The value of health care information exchange and interoperability

• HIT Description: Four levels of hypothetical health care information exchange and interoperability (HIEI): 1) Nonelectronic data, 2) Machine-transportable data, 3) Machine-organizable data, and 4) Machine-interpretable data. More info...
  
• Purpose of Study: Assess the value of electronic health care information exchange and interoperability between providers (hospitals and medical group practices) and independent laboratories, radiology centers, pharmacies, payers, public health departments, and other providers.
  
• Years of study: Not Available
  
• Study Design: Predictive cost-benefit analysis
  
• Outcomes: Projected roll-out cost and annual cost of HIEI and net economic value by HIEI level and stakeholders.
  

• Settings: The US health care system.
• Evaluation Method: Decision-analytic modeling of a conceptual framework describing how health care entities share information and created a functional taxonomy reflecting the amount of human involvement required, the sophistication of IT, and the level of standardization. The evidence were gathered by literature reviews, expert interviews, and estimates by an expert panel.
• HIT System: Four levels of hypothetical HIEI: 1) no use of electronic IT to share information (e.g., mail, telephone), 2) transmission of non-standardized information via basic IT, 3) transmission of structured messages containing non-standardized data, and 4) transmission of structured messages containing standardized and coded data.
• Strategy: Assumed a ten-year national implementation scenario: 20% of organizations would install systems in each of the first five years, incurring all acquisition and start-up costs in year 1, and maintenance costs in years 1 through 10.
• System Penetration: Assumed that all US providers would install new systems, using the Institute of Medicine's decision of minimal functional specifications for the electronic health records that would be required for HIEI Levels 3 and 4.
• Costs: All 2003 U.S. dollars. Level 2 HIEI is cost-free, while Level 3 and 4 will cost a total of $320 billion and $276 billion, respectively, for roll-out cost and $20.2 billion and $16.5 billion, respectively, for annual cost in steady-state. The cost estimates were broken down by clinician office system cost, hospital system cost, provider interface cost, and stakeholder interface cost.
• Benefits: o All 2003 U.S. dollars. o Net values of HIEI for Level 2 to 4 during the implementation years 1-10 are a savings of $141 billion, a cost of $34.2 billion, and a savings of $337 billion, respectively. During the steady state, the annual net values are $21.6 billion, $23.9 billion, and $77.8 billion, respectively, for Level 2 to 4. o Each year in the Level 4 steady state, providers benefit from connectivity with other providers, radiology centers, payers, and laboratories, totaling $45.2 billion, but lose money from connectivity to pharmacies (-$0.037 billion) and public health departments (-$0.98 billion). They incur annual costs of $10.5 billion to run the systems required, leaving them with an annual net savings of $33.7 billion. Payers realized $21.64 net value from improved efficiency of provider transactions and from avoided lab and radiology tests. Other organizations realize $77.8 billion net value from improved efficiency of provider transactions. o With 50% variations in model inputs, the sensitivity