Electronic health records could save $81 billion.

• Author: Swartz, Nikki
• Position: UP FRONT: News, Trends & Analysis

According to a recent study published in Health Affairs journal, a comprehensive electronic health records system could save the United States $81 billion in healthcare costs each year and improve healthcare quality. But today, only about one-fourth of doctors and hospitals are using such a system.

Non-profit research organization RAND Corp. researchers set up a statistical model to predict the potential savings and business efficiencies if 90 percent of hospitals and doctors ultimately adopted a nationwide electronic medical records network. The model showed a conservative estimate of $81 billion in annual savings--$77 billion from improved efficiency and $4 billion from reduced medication errors and side effects, according to RAND researcher Richard Hillestad, who led the two-year study.

"Our findings strongly suggest that it is time for the government and others who pay for health care to aggressively promote health information technology," he said.

But many doctors and hospitals are not investing in the technology because they may not reap the savings--insurers and the government will, researchers report. According to the RAND study, "the potential savings would not be realized immediately," and doctors and hospitals making the investments would get less.

Instead, Medicare would receive about $23 billion of the potential savings each year, and private insurers about $31 billion a year, Hillestad said, adding that more government funding of computerized medicine is needed.

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Currently, only 20 percent of U.S. hospitals and a smaller percentage of doctors have paperless records. Most of those are designed to be used by the...