The HIT Scam

Last week John Goodman posted a brief blurb about the latest problems with Health Information Technology (HIT). The issue deserves a little more attention because it is an abject lesson of how health policy always fails these days.

The articles from the New York Times and the RAND Corporation indicate that HIT has not lived up to expectations. Actually, it is quite a bit worse than that. The RAND piece is a sort of mea culpa for an earlier RAND “study” that predicted $81 billion in annual savings if we adopted HIT (the version I have said $77 billion, but what’s $4 billion between friends?) This RAND piece was the main rationale for spending over $20 billion (in two years) on HIT, but rather than saving money, HIT seems to have cost more money because it made it easier to bill for more services, according to the Times. It may also be creating more errors and inefficiencies in medical practice.


Round and around and
up and down we go. 

None of this should have some as a surprise. It was widely predicted four years ago when Congress was considering including HIT in the stimulus legislation. President Obama was quoted at the time as saying, “We will make the immediate investments necessary to ensure that within five years all of America’s medical records are computerized.” Mr. Obama may be forgiven his blind optimism, after all Newt Gingrich and Hillary Clinton had joined together to make similar promises.

But the people who actually knew something about this and were not lusting after a piece of the $20 billion piñata universally said the opposite — that a top-down bureaucratic system would not work very well and might actually cost more money and result in worse care.

Jerome Groopman, MD and Pamela Hartzband, MD, both on the faculty of Harvard Medical School, wrote in the Wall Street Journal that, “The basis for the president’s proposal is a theoretical study published in 2005 by the RAND Corporation (but) in the four years since the report, considerable data have been obtained that undermine their claims.” They call the proposal, “an elegant exercise in wishful thinking.” They add that the RAND researchers deliberately avoided looking at any negative information, saying, “We choose to interpret reported evidence of negative or no effect of health information technology as likely being attributable to ineffective or not-yet-effective implementation.”

And in the Washington Post, Stephan Soumerai and Sumit Majumdar wrote that Obama was making a “Bad Bet on Medical Records.” The first author was a professor at Harvard’s Medical School and the second was at the University of Alberta’s Medical School. They wrote that, “The benefits of health IT have been greatly exaggerated.” Specifically, they said, “Large, randomized controlled studies — the “gold standard” of evidence — in this country and Britain have found that electronic records with computerized decision support did not result in a single improvement in any measure of quality of care for patients with chronic conditions including heart disease and asthma.” And, they add, “Health IT has not been proven to save money.”

In the real world, the UK’s $12 billion effort to computerize medical records in the National Health Service was already falling apart, according to a report to Parliament. This was followed up a few years later by a candid admission by the government that it had wasted all the money and was closing down the program, as we reported here in a recent blog.

Even more modest efforts by our own government had already failed. The Veterans Administration spent $167 million to simply computerize its appointments system. This effort had “all but collapsed, and senior executives are worried about the repercussions it could cause on the Hill and in the White House, according to an internal memo obtained by NextGov (a trade publication).”

At the Department of Defense “top health officials lambasted the department’s central electronic health record system that manages patient files for millions of active duty and retired service members, saying it frustrates doctors because it crashes as often as once a week and generates duplicate records,” again, according to NextGov.The article goes on to quote the Deputy Surgeon General of the Air Forces as saying the system was, “slow, unreliable and so cumbersome that clinicians spend 40 percent of their time inputting data into the system, which is time spent away from patients.”

There was absolutely no evidence that this massive spending would succeed, and plenty that it would fail miserably, as we documented in a Research & Commentary piece for the Heartland Institute.

Now, even the editors of the Washington Post have come to agree the whole project was a fiasco — but only after we wasted $27 billion of taxpayer money.

Yet, those who are enriching themselves on the $27 billion are just happy as clams over the program. John Hoyt, the Executive Vice President of the Healthcare Information and Management Systems Society (HIMSS) was quoted in a recent Health Change Bulletin as saying −

This data suggests that the HITECH portion of the 2009 stimulus law is achieving its intended result of encouraging increased implementation and meaningful use of electronic health records among hospitals. Facilities…are laying the groundwork for interoperability to occur. Stage 6 and Stage 7 hospitals are fully prepared for provider-to-provider or facility-to-facility interoperability, as well as increasing the provider or facility’s ability to provide electronic health data reporting to public health and immunization registries to support population health review and syndromic surveillance.

There, aren’t you greatly reassured? By the way, the New York Times piece cited above reported that –

RAND’s 2005 report was paid for by a group of companies, including General Electric and Cerner Corporation, that have profited by developing and selling electronic records systems to hospitals and physician practices. Cerner’s revenue has nearly tripled since the report was released, to a projected $3 billion in 2013, from $1 billion in 2005.

No doubt the companies that paid for the RAND study are also members of HIMSS. And General Electric certainly has what might be called a “special” relationship with President Obama.

