PNHP.org - The increased computerization in U.S. hospitals has not made them cheaper or more efficient, Harvard researchers say, although it may have modestly improved the quality of care for heart attacks.

The findings, published in the online edition of the American Journal of Medicine, contradict claims by President Obama and many lawmakers that health information technology (health IT), including electronic medical records, will save billions and help make reform affordable.

“Our study finds that hospital computerization hasn’t saved a dime, nor has it improved administrative efficiency,” said lead author Dr. David Himmelstein, associate professor at Harvard Medical School and former director of clinical computing at Cambridge Hospital in Massachusetts. “Claims that health IT will slash costs and help pay for the reforms being debated in Congress are wishful thinking.”

The study uses data from the most extensive survey ever undertaken of hospital computerization. Data from approximately 4,000 hospitals for the years 2003 to 2007, including those on a list of the “100 Most Wired,” were analyzed for evidence of increased quality, cost savings or improvements in administrative efficiency.

The data came from the authoritative Healthcare Information and Management Systems Society (HIMSS) Analytics annual survey of hospital computerization; Medicare Cost Reports that virtually all hospitals submit annually to the Centers for Medicare and Medicaid Services (CMS); and the 2008 Dartmouth Health Atlas, which compiles CMS data on costs and quality of care.

Although the researchers found that U.S. hospitals increased their computerization between 2003 and 2007, they found no indication that health IT lowered costs or streamlined administration, even in the “most wired” institutions. While U.S. hospital administrative costs increased slightly, from 24.4 percent in 2003 to 24.9 percent in 2007, hospitals that computerized most rapidly actually had the largest increases in administrative costs. (By way of comparison, older studies have estimated administrative costs in Canadian hospitals at 12.9 percent).

The study found no evidence of lagged effects, e.g. lower costs in 2007 resulting from information technology introduced in 2003.

Modest quality gains were noted in the treatment of heart attacks (acute myocardial infarction) in more-computerized hospitals, but even these small improvements may merely represent better documentation rather than actual gains to patients.

Himmelstein said a report from the Congressional Budget Office in 2008 signed by Peter Orszag, now Obama’s budget director, expressed skepticism about claims by the RAND Corp. and others that health IT could generate $80 billion annually in savings.

“Part of the CBO’s skepticism was based on the limited information available to the RAND study and similar studies,” Himmelstein said. “But this new, detailed, national survey of diverse hospitals shows such doubts are well-founded. Information technology can’t rescue us from our national health care crisis.”

Dr. Steffie Woolhandler, professor of medicine at Harvard and study co-author, said several factors may explain why health IT has failed to reduce administrative costs.

“Any savings may have been offset by the costs of purchasing and running new computer systems,” she said. “In addition, most software is designed around the accounting and billing needs of hospitals, not the clinical side.”

Reference: “Hospital computing and the costs and quality of care: a national study,” David U. Himmelstein, M.D., et al. The American Journal of Medicine, Nov. 20, 2009 (online).