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No (Obama Promised) $80B In Health Savings

From the New York Times:

In 2nd Look, Few Savings From Digital Health Records

By REED ABELSON and JULIE CRESWELL | January 10, 2013

The conversion to electronic health records has failed so far to produce the hoped-for savings in health care costs and has had mixed results, at best, in improving efficiency and patient care, according to a new analysis by the influential RAND Corporation.

Optimistic predictions by RAND in 2005 helped drive explosive growth in the electronic records industry and encouraged the federal government to give billions of dollars in financial incentives to hospitals and doctors that put the systems in place.

RAND’s 2005 report was paid for by a group of companies, including General Electric and Cerner Corporation, that have profited by developing and selling electronic records systems to hospitals and physician practices. Cerner’s revenue has nearly tripled since the report was released, to a projected $3 billion in 2013, from $1 billion in 2005.

HP and Xerox also helped fund the study.

The report predicted that widespread use of electronic records could save the United States health care system at least $81 billion a year, a figure RAND now says was overstated. The study was widely praised within the technology industry and helped persuade Congress and the Obama administration to authorize billions of dollars in federal stimulus money in 2009 to help hospitals and doctors pay for the installation of electronic records systems…

As usual, the self-proclaimed ‘newspaper of record’ is re-writing history a little here. The only reason this Rand study was significant because, in March 2009, Obama claimed changing over to digital records would save $80 billion dollars a year. And he used this claimed $80B savings as a major selling point for Obama-Care, which mandates the change over to digital records.

And, yes, Obama based his claim on the Rand’s study in 2005. But it was common knowledge that the study had been funded by interested parties HP and Xerox and it would not save money. A fact several top Harvard doctors pointed out in the Wall Street Journal immediately after Obama started touting the study.

Even Rand itself admitted in 2005 and later that there was no evidence to back the study’s theoretical suppositions.

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

Officials at RAND said their new analysis did not try to put a dollar figure on how much electronic record-keeping had helped or hurt efforts to reduce costs. But the firm’s acknowledgment 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…

The RAND researchers pointed to a number of other reasons the expected savings had not materialized. The rate of adoption has been slow, they said, and electronic records do not address the fact that doctors and hospitals reap the benefits of high volumes of care.

Many experts say the available systems seem to be aimed more at increasing billing by providers than at improving care or saving money. Federal regulators are investigating whether electronic records make it easier for hospitals and doctors to bill for services they did not provide and whether Medicare and other federal agencies are adequately monitoring the use of electronic records

It would be hilarious, if it weren’t so sick.

This article was posted by Steve Gilbert on Friday, January 11th, 2013. Comments are currently closed.

One Response to “No (Obama Promised) $80B In Health Savings”

  1. Alinsky – break USA financially, bankrupt it with such massive demands on it’s resources that this wretched imperialist hegemony collapses under its own weight.

    Time to start rewriting our recent History, folks …




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