Costs and Benefits of Health Information Technology

Structured Abstract

Objectives: This report assesses the evidence base regarding benefits and costs of health information technology (Health IT) systems, that is, the value of discrete Health IT functions and systems in various healthcare settings, particularly those providing pediatric care.

Data Sources: PubMed®, the Cochrane Controlled Clinical Trials Register, and the Cochrane Database of Reviews of Effectiveness (DARE) were electronically searched for articles published since 1995. Several reports prepared by private industry were also reviewed.

Review Methods: Of 855 studies screened, 256 were included in the final analyses. These included systematic reviews, meta-analyses, studies that tested a hypothesis, and predictive analyses. Each article was reviewed independently by two reviewers; disagreement was resolved by consensus.

Results: Of the 256 studies, 156 concerned decision support, 84 assessed the electronic medical record, and 30 were about computerized physician order entry (categories are not mutually exclusive). One hundred twenty four of the studies assessed the effect of the Health IT system in the outpatient or ambulatory setting; 82 assessed its use in the hospital or inpatient setting. Ninety-seven studies used a randomized design. There were 11 other controlled clinical trials, 33 studies using a pre-post design, and 20 studies using a time series. Another 17 were case studies with a concurrent control. Of the 211 hypothesis-testing studies, 82 contained at least some cost data. We identified no study or collection of studies, outside of those from a handful of Health IT leaders, that would allow a reader to make a determination about the generalizable knowledge of the study's reported benefit. Beside these studies from Health IT leaders, no other research assessed Health IT systems that had comprehensive functionality and included data on costs, relevant information on organizational context and process change, and data on implementation.

A small body of literature supports a role for Health IT in improving the quality of pediatric care. Insufficient data were available on the costs or cost-effectiveness of implementing such systems.

The ability of Electronic Health Records (EHRs) to improve the quality of care in ambulatory care settings was demonstrated in a small series of studies conducted at four sites (three U.S. medical centers and one in the Netherlands). The studies demonstrated improvements in provider performance when clinical information management and decision support tools were made available within an EHR system, particularly when the EHRs had the capacity to store data with high fidelity, to make those data readily accessible, and to help translate them into context-specific information that can empower providers in their work.

Despite the heterogeneity in the analytic methods used, all cost-benefit analyses predicted substantial savings from EHR (and health care information exchange and interoperability) implementation: The quantifiable benefits are projected to outweigh the investment costs. However, the predicted time needed to break even varied from three to as many as 13 years.

Conclusions: Health IT has the potential to enable a dramatic transformation in the delivery of health care, making it safer, more effective, and more efficient. Some organizations have already realized major gains through the implementation of multifunctional, interoperable Health IT systems built around an EHR. However, widespread implementation of Health IT has been limited by a lack of generalizable knowledge about what types of Health IT and implementation methods will improve care and manage costs for specific health organizations. The reporting of Health IT development and implementation requires fuller descriptions of both the intervention and the organizational/economic environment in which it is implemented.

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Costs and Benefits of Health Information Technology

Evidence-based Practice Center: Southern California
Topic Nominators: The Office of the Assistant Secretary for Planning and Evaluation (ASPE), the Office of Disease Prevention and Health Promotion (ODPHP), and the Centers for Medicare & Medicaid Services (CMS), Department of Health & Human Services (HHS), as well as the Leap Frog Group.
Topic Funders: ASPE and ODPHP, HHS.

Page last reviewed April 2006
Page originally created April 2006
Internet Citation: Costs and Benefits of Health Information Technology. Content last reviewed April 2006. Agency for Healthcare Research and Quality, Rockville, MD.