And so it goes in these days of crony capitalism.

Comments (32)

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  1. Robert A. Hall says:

    Gee, government intervention in this sector of the economy isn’t working? Who could have guessed? Isn’t central planning always better than the market? I will link to this from my Old Jarhead blog. (

    Robert A. Hall
    USMC 1964-68
    USMCR, 1977-83
    Massachusetts Senate, 1973-83
    Author: The Coming Collapse of the American Republic
    All royalties go to help wounded veterans
    For a free PDF of my 80-page book, write tartanmarine(at)

  2. Larry says:

    The move to HIT is very complex. We didn’t go from Alexander Graham Bell’s idea straight to the iphone. Nor did we go directly from the IBM mainframe to the iphone. Nor did we go directly from the Apple IIe to the iphone.

    We didn’t go from Model Ts to automated warehousing. We didn’t go from couriers on horseback to Fedex.

    Why do you think HIT won’t require evolution over time?

    I, too, am impatient with the current health care sector – hardly a system. But, patience is required for us to evolve health information technology and process to the levels we all expect and deserve.

    Unfortunately, left to its own devices the health industry was investing in more technology – the type that produced more tests and more procedures. It wasn’t pursuing more technology that would improve health and reduce procedures. They, afterall, were not interested in goring their own ox.

    They only wanted to gore someone else’s ox. And guess who’s ox they chose…ultimately the taxpayers.

  3. Devon Herrick says:

    Greg, this report confirms what an earlier report I co-authored found. Any system foisted upon a doctor or hospital is unlikely to be integrated effectively. If these systems solved a need that hospitals thought needed solved, then hospitals would integrate these systems, which would benefit both hospitals and patients. But, as we’ve long asked, why would a doctor or hospital install a system when it is not in their best interest to do so? Some of the waste that proponents hope will be eliminated by HIT is classified as revenue on hospital financial statements. Moreover, some of the errors supporters hope will be avoided may actually be exacerbated by new ones that result from added complexity of having to ignore the patient while you struggle with a computer screen.

    Earlier in the week I was visiting a friend who is a nurse practitioner. She said the new HIT system in her office was the biggest pain. She claimed that she could have seen 10% — maybe 15% more patients that day if she didn’t have to struggle with the HIT system. A simple exam wasn’t too hard to record. But for someone with complex needs, the time it took to review previous visits; and record the current exam, was too time-consuming. Her productivity was drastically reduced. I doubt if she’s the only one who has experienced this problem.

  4. Ken says:

    Great post, Greg.

  5. John Goodman says:

    This is from today’s Kaiser Health News:

    Colorado Public Radio’s Eric Whitney, working in partnership with Kaiser Health News and NPR, reports: “The good news: Colorado is working to help kids stay current with their immunizations and has a computerized registry where any provider who gives a child a vaccine can report that information. The bad news: The state’s computer system is not compatible with most of the computer systems doctors use, so many practices don’t update the central database because it’s just too much extra work, according to Dr. Allison Kempe, a researcher at the University of Colorado” (Whitney, 1/22).

  6. Greg Scandlen says:

    Larry asks, “Why do you think HIT won’t require evolution over time?”

    It certainly will and that is the whole point. If the government had set standards based on Bell’s original telephone and required every one to follow THOSE standards and no others, we would still be stuck with crank model phones.

    Evolution of technology requires that the industry be free to evolve.

  7. Gabriel Odom says:

    The logical fallacy here is that all EHRs are created equal. A basic principle in economics is that one cannot compare goods unless those goods are nearly identical. When the Ford Pinto was recalled in 1978, no one in their right mind clamoured for all cars to be recalled. If certain EHRs fail to live up to expectations, then place the blame where it belongs – on those EHRs.

    Of the 40+ percent of hospitals and doctor offices live on EHRs in the U.S., more than half of them are “best of breed” users. This means that the hospitals or doctor offices have the best endoscopy program, the best inpatient pharmacy program, the best outpatient pharmacy program, the best perfusion program, the best ICU documentation program, the best surgeon note program, the best hospital billing, the best professional billing, and many more. The problem here is that these programs were all designed by different companies – and they were not designed to share information. This causes duplicate records, lag time for system-to-system interfaces, and a very steep learning curve for anyone who has to use more than one system.
    Now consider the opposite: Kaiser Permenente doesn’t use a “best of breed” set up – they have one EHR for all of their hospitals, doctor offices, and clinics. This means that when a heart risk patient goes for a check up at their doctor’s office, the doctor uses one electronic record for the patient. The pre-op nurse sees the same record, including all of the provider’s notes and patient vitals for the past few years and any prior surgeries. The anaesthesiologist sees the same information, including allergies and surgeon op notes from past surgeries. The surgeon can write the H&P in the same record. The intra-op nurse documents all the used supplies in the same record – which sends automatics updates to the Materials Management office. The hospital billing office sees all this documentation as well, and can send a bill to the insurance immediately.

