US healthcare IT spending increasing,
Citing industry analysts Sheldon I Dorenfest &
Associates, the American Hospital Association (AHA) says healthcare IT
expenditure is on the increase, with nearly $31 billion spent in 2006
compared with $19 billion in 2000. Furthermore, this growth is set to
continue, fueled by purchases of picture archiving and communications
systems, as well as computerized provider order entry systems.
The AHA’s report challenges the view that healthcare organizations spend
much less on IT than other industries, referencing two studies that both
compared healthcare IT expenditures as a percentage of revenue, with a
corresponding metric for the banking and financial services industry. In
2001, banking and financial services spent about 5% to 6% of revenues on
IT, compared with 3% to 4% for healthcare organizations.
More current data from a Modern Healthcare/PricewaterhouseCoopers annual
survey of hospital executives indicate that the typical healthcare
organization allocates 2.5% of the operating budget to IT. Senior
hospital executives responding to the Modern Healthcare 2005 survey
indicated their primary near-term IT priority to be the electronic
health record (EHR).
A key impetus in the increased interest in EHR was the 2004 pledge by
President Bush to establish an interoperable system of health records
within a decade, and the appointment of the first national coordinator
of health information technology to oversee the process. The total
national cost of introducing this system has been estimated at $276
billion to $320 billion over 10 years.
The cost to a medium-sized hospital has been estimated at $2.7 million
initially and then $250,000 per year. Annual savings achievable with a
full-operating system have been estimated at $77.8 billion nationally
and $1.3 million for a medium-sized hospital.
The AHA claims that advances in technology have transformed patient
care, particularly in the shift from inpatient to outpatient settings
and in the development of less invasive diagnostic and therapeutic