This is the accessible text file for GAO report number GAO-04-224 entitled 'Information Technology: Benefits Realized for Selected Health Care Functions' which was released on October 31, 2003. This text file was formatted by the U.S. General Accounting Office (GAO) to be accessible to users with visual impairments, as part of a longer term project to improve GAO products' accessibility. Every attempt has been made to maintain the structural and data integrity of the original printed product. Accessibility features, such as text descriptions of tables, consecutively numbered footnotes placed at the end of the file, and the text of agency comment letters, are provided but may not exactly duplicate the presentation or format of the printed version. The portable document format (PDF) file is an exact electronic replica of the printed version. We welcome your feedback. Please E-mail your comments regarding the contents or accessibility features of this document to Webmaster@gao.gov. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. Because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately. Report to the Ranking Minority Member, Committee on Health, Education, Labor, and Pensions, U.S. Senate: October 2003: INFORMATION TECHNOLOGY: Benefits Realized for Selected Health Care Functions: GAO-04-224: GAO Highlights: Highlights of GAO-04-224 a report to the Minority Member, Committee on Health, Education, Labor, and Pensions, U.S. Senate Why GAO Did This Study: The rapidly rising costs of health care, along with an increasing concern for the quality of care and the safety of patients, are driving health care organizations to use information technology (IT) to automate clinical care operations and their associated administrative functions. Among its other functions, IT is now being used for electronic medical records, order management and results reporting, patient care management, and Internet access for patient and provider communications. It also provides automated billing and financial management. The Ranking Minority Member of the Senate Committee on Health, Education, Labor, and Pensions asked GAO to identify cost savings and other benefits realized by health care organizations that have implemented IT both in providing clinical health care and in the administrative functions associated with health care delivery. GAO analyzed information from 10 private and public health care delivery organizations, 3 health care insurers, and 1 community data network. What GAO Found: The 10 health care delivery organizations reported 13 examples of cost savings resulting from the use of IT, including reduction of costs associated with medication errors, communication and documentation of clinical care and test results, staffing and paper storage, and processing of information. Other benefits included improved quality of care, more accurate and complete medical documentation, more accurate capture of codes and charges, and improved communications among providers that enabled them to respond more quickly to patients’ needs. A few examples are noted in the chart below. [See PDF for image] [End of figure] All three insurers reported examples of reduced costs and other benefits resulting from improvements in electronic claims processing and the use of technology to enhance customer service. Benefits included increased staff productivity, improved timeliness in processing claims, improved customer satisfaction, and improved clinical care to members. One community data network established a regional exchange of health care data among physicians, hospitals, insurers, and others in the community, demonstrating that information can be exchanged securely and affordably while improving the quality and reducing the cost of health care. It expects to realize over $7 million in benefits for participating organizations. Other expected benefits include fewer admissions to the emergency department, reductions in staff time spent handling test results, and avoidance of test duplication. www.gao.gov/cgi-bin/getrpt?GAO-04-224 To view the full product, including the scope and methodology, click on the link above. For more information, contact David Powner at (202) 512-9286 or pownerd@gao.gov. [End of section] Contents: Letter: Appendix: Appendix I: Use of Information Technology for Selected Health Care Functions: Letter October 31, 2003: Senator Edward M. Kennedy Ranking Minority Member Committee on Health, Education, Labor, and Pensions United States Senate: Dear Senator Kennedy: According to the Institute of Medicine and others, health care is an information-intensive industry that remains highly fragmented and inefficient. Hence, the use of information technology (IT) in delivering clinical care and performing administrative functions has the potential to yield both cost savings and improvements in the care itself. You asked us to identify cost savings and other benefits realized by health care organizations that have implemented IT both in providing clinical health care and in the administrative functions associated with health care delivery. To identify monetary and other benefits resulting from the use of IT, we reviewed available literature and consulted with experts in the academic and professional community about electronic medical records and about cost savings and other benefits that have been reported by health care organizations. We identified key clinical health care and administrative functions for which IT is used and then identified health care organizations recognized in the health care community