Cost-benefit analysis of health information technology
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journal article Application of Cost-Benefit Analysis to Health Systems TechnologyJournal of Occupational Medicine Vol. 16, No. 3 (March, 1974) , pp. 172-186 (15 pages) Published By: Lippincott Williams & Wilkins https://www.jstor.org/stable/45002063 Read and download Log in through your school or library Journal Information Journal of Occupational and Environmental Medicine is an indispensable guide to good health in the workplace for physicians, nurses, and researchers alike. In-depth, clinically oriented research articles and technical reports keep occupational and environmental medicine specialists up-to-date on new medical developments in the prevention, diagnosis, and rehabilitation of environmentally induced conditions and work-related injuries and illnesses. Journal of Occupational and Environmental Medicine is an excellent source for new ideas, concepts, techniques, and procedures that can be readily applied in the industrial or commercial employment setting. Publisher Information Wolters Kluwer Health is a leading provider of information for professionals and students in medicine, nursing, allied health, pharmacy and the pharmaceutical industry. Major brands include traditional publishers of medical and drug reference tools and textbooks, such as Lippincott Williams & Wilkins and Facts & Comparisons; electronic information providers, such as Ovid Technologies, Medi-Span and ProVation Medical; and pharmaceutical information providers Adis International and Source®. Wolters Kluwer Health is a division of Wolters Kluwer, a leading multi-national publisher and information services company with annual revenues (2005) of €3.4 billion and approximately 18,400 employees worldwide. Wolters Kluwer is headquartered in Amsterdam, the Netherlands. Its depositary receipts of shares are quoted on the Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Rights & Usage This item is part of a JSTOR Collection. This information is for reference purposes only. It was current when produced and may now be outdated. Archive material is no longer maintained, and some links may not work. Persons with disabilities having difficulty accessing this information should contact us at: https://digital.ahrq.gov/contact-us. Let us know the nature of the problem, the Web address of what
you want, and your contact information. This database contains literature articles about the costs and/or benefits of health information technology, and is searchable by the user in a variety of ways. It also contains information about how this database was created. This database was developed by
Southern California Evidence Based Practice Center - RAND under a contract from the Agency for Healthcare Research and Quality. Access the evidence-based practice report developed by RAND, summarizing the conclusions drawn from this database
(PDF, 596 KB). To access the press release click here. Search Database This tool is designed to find publications from a literature search on the topic of health information technology. You can search according to the following criteria: Project Background The use of health information technology (HIT) holds tremendous promise in improving the efficiency, cost-effectiveness, quality and safety of medical care delivery in the United States. The realization of these benefits is especially important in the context of reports that show several consecutive years of double-digit increases in healthcare costs. Barriers and Implementation All studies initially reviewed were screened for data on barriers to adoption and implementation. For this analysis, qualitative studies that were primarily focused on barriers and studies that collected quantitative data on barriers were included. Studies in which barriers were briefly discussed, but were not a primary focus, were excluded. A primary focus on barriers was identified through reviewer consensus. The information on this page is archived and provided for reference purposes only. Identifying effective and sustainable ways to temper the growth of US health care spending has proved to be challenging. One source of high spending in the United States is administrative costs. Taming them is one approach to bending the cost curve, and health information technology (HIT) has often been considered a promising solution.