    When we talk about the costs and minimal savings of some EHRs, take care not to compare apples and oranges. Connected and fully integrated EHRs (HIMSS Stages 6 and 7), do save the hospital time and money.

  8. S. Silverstein MD says:

    I’ve been making many of these predictions for 15 years now. See and

    Healthcare IT needs a makeover, via firm application of the same rigor that applies to pharma and medical devices.

    The marketing hype must go.

  9. DoctorSH says:

    Cronyism in this example is more like Fascism.
    Govt healthcare is partnering?? with big corporations for the takeover of the system. The corporations are happy now but won’t be when the govt goes after them. It will start with the blame game and advance from there.
    Very sad for patients.

  10. Andrew O says:

    I’m all for more awareness and action on HIT…let the industry evolve!

  11. Regina Herzlinger says:

    HIT is not the problem. Rather, in the absence of a managerial infrastructure — teams with shared missions, accountability, bundled payments — IT is a waste of time.

    With these other ingredients in place, IT is an important and useful tool, as the rest of the economy shows.

  12. Roland D. Freeman says:

    You are such a marvelous writer that I’m jumping at the chance to make a small suggestion. I know it’s an abject subject (and result) but I would propose object lesson as the standard phrasing for such punishment.

    Knowing how your mind works, you probably meant to twist the familiar into a new nuance of meaning.

  13. john peterson says:

    The EMR is a costly exercise and results in lower efficiency, higher costs and declining job satisfaction. All done without the consent of the governed.

  14. Vicki says:

    Clever song pairing.

  15. David Hogberg says:

    I’m guessing here, but chances are electronic records tend to mirror the nature of the industry. If the industry is one that strives for efficiency, then players in that industry will adopt ERs that make them more efficient. On the other hand, if the industry is like health care, then the ERs will only add to the inefficiency. The proponents of ERs in health care mistook the effect for the cause–i.e., they seemed to believe that it was ERs that made other industries efficient. Seems to be a lot of that in health care policy: people who have health insurance are healthier because they have health insurance, etc.

  16. Policy Wonk says:

    Patient safety should be a concern — I know that from personal experience.

    Last June a hospital in my area installed a new EMR system. I had surgery at that hospital shortly after it was installed. After my surgery, the “system” would not let the humans running the system supply pain medication to me for 2 hours after my surgery. Eventually they found that someone somewhere in the hospital had put a wrong code in the system. It took about 5 people working for 2 hours to fix it and supply me with pain medication. So much for the benefits of EMRs.

    In my opinion, the system should not override the human operators.

  17. Greg Scandlen says:

    David Hogberg–

    Your comment reminds me of the adoption by the army of the black beret. For years these had been worn by Special Forces. Army brass, esp, General Shinseki, noticed that the Special Forces had high morale so they decided that having the entire army wear black berets would raise the morale of the entire force. They must have figured that the beret was causing the morale. Of course, Special Forces immediately adopted tan berets and morale in the rest of the army did not improve. See

  18. Brian Williams. says:

    Great post, Greg. Everyone outside of healthcare has figured out electronic records.

    When I go to change the oil in my car, the mechanic scans a little barcode inside my door. On his computer appears information about the last time I changed my oil, the recommended oil weight, the entire service history for my vehicle, and numerous Toyota service recommendations. He sends me e-mails reminding me about changing my oil and includes coupons and other incentives to keep my business. My mechanic recently sent me an e-mail about winter maintenance tips.

    Car mechanics have figured out HIT for cars. Why can’t doctors? My doctor still uses manila folders and clipboards.

  19. S. Silverstein MD says:

    Brian Williams,

    Why not have your car mechanic provide your medical care? Medicine must be as easy and simple as every other field, right? Do you have a clue how offensive what you write is to anyone who’s spent the requisite years to learn how to take care of the complex problems that occur when, say, that auto crashes and the driver sustains multiple injuries and is in an ICU with a tangle of IV’s and tubes and lines?

    Clinical computing and business computing are quite different, because medicine is not like ‘any other business.’

  20. Brian Williams. says:

    Thank you, Dr. Silverstein. The point is not to compare doctors with auto mechanics. Even if it were, I hope it wouldn’t be offensive.

    I can’t change my own oil, or draw my own blood for that matter, so I have high regard for both doctors and auto mechanics. One of them asks me to fill out duplicative paperwork every time I visit. I’ve lost count how many times he has asked for my name and DOB. The other one has figured out a way to computerize those records.

  21. L. BRODY, M.D. says:

    Greg, nice article. My belief from the beginning is that government databases will be used to regulate and control physicians, hospitals and anyone who gets their money. The use of information systems is changing what used to be the doctor patient relationship, to the doctor~database~ hospital~insurance intermediary ~government/payor
    flow of information