Healthcare IT pays off, but don't hold your breath

Investing in healthcare IT projects such as electronic health records (EHR) and e-prescription systems produces significant socioeconomic benefits, but it can take nearly 10 years to see the first positive returns, according to a new study from Europe.

The EHR IMPACT study, the final report of a multiyear study initiated by the European Commission to evaluate the economic impact of utilizing healthcare IT in Europe, concluded that healthcare IT can produce annual socioeconomic returns of up to 400%.

However, it takes at least four -- and more typically nine -- years before EHR and e-prescription initiatives produce their first positive annual socioeconomic return, and it takes between six and 11 years to achieve a cumulative net financial benefit, according to the EHR IMPACT study.

Healthcare IT support

EHR IMPACT study sites

  • National Heart Hospital -- Sofia, Bulgaria
  • KolĂ­n-Čáslav Health Data and Exchange Network -- Czech Republic
  • Dossier Patient PartagĂ© RĂ©parti (DDPR) -- RhĂ´ne-Alpes Region, France
  • Nationwide Health Information Network -- Israel
  • Lombardy Regional Healthcare Information System -- Italy
  • Regional EHR and ePrescribing System Diraya -- AndalucĂ­a, Spain
  • Regional ePrescribing System Receta XXI -- AndalucĂ­a, Spain
  • Kronoberg County Regional Integrated EHR and ePrescribing System -- Sweden
  • University Hospitals of the Canton of Geneva -- Switzerland (computerized patient record system)
  • NHS Emergency Care Summary -- Scotland, U.K.
  • Evanston Hospital and Northwestern Healthcare -- Illinois, U.S. (unspecified)

The goal of the study, commissioned by the European Commission Information Society and Media Directorate-General (DG INFSO), was to support ongoing healthcare IT initiatives and implementation by the European Commission, member governments, and private investors. It was conducted to improve awareness of the benefits of EHR and e-prescription systems and to provide empirical evidence on costs, lessons learned, and the socioeconomic impact of successfully implemented systems.

One of the largest challenges facing policymakers, industrialists, and market-makers is identifying and measuring in precise terms the added-value of expanding ICT in health care and provision, the EHR IMPACT study group wrote in the early stages of the project.

Eleven healthcare IT systems -- nine in Europe, one in Israel, and one in the U.S. -- were studied and evaluated using 304 cost and 423 benefit functions. The study sites were selected based on the existence of operational, routine, and effective utilization of EHR and/or e-prescription systems, interoperability, transferability, and reliability of the system implementations, and willingness of the sites to participate and provide data.

Findings of the report include:

  • There is no single correct strategy for implementing healthcare IT systems. Strategies that fit local and regional settings designed to meet clearly identified, measurable needs have a better chance of success.
  • Cost of implementation is expensive and depends upon the scope of the healthcare IT solution, the range of healthcare levels affected, the type of health system, and the economic environment of the investment. The total value of investments for the 11 sites ranged from 3 million euros ($4.3 million) to nearly 480 million euros ($690 million) over a nine- and 13-year time period.
  • In view of the fact that annual financial investments never exceeded 2% of the annual budgets of the organizations, affordability may not be the primary barrier to deploying interoperable EHR and e-prescription systems.
  • Achieving high sustained levels of utilization in both the implementation and operational phases are essential to ensuring positive performance outcomes. Active involvement by healthcare professionals and administrators is essential for success, starting with the initial planning stages, to achieve success and to keep costs lower.
  • Interoperability and seamless data transfer is essential, as it is a prime driver of benefits. Interoperable EHRs are foundations of health information and support to other specialized healthcare IT systems.
  • Policies have to create the right climate and incentives for healthcare organizations to pursue the required investment. The study authors recommend that political commitments be made to improve the quality and increase the efficiency of healthcare, remove regulatory barriers, and allow investors enough time to achieve net socioeconomic returns.

The authors state that long phases of engagement, planning, and design lead to net socioeconomic costs followed by net benefits at later stages. Of the 11 organizations studied, only one produced positive financial returns.

  • In the 11 case studies, healthcare provider organizations bore most of the costs and were the main beneficiaries.
  • Financial gains could be up to 60% of the total socioeconomic benefits, with an average of 13%. Financial outlays can be between 20% and 85% of the total socioeconomic cost of investment, at an average of about 50%. By taking the socioeconomic perspective, healthcare IT initiatives can achieve returns of close to 200% on their total investment and an average of about 80% over some nine years.
  • As long as changes are being achieved at what is perceived as "the right time," longer time scales of implementation are generally associated with lower risk of failure.

"The results of the EHR IMPACT study give grounds for optimism in the success, value, and deployment of interoperable EHR and e-prescribing systems across Europe," the study group wrote. "The strategic recommendations of the study are meant to encourage and support future initiatives."

The complete report may be downloaded by clicking here.

By Cynthia E. Keen staff writer
January 7, 2010

Related Reading

Study: EMRs may be overhyped, December 15, 2009

No hospital savings with electronic records: U.S. study, November 23, 2009

High-tech communication tools improve patient care, studies find, December 6, 2007

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