E-prescriptions can cut health care costs

Obama hasn’t released the details of his health plan yet, but his economic team and the House Democrats drafted up a $825 billion economic recovery plan — with more than $150 billion going to health care-related items! Among the highlights is a $20 billion provision to modernize health information technology systems. And serendipitously, a new report from Deloitte LLP, a consulting firm, shows that updating our information systems could really save us a lot of money!

Deloitte’s report outlines four main areas of focus to improve the U.S. health care system while reducing costs. And modernizing health care information technology is named as the the foundational focus for these money-saving reform ideas.

What exactly is health care information technology? According to Deloitte, health care information technology includes “e-prescribing, technology-enabled care coordination, and administrative cost efficiencies.” How will this technology reduce costs? “E-prescribing saves money and improves safety by addressing adverse drug events. It facilitates sharing of patient information across sites of care, reducing redundant paperwork and unnecessary tests.”

Deloitte estimates that if $50 billion over 5 years is devoted to health care information technology, that money could save as much as $90 billion over 10 years! The $20 billion provision in the draft economic recovery plan would certainly get things rolling.

Of course, the draft plan still faces a lot of challenges, especially during this economic downturn. And at The New Health Dialogue Blog, Paul Testa cautions that “there’s a tension between goals of a stimulus and the challenges of health reform. Economic stimulus requires spending money fast. Health reform will mean spending money smarter.”

Still, I’m happy to see that our elected officials are focusing on key health care-related projects in its economic recovery plan. After all, savings from an improved health care systems will help boost in many other areas of our economy too — which is why businesses big and small are getting behind health care reform. As Jason Rosenbaum puts it in the Now! blog, “If we can relieve the strain on businesses by providing quality, affordable health care to everyone at lower cost, we’ll be well on our way towards getting our economy back on track.”