Last week John Goodman posted a brief blurb about the latest problems with :. The issue deserves a little more attention because it is an abject lesson of how health policy always fails these days.

The articles from the New York Times and the RAND Corporation indicate that HIT has not lived up to expectations. Actually, it is quite a bit worse than that. The RAND piece is a sort of mea culpa for an earlier RAND “study” that predicted $81 billion in annual savings if we adopted HIT (the version I have said $77 billion, but what’s $4 billion between friends?) This RAND piece was the main rationale for spending over $20 billion (in two years) on HIT, but rather than saving money, HIT seems to have cost more money because it made it easier to bill for more services, according to the Times. It may also be creating more errors and inefficiencies in medical practice.


None of this should have some as a surprise. It was widely predicted four years ago when Congress was considering including HIT in the stimulus legislation. President Obama was quoted at the time as saying, “We will make the immediate investments necessary to ensure that within five years all of America’s medical records are computerized.” Mr. Obama may be forgiven his blind optimism, after all Newt Gingrich and Hillary Clinton had joined together to make similar promises.

But the people who actually knew something about this and were not lusting after a piece of the $20 billion piñata universally said the opposite — that a top-down bureaucratic system would not work very well and might actually cost more money and result in worse care.

Jerome Groopman, MD and Pamela Hartzband, MD, both on the faculty of Harvard Medical School, wrote in the Wall Street Journal that, “The basis for the president’s proposal is a theoretical study published in 2005 by the RAND Corporation (but) in the four years since the report, considerable data have been obtained that undermine their claims.” They call the proposal, “an elegant exercise in wishful thinking.” They add that the RAND researchers deliberately avoided looking at any negative information, saying, “We choose to interpret reported evidence of negative or no effect of health information technology as likely being attributable to ineffective or not-yet-effective implementation.”

And in the Washington Post, Stephan Soumerai and Sumit Majumdar wrote that Obama was making a “Bad Bet on Medical Records.” The first author was a professor at Harvard’s Medical School and the second was at the University of Alberta’s Medical School. They wrote that, “The benefits of health IT have been greatly exaggerated.” Specifically, they said, “Large, randomized controlled studies — the “gold standard” of evidence — in this country and Britain have found that electronic records with computerized decision support did not result in a single improvement in any measure of quality of care for patients with chronic conditions including heart disease and asthma.” And, they add, “Health IT has not been proven to save money.”

In the real world, the UK’s $12 billion effort to computerize medical records in the National Health Service was already falling apart, according to a report to Parliament. This was followed up a few years later by a candid admission by the government that it had wasted all the money and was closing down the program, as we reported here in a recent blog.

Even more modest efforts by our own government had already failed. The Veterans Administration spent $167 million to simply computerize its appointments system. This effort had “all but collapsed, and senior executives are worried about the repercussions it could cause on the Hill and in the White House, according to an internal memo obtained by NextGov (a trade publication).”

At the Department of Defense “top health officials lambasted the department’s central electronic health record system that manages patient files for millions of active duty and retired service members, saying it frustrates doctors because it crashes as often as once a week and generates duplicate records,” again, according to NextGov.The article goes on to quote the Deputy Surgeon General of the Air Forces as saying the system was, “slow, unreliable and so cumbersome that clinicians spend 40 percent of their time inputting data into the system, which is time spent away from patients.”

There was absolutely no evidence that this massive spending would succeed, and plenty that it would fail miserably, as we documented in a Research & Commentary piece for the Heartland Institute.

Now, even the editors of the Washington Post have come to agree the whole project was a fiasco — but only after we wasted $27 billion of taxpayer money.

Yet, those who are enriching themselves on the $27 billion are just happy as clams over the program. John Hoyt, the Executive Vice President of the Healthcare Information and Management Systems Society (HIMSS) was quoted in a recent Health Change Bulletin as saying −

This data suggests that the HITECH portion of the 2009 stimulus law is achieving its intended result of encouraging increased implementation and meaningful use of electronic health records among hospitals. Facilities…are laying the groundwork for interoperability to occur. Stage 6 and Stage 7 hospitals are fully prepared for provider-to-provider or facility-to-facility interoperability, as well as increasing the provider or facility’s ability to provide electronic health data reporting to public health and immunization registries to support population health review and syndromic surveillance.

There, aren’t you greatly reassured? By the way, the New York Times piece cited above reported that –

RAND’s 2005 report was paid for by a group of companies, including General Electric and Cerner Corporation, that have profited by developing and selling electronic records systems to hospitals and physician practices. Cerner’s revenue has nearly tripled since the report was released, to a projected $3 billion in 2013, from $1 billion in 2005.

No doubt the companies that paid for the RAND study are also members of HIMSS. And General Electric certainly has what might be called a “special” relationship with President Obama.

And so it goes in these days of crony capitalism.


Greg ScandlenGreg Scandlen is the founder of Consumers for Health Care Choices, a non-partisan, non-profit membership organization aimed at empowering consumers in the health care system. A former NCPA staff member, Scandlen is an accomplished writer, researcher, and public speaker. He is considered one of the nation’s experts on health care financing, insurance regulation and employee benefits. He testifies frequently before Congress, and appears on such television shows as the O’Reilly Factor, NBC Nightly News, and CNN.

Scandlen has published numerous papers on topics such as health care costs, insurance reform, employee benefits, individual insurance programs, HSAs and HRAs, and every aspect of consumer-driven health care.

He also has served as a fellow in health policy at the Cato Institute and as President of the Health Benefits Group, a consulting firm in Frederick, Maryland.