Health and Human Services' Estimate of Health Care Cost Savings Resulting from the Use of Information Technology

According to the Institute of Medicine and others, the U.S. health care delivery system is an information-intensive industry that is complex, inefficient, and highly fragmented, with estimated spending of $1.7 trillion in 2003. The Institute of Medicine has called for transformational change in the health care industry through the use of health information technology (IT) to improve the efficiency and quality of medical care. As a regulator, purchaser, health care provider, and sponsor of research, the Department of Health and Human Services (HHS) has also been working over the years to promote the use of IT in public and private health care settings. We are currently working to provide Congress with an overview of HHS's efforts to develop a national health IT strategy, identify lessons learned from the Departments of Veterans Affairs and Defense regarding their use of electronic health records (EHR), and identify lessons learned from international efforts to modernize national health IT infrastructures. As part of this ongoing work, Congress asked us to review how a recent HHS estimate of cost savings from the adoption of IT was derived and what portion of these savings are projected for the federal government.