Spending on entitlement programs like Medicare and Medicaid consumes about two-thirds of all federal spending, but new research from the University of Notre Dame shows that information technology investments in electronic health records and other forms of information and web technology can lead to significant spending reductions—potentially in the billions of dollars.
That’s the conclusion from research just released by two professors of information technology from the University of Notre Dame. They contend that health information exchanges, which are typically nonprofit technology companies that make it possible for hospitals and health providers to share medical data, are beginning to show their promised value to the health care system.
Many health information networks were created because hospitals needed better ways to exchange medical data. Photocopying, mailing and faxing records were inefficient, says Idris Adjerid, an information technology professor in Notre Dame’s Mendoza College of Business
“The research shows that when health information exchanges appear in regional markets, there are massive cost savings,” Adjerid says. “For that very reason, there is long-standing interest in implementing when health information exchanges nationally.”
The researchers collected annual data from 2003 through 2009 to compare average Medicare spending per beneficiary in healthcare markets with a health information exchange compared to markets that didn’t have a network. The analyzed data accounted for factors such as healthcare delivery infrastructure, regional hospital quality, healthcare information technology adoption, patient demographics and economic factors.
The result was that shared access to universal healthcare data by a national electronic network has the potential to generate annual savings in Medicare spending of about $3.12 billion. That’s less than 1%— 0.5%— of the $655 billion the federal government spends annually on Medicare.
But as a national health exchange network builds out future savings would grow, says Notre Dame information technology professor Corey Angst. Uncertainty surrounding the value of health exchange has thus far led to lukewarm support for such networking and web technologies, Angst says. But by showing that exchanges are having a meaningful impact on health care spending, the Notre Dame research should impact the policy and healthcare debate, Angst says.
Angst says. “What we show is that the ability to electronically exchange medical data can result in savings in the overall health system, which should encourage new models of exchange,” Angst says.
There are about 150 local regional and local healthcare information exchanges nationwide, says the U.S. Department of Health and Human Services.
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