Does health information technology save money? How?
The RAND Corporation has estimated that implementing clinical and administrative HIT systems will save the health system $162 billion annually, and an industry group has estimated savings of $78 billion per year after a 10-year implementation period. Paper administrative costs can be as high as 20ยข per $1, yet the health care sector spends only 2 percent to 3 percent of revenue on information technology, compared to double-digit investments in retail and groceries, for example. Since health spending represents one-fourth of most state budgets, any savings will be important. The savings result from administrative efficiencies and lower costs in filing and processing claims, improved care, better prescription safety, fewer redundant tests and treatments due to better documentation, better use of preventive services, and chronic disease management. Not everyone agrees that savings will materialize. Proponents hope that better care over the long-term will lead to lower costs, but critics p