Although published 15 years ago, the most cited and comprehensive study on US health care administrative costs suggests they account for about 30% of total health care expenditures. More recent numbers vary but the bottom line is still the same: the United States spends far more than other wealthy nations on health care administration. The research literature has paid particular attention to billing and insurance-related (BIR) costs, a subclass of administrative costs pertaining to billing and collection of payment for care. The United States’ multipayer health care system leads to considerable complexity in this realm. Systems with less BIR complexity—such as the global budgets of Canadian or Scottish hospitals—tend to have lower administrative costs. BIR costs accounted for almost 17% of total US health expenditures in 2012, or $471 billion. Studies suggest BIR costs add up to a substantial proportion of revenue for individual health systems as well. In 1 academic system, Phillip Tseng, MEd, of Duke University School of Medicine, and colleagues calculated that BIR costs total 14.5% of revenue from primary care visits and more than 25% from discharged emergency department visits. At the clinician level, the researchers found the annual administrative workload of primary care physicians costs nearly $100 000 per physician. Lawrence P. Casalino, MD, PhD, MPH, of Weill Cornell Medical College, and colleagues estimated time spent interacting with insurance plans costs more than $68 000 per physician per year. Reducing the BIR Cost Burden Although the burden of BIR costs in the United States is well documented, how to effectively reduce this burden is unclear. Findings from a 2010 study suggest that standardizing BIR protocols could help minimize administrative costs. Others agree. The range in billing complexity among insurers—public and private—is substantial. These differences, however, demonstrate that there is room for improvement. Maintaining multiple payers while implementing standardized practices across them all could mimic the potential administrative cost savings of a simpler system structure. This streamlined approach is often considered possible through the use of HIT. A recent editorial in JAMA argues that the current push toward HIT, particularly electronic health records (EHRs), gives rise to a natural opportunity to streamline BIR processes. Often cited as a way to improve efficiency and productivity, HIT could also theoretically reduce costs, or, at the very least, slow cost growth. In 2005, the RAND Corporation projected significant cost savings and improved health outcomes with widespread implementation of HIT. Acknowledging annual implementation costs of $8 billion, they estimated that annual overall savings could total $77 billion resulting from increased efficiency (including reduced hospital stays and administrative burden). Computerized physician order entry could result in an additional $1 billion in annual savings. A few years later in 2009, the Health Information Technology for Economic and Clinical Health (HITECH) was passed, in part, to incentivize EHR implementation. A 2015 US Centers for Disease Control and Prevention report suggests that it may have been successful in doing so. The report shows that the annual percent increase of outpatient departments using a basic EHR system after the law was passed was 4 times greater than the annual percent increase prior to the law. David Cutler, PhD, of Harvard University, and colleagues suggest that the HITECH Act lays the groundwork for comprehensive electronic correspondence, expanding beyond EHR to tasks such as the transmission of billing and claims data. This could save the health care system $2 billion annually, if successfully implemented. Questionable Savings but Better Outcomes? However, in reality, HIT doesn’t actually seem to be providing substantial savings. A 2014 review of early adoption of HIT among thousands of US hospitals showed no notable cost savings 5 years after implementation. One study of an EHR implementation pilot program in Massachusetts found the average projected 5-year return was negative, with a loss of almost $44 000 per physician. Additionally, C. Scott Kruse, PhD, MSIT, MHA, MBA, of Texas State University, and colleagues found cost to be the most cited barrier of HIT implementation in long-term care facilities, and a 2012 study of computerized physician order entry for a particular medication found no reduction in daily cost of therapy. Instead, studies show HIT contributes to something else: improved clinical outcomes. Kruse and colleagues noted a correlation between HIT and error reduction, improved efficiency, and improved health outcomes. Other researchers reported that HIT implementation increases guideline adherence and disease surveillance and may be associated with a reduction in medication errors and adverse drug events. HIT may also reduce disparities in access to care and adverse birth outcomes while improving patient-centered care. High administrative costs are among the reasons for high US health care spending. But the hoped-for administrative savings from HIT have not materialized, even as HIT seems to have had a positive impact on clinical outcomes. Corresponding Author: Elsa Pearson, MPH (). Published Online: July 3, 2018, at https://newsatjama.jama.com/category/the-jama-forum/. Disclaimer: Each entry in The JAMA Forum expresses the opinions of the author but does not necessarily reflect the views or opinions of JAMA, the editorial staff, or the American Medical Association. Additional Information: Information about The JAMA Forum, including disclosures of potential conflicts of interest, is available at https://newsatjama.jama.com/about/. Note: Source references are available through embedded hyperlinks in the article text online. What is costWhat is cost-benefit analysis? Cost-benefit analysis is a way to compare the costs and benefits of an intervention, where both are expressed in monetary units. idea icon. Both CBA and cost-effectiveness analysis (CEA) include health outcomes.
What is a costFor example: Build a new product will cost 100,000 with expected sales of 100,000 per unit (unit price = 2). The sales of benefits therefore are 200,000. The simple calculation for CBA for this project is 200,000 monetary benefit minus 100,000 cost equals a net benefit of 100,000.
What role does costCBA comes to play so as to value both incremental costs and outcomes in monetary terms and therefore allowing a direct calculation of the net monetary cost of achieving a health outcome. A gain in life-years may be regarded as the cost of the productive value to society of that life-year.
What is a costS. Environmental cost-benefit analysis (CBA) is the application of CBA to projects or policies that have the deliberate aim of environmental improvement or actions that somehow affect the natural environment as an indirect consequence.
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