Feud erupts over forecasts of health IT's long-term costs

A feud over the magnitude of health information technology’s potential benefits has erupted in Washington.

The feud pits the Congressional Budget Office, a respected and nonpartisan organization that crunches numbers for Congress, against the Rand Corp., an equally respected and nonpartisan organization that analyzes policy issues.

It began in May with the publication of CBO’s “Evidence on the Costs and Benefits of Health Information Technology.” That report was highly critical of an often-quoted Rand study published in 2005. Rand found that health care costs could be reduced by $80 million a year if health IT were adopted by 90 percent of the nation’s doctors and other health care providers.

The CBO study came to a different conclusion. “By itself, the adoption of more health IT is generally not sufficient to produce cost savings,” it said, adding that the future economic benefits of health IT are uncertain.

CBO also advised lawmakers not to rely on the Rand study, calling its methodology flawed and findings overstated.

Rand officials fired back with a letter to CBO Director Peter Orszag about “the errors in omission and interpretation within the CBO report associated with criticisms of the Rand study.”

The Rand officials said the analysis from their 2005 report was peer-reviewed, transparent and reviewed by a steering group of highly regarded professionals. In addition, they said, CBO’s report failed to offer an alternate method of measuring potential savings.

The letter was signed by Dr. Robert Brook, the Rand vice president who heads the health unit, and Richard Hillestad, a researcher who did much of the work on the 2005 report.

Orszag responded with a posting on his official blog standing behind the CBO report. “Our concerns are…based on the substance of the study itself — especially the questions it was designed to answer — and perhaps more importantly how it has been used in the policy debate,” he wrote in the blog.

CBO used scenarios that assumed current laws stayed in place, and Rand arrived at its estimate using a diffusion pattern for the health IT industry that has not been demonstrated in other industries, Orszag wrote.

In an appearance at the Healthcare Information Management and Systems Society Summit this month, the CBO director made it clear he is not entirely opposed to health IT. “By itself, it’s not a panacea,” but it could be a useful tool in health care reform, he said.

We know very little about the way to provide the best and most cost-effective health care, Orszag said. For example, he said, “we don’t know what best practices are, even at our leading medical centers.”

Health IT, if widely used, could produce data that would shed light on best practices and the relative effectiveness of different treatments, he said.

And if Congress were convinced that health IT was a good thing for the nation, he added, “we could get it done really fast” by requiring doctors who receive Medicare reimbursements — that is, virtually all U.S. doctors — to use it.

Maureen McKinney contributed to this story.

About the Author

Nancy Ferris is senior editor of Government Health IT.


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