CEO Survival Guide - AHRQ National Resource Center; Health ...

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Electronic Health Record SystemsStandardized electronic communicationsbetween providers and other healthcareorganizations is estimated to save $77.8billion per year, approximately 5 percent ofU.S. healthcare expenditures.(Walker et al., 2005)Improvements in Efficiency areJust the Tip of the IcebergImprovements in efficiency are but one typeof benefit to be derived from investmentin interoperable EHR systems. There is agrowing body of evidence on the potentialto improve the safety and effectiveness ofhealthcare, and thus achieve substantialvalue (see Exhibit 2).Developing comprehensive estimates ofthe savings associated with interoperableEHR systems can be difficult. The Officeof the National Coordinator for HealthInformation Technology (ONCHIT) estimatesthat the annual savings attributable to widespreadEHR adoption, including savingsresulting from improved safety and diseasemanagement, are likely to lie between 7.5 and30 percent of annual healthcare spending. Asshown in Exhibit 3, a comprehensive studyby the RAND Corporation concluded thatthe potential benefits associated withimproved prevention and management ofchronic diseases are enormous (Hillestad etal., 2005).The benefits outlined in the RAND workrest on many assumptions about sophisticated,integrated, interoperable EHR systems operatingwithin a health information networkwith high levels of participation on the partof both providers and patients, and somehave suggested that the projections are overlyoptimistic (Goodman, 2005; Himmelstein andWoolhandler, 2005). But even conservativeestimates point to a sizable return on investmentin EHR systems.EXHIBIT 2 Improvements in Safety and Effectiveness• CPOE: Can reduce serious medication errors by 55 to 86 percent (Bates et al., 1998, 1999),andpotential adverse drug events by as much as 84 percent (Bates et al., 1998).• REMINDERS TO CLINICANS AND PATIENTS: Increased provision of preventive services:influenza and pneumococcal vaccinations and screening for breast, cervical, and colorectalcancer (Balas et al., 2000; Shea et al., 1996).• DISEASE MANAGEMENT PROGRAMS: Enhanced chronic disease tracking and compliancewith clinical guidelines leads to better outcomes (Morris, 2003; Starmer et al., 2000).www.NQFExecutiveInstitute.org NQF Executive Institute 37
CEO Survival Guide to Electronic Health Record SystemsEXHIBIT 3 Annual Net Value from Interoperable EHR Systems(assuming 15 year adoption period)BenefitsEfficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $77.0 billionSafety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5 billionChronic Disease Management . . . . . . . . . . . . . . . . . . . . . . . 40.0 to 147.0 billionTotal Annual Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $121.5 to 228.5 billionEHR System Adoption Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.6 billionNet Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $113.9 to 220.9 billionSource: Hillestad et al., 200538 NQF Executive Institute www.NQFExecutiveInstitute.org
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