US Behind in HIT Spending – Stimulus Insufficient

Despite the fact that the US spends nearly twice as much on healthcare as any other country, the US is as much as 12 years behind other OECD countries in health information technology investment. See the Commonwealth Fund’s entry on Health Care Spending and Use of Information Technology in OECD Countries.


The American Recovery & Reinvestment Act of 2009–the Stimulus Package–apportions $19 billion for investment into the HIT infrastructure in the US. As much as $3 billion goes to the Office of the National Coordinator (which will now be codified) and other standards creating bodies. The remaining amount will be given to providers primarily through increased Medicare reimbursement. If divided evenly, each hospital would receive approximately $11 million. A substantial sum, but hardly close to the $200 million over 3 years required in a typical implementation at a 300+ bed hospital. Only 10% of hospitals currently have full electronic health records. Another 20-30% are in planning or implementation stages. The stimulus may encourage more providers to enter the planning stages and will help along those already in the process during difficult economic times. But $11 million for the remaining 60-70% is entirely insufficient.

Evidence shows that the only providers that stand to get a return on investment in HIT are large network providers with geographically distributed practices, such as Kaiser or the VA. This makes sense, as the administrative cost of sharing information is high. The early adopters (the 10%) consist of these large networks and a few providers with well-funded, forward-thinking CIOs. The 20-30% currently planning hope to break even at best and justify the investment by improved patient care (especially through CPOE). The rest are mostly too small to realize significant cost savings and will likely need much more than $11 million to break even.


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