that could provide data to demonstrate cost savings and other benefits realized from implementing IT. We obtained and analyzed data reported by 10 private and public health care delivery organizations, 3 health care insurers, and 1 community data network. We conducted our work from October 2002 through August 2003 in accordance with generally accepted government auditing standards. On October 8, 2003, we provided your office with a briefing on the results of this review, which is included as appendix I. The purpose of this letter is to provide the published briefing slides to you. In brief, we identified 20 examples of IT initiatives that resulted in reported cost savings or other benefits--13 at health care delivery organizations, 6 at insurers, and 1 at a community data network. The participating organizations also discussed some important lessons they learned from implementing IT solutions. For example, a 1,951-bed teaching hospital serving urban, rural, and international populations reported that it realized about $8.6 million in annual savings by replacing paper medical charts with electronic medical records for outpatients. It also reported saving over $2.8 million annually by replacing its manual process for handling medical records with electronic access to laboratory results and reports. Additionally, a 350-bed community hospital serving a rural population prevented the administration of over 1,200 wrong drugs or dosages and almost 2,000 early or extra doses by using bar code technology and wireless scanners to verify both the identities of patients and their correct medications. The reported monetary value of the errors prevented was almost $850,000. IT also contributed to other benefits, such as shorter hospital stays, faster communication of test results, improved management of chronic disease, and improved accuracy in capturing charges associated with diagnostic and procedure codes. For example, a large integrated health care delivery system serving an urban population reported improvements in diabetes control, decreases in upper gastrointestinal studies ordered, and increases in Pap smears performed. Most organizations also reported lessons learned, such as the importance of reengineering business processes, gaining users' acceptance of IT, providing adequate training, and making systems secure. We will send copies of this report to other congressional committees; to the private sector organizations that participated in our review; and to the Secretaries of Defense, Health and Human Services, and Veterans Affairs. In addition, the report will be available at no charge on the GAO Web site at http://www.gao.gov. If you have any questions about this report, please contact me at (202) 512-9286 or M. Yvonne Sanchez, Assistant Director, at (202) 512-6274. We can also be reached by e-mail at pownerd@gao.gov or sanchezm@gao.gov. Niti Bery, Joanne Fiorino, Pamlutricia Greenleaf, M. Saad Khan, Jessica Steele, and Teresa F. Tucker were major contributors to this report. Sincerely yours, David A. Powner Director, Information Technology Management Issues: Signed by David A. Powner: [End of section] Appendixes: Appendix I: Use of Information Technology for Selected Health Care Functions: [See PDF for image] [End of figure] [End of section] (310458): GAO's Mission: The General Accounting Office, the investigative arm of Congress, exists to support Congress in meeting its constitutional responsibilities and to help improve the performance and accountability of the federal government for the American people. GAO examines the use of public funds; evaluates federal programs and policies; and provides analyses, recommendations, and other assistance to help Congress make informed oversight, policy, and funding decisions. GAO's commitment to good government is reflected in its core values of accountability, integrity, and reliability. Obtaining Copies of GAO Reports and Testimony: The fastest and easiest way to obtain copies of GAO documents at no cost is through the Internet. GAO's Web site ( www.gao.gov ) contains abstracts and full-text files of current reports and testimony and an expanding archive of older products. The Web site features a search engine to help you locate documents using key words and phrases. You can print these documents in their entirety, including charts and other graphics. Each day, GAO issues a list of newly released reports, testimony, and correspondence. GAO posts this list, known as "Today's Reports," on its Web site daily. The list contains links to the full-text document files. To have GAO e-mail this list to you every afternoon, go to www.gao.gov and select "Subscribe to e-mail alerts" under the "Order GAO Products" heading. Order by Mail or Phone: The first copy of each printed report is free. Additional copies are $2 each. A check or money order should be made out to the Superintendent of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or more copies mailed to a single address are discounted 25 percent. Orders should be sent to: U.S. General Accounting Office 441 G Street NW, Room LM Washington, D.C. 20548: To order by Phone: Voice: (202) 512-6000: TDD: (202) 512-2537: Fax: (202) 512-6061: To Report Fraud, Waste, and Abuse in Federal Programs: Contact: Web site: www.gao.gov/fraudnet/fraudnet.htm E-mail: fraudnet@gao.gov Automated answering system: (800) 424-5454 or (202) 512-7470: Public Affairs: Jeff Nelligan, managing director, NelliganJ@gao.gov (202) 512-4800 U.S. General Accounting Office, 441 G Street NW, Room 7149 Washington, D.C. 20548: