NCPA - National Center for Policy Analysis


November 6, 2007

Health technology adoption exacts big up-front expenditures by medical groups, but investing $500 million into digitizing health care could amount to savings of between $1 billion and $1.3 billion annually in Oregon, according to study co-authored by the state and Oregon Health Care Quality Corp.

According to the study's authors:

  • One-third of the savings would come from eliminating unnecessary medical services, such as duplicate lab tests requested when a provider cannot access a patient's previous test results.
  • Two-thirds would come from more efficiently processing medical information, for example, cutting out the back-and-forth that occurs when a pharmacy technician cannot read a physician's handwriting on a faxed prescription.

The United States lags other industrialized nations in adoption of health IT infrastructure like electronic medical records for patients, largely because the costs accrue to cash-strapped medical practices while savings are realized by health plans, employers and patients.

"The important takeaway is that savings don't accrue to those we ask to make the investment.  That's why uptake is slow," said Nancy Clarke, executive director of the nonprofit Oregon Health Care Quality Corp.

Source: Robin J. Moody, "Study: $500M investment in health technology could save $1B," Portland Business Journal, November 5, 2007.

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