Electronic medical records: A billion here, $77 billion there--it starts to add up

Would electronic medical records save the United States $77 billion?

Hillary Clinton, Senator from New York and one of the leading candidates for the 2008 presidency, said so on Thursday night.

You can hear it for yourself. Itâ''s about five and half minutes into this YouTube video.

If you don't want to listen, hereâ''s the key soundbite:

According to the Rand Corporation, hardly a bastion of liberal thinking, they have said that we would save $77 billion dollars a year. That money could be put into prevention. It could be put into chronic care management. It can be put into making sure that our health care system has enough access so that if you are in a rural community somewhere in California or somewhere in Tennessee or somewhere in Georgia, youâ''ll have access to health care. If youâ''re in an inner city area, and you see your hospital, like the Drew Medical Center, closed on you, then youâ''re going to have a place once again where you can get health care in the immediate area.

Clinton wants to pay for universal health care, in part, with these savings. And sheâ''s been talking about it for a while. She mentioned the $77 billion figure in a key policy speech on the eve of the New Hampshire primary that reinvigorated her campaign. Itâ''s obviously an important matter, yet Iâ''m not sure the press has taken even the quickest look at the RAND study on which so much of Clintonâ''s health plan depends.

If they had, theyâ''d notice that the study was released back in 2005. Not only that, but it was two years in the making, according to a RAND press release issued at the time. So the savings might be greater, adjusted for inflation, and might be greater, or a lot less, depending on how outdated the data is.

The study actually claims $81 billion in annual savings, according to a press release issued at the time. For some reason Clinton isnâ''t counting $4 billion that â''would be saved each year because of improved safety, primarily by reducing prescription errors as computerized systems warn doctors and pharmacists of potential mistakes.â''

Leaving aside those safety savings, what would the $77 billions in savings result from? Richard Hillestad, a senior management scientist at RAND who led the study,

estimates that if 90 percent of doctors and hospitals successfully adopt health information technology and use it effectively, resulting efficiencies would save $77 billion annually. The biggest savings would come through shorter hospital stays prompted by better-coordinated care; less nursing time spent on administrative tasks; better use of medications in hospitals; and better utilization of drugs, labs and radiology services in outpatient settings.

In other words, itâ''s not as if we save $77 billion from eliminating the manual operations of paper records, and then can plunge the savings into improved care. The savings come from the very improvements in heathcare that electronic health records make possible. So the question arises: Is Clinton double-counting the benefits of electronic health care records, once in the saving of the money, and then again in the spending of it? Look at one specific instance the RAND release gives:

For example, health information technology could make a major contribution to improving care for patients with chronic conditions such as diabetes, who account for 75 percent of the nation's medical care costs, according to researchers.

That sounds an awful lot like the â''chronic care managementâ'' that Clinton cited as something that â''that money could be put into.â''

To be sure, the estimated cost of Clintonâ''s proposed changes to health care run about $110, half of which she says can come from ending the Bush tax cuts, which are set to expire soon. â''The other $55 billion,â'' she explained, â''would come from the modernization and the efficiencies,â'' of which, presumably, electronic health care is only one. It is, though, the only one she discussed at length in the debate.

Thereâ''s also, then, a question of timing. The RAND study says

â''It's going to take 10 to 15 years to achieve wide adoption of electronic medical information, even if all the ongoing efforts are successful,â'' Hillestad said.

Does Clinton plan to wait for the savings to materialize before reforming health care? Surely not.

Health care in general is a serious issue, as is the specific one of electronic health records. It was given quite a bit of debate time this week. Unfortunately, Wolf Blitzer, who moderated the CNN-sponsored debate, arrived unprepared to challenge Clintonâ''s airy claims about it, despite their having been made more than three weeks earlier in an important speech.

For those who want more substance than air, Spectrum has plenty to offer. Way back in 2002, we published "Welcome To The (Almost) Digital Hospital,"

More recently, contributing editor Robert N. Charette looked specifically at the promises and problems of electronic medical records in â''Dying for Data.â''

In fact, Bobâ''s been a little obsessed by the topic. Last summer he blogged about it three times in one month, here, here, and here. The last two are about the critical issue of privacy.

And earlier this month, Bob wrote about a fascinating 3-D visualization tool for electronic health records being developed at IBM, â''Visualizing Electronic Health Records With â''Google-Earth for the Bodyâ''.â''

Weâ''ll continue to follow this and other tech-related issues as the presidential campaign continues. Some of the claims made by the candidates involve some pretty interesting and complicated technologies. For this one, though, all you had to do was read a two-year-old press release.

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