that electronic records have actually added to costs by making it easier to bill more for some services," Abelson and Creswell write. Health care costs have risen $800 billion since the 2005 report, according to federal data.

Authors of the new report, published in this month's issue of Health Affairs, said they didn't attach dollar amounts to how much electronic record keeping has helped or hurt efforts to reduce costs. "But the firm's acknowledgement that its earlier analysis was overly optimistic adds to a chorus of concern about the cost of the new systems and the haste with which they have been adopted," Abelson and Creswell report.

There are several factors why the switch has not created significant savings, report authors said. Thos factors include use of commercial record systems, slow rates of system adoption, and the fact that electronic record "do not address the fact that doctors and hospitals reap the benefits of high volumes of care," Abelson and Creswell report. (Read more)