Glossary Of Offsets
Efficiencies
• Public Option
• Health IT
• Comparative Effectiveness
• Medical Homes
• Medicare Cost Sharing

Taxes
• Taxes For Noncompliance
• Surtax On The Wealthy
• International Tax Changes
• Sugary Beverage And Alcohol Tax
• Tax On Insurance Companies
• Plastic Surgery Tax
• Changing Tax Exclusion For Employment-Based Health Insurance

Quality Of Care
• Measuring Quality Of Care
• Preventive Service
• Expanding Disease-Management Services

Provider Payment Revisions
• Pay For Performance
• Abolishing The SGR
• Bundling
• Reduce The Annual Update Factor
• Partial Capitation
• Penalties For High Readmission
• Cut Payments To Medicare Advantage

TOPIC PAGE: Health Care

Definition

Health information technology (health IT) would digitize patient records, doctors' notes, prescription forms, test results and other information that most physicians currently record using dead trees and ink.

Executive Summary

For all the advances in medical technology, doctors still store and share health information in a decidedly 20th-century way: manila folders, freebie notepads from drugmakers and plenty of messy handwriting.

The possibility that health IT could boost efficiency across the board remains tantalizing. Reduced paperwork, fewer redundant tests, lower administrative overhead and fewer adverse medication interactions are just some of the benefits health care experts dream about. Health IT could also give researchers huge tracts of patient data to study the comparative effectiveness of different treatments.

But like civilian space travel and a better mousetrap, digitized health records have been promised for a long time but slow in coming. Only about 5 percent of physicians have adopted comprehensive health IT systems, according to the Congressional Budget Office. High startup costs are largely to blame, with high-quality systems running more than $40,000 per physician.

Just how much money health IT will save is up for debate. Unless physicians and hospitals are hit with penalties for lingering in the dead-tree era, inducements to bring them online could top $1 billion over 10 years. Doctors, nurses and other medical professionals may not adapt to health IT as fast as the CBO predicts, and better record keeping might identify areas for more treatment, not less.

"There's broad consensus that there needs to be more technology making its way into the profession," said Paul Ginsburg, president of the Center for Studying Health System Change, a nonpartisan policy research organization. "But it's pretty uncertain about the short-term prospects for saving money."

Max Savings

Just how much health IT will save depends on a number of variables, chief among them just how many hospitals and physicians switch to electronic medical records. The government could make health IT a prerequisite for hospitals and doctors that want to serve Medicare beneficiaries -- theoretically achieving a near-100 percent adoption rate. If Congress subsequently cuts payments to health care providers to reflect the savings health IT has generated, the CBO estimates that $34 billion could be saved by 2019.

Works Best When Combined With

Some of the biggest savings health IT could produce stem from the mountains of raw data that electronic record keeping will generate. With a bird's eye view of how various treatments fare nationwide, researchers could potentially identify the most cost-effective ones -- an analysis referred to as comparative effectiveness.

Plans

No plan endorses health IT unconditionally. The American Recovery and Reinvestment Act is investing $19 billion in health IT, according to the CBO, and the Senate Finance Committee is considering expanding hospital eligibility for those funds. The Wyden plan, meanwhile, requires insurers to create and maintain electronic medical records for all covered individuals. Some House and Senate Republicans have proposed inducing hospitals and physicians to switch to electronic medical records and giving patients a portable personal health record that could be transported on a card.

Links

• Congressional Budget Office Report (Options 46 and 47)