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2009 Health Information Technology Act

2009 Health Information Technology Act

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American Recovery and Reconciliation Act
American Recovery and Reconciliation Act

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Published by: smallsara on Jan 15, 2010
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01/16/2013

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A 2005 study focuses on the benefits and costs that would accrue to and be sustained as a

result of widespread adoption of HIT. The benefits of health information technology are clear in

theory, but adoption rates lag in the United States, and real statistical results have been limited

(Hilstead, 2005).

Rand researchers Federico Girosi et al., calculated a model which demonstrated a cost of

$98 billion for hospitals based upon a 90 percent national implementation of HIT-EHR over a

fifteen-year period. Using similar extrapolation data, the study estimated that a full-scale hospital

HIT-EHR system would cost between 1.8 percent and 3 percent of total yearly expenditures over

a four-year implementation period. This calculation equates to a national cost of $6.5 billion per

year, or $97.4 billion over a fifteen year time frame (Girosi et al, 2005).

Multiple researchers noted that providers are identified as bearing the majority of the cost

(including the direct software and hardware purchases, expenses associated with implementation,

The 2009 Health Information Technology Act

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training, maintenance, and productivity recovery), while the insurers and patients reap most of

the financial benefits from HIT-EHR adoption (Argawal, 2002).

An increasing number of studies measure the value and cost effectiveness of CPOE,

EHR, bar coding, e-prescribing and other types of HIT. These reviews tend to focus on patient

safety improvements, financial benefits from quality and efficiency improvements, and the

development of a business case for HIT (Brown, 2005). These types of studies in particular, can

play an important role in supporting the adoption of financial incentive programs. In addition,

they emphasize the misalignment of costs and benefits among individual stakeholders adopting

technology and provide actuarial analyses and evidence for development of a business case and

ROI for HIT. There continues to be minimal information available regarding the real cost of

adoption within with the majority of research. In addition, they tend to use models incorporating

inordinately high (90-100%) implementation by providers within their models (Taylor, 2005).

According to a study by Christopher Conover for the Cato Institute, the cost of health

service regulations dwarf other costs imposed by government intervention in the health care

sector, and cannot be dismissed as a key factor in driving the cost of implementation of a

national electronic infrastructure out of reach for most providers (Conover,2004).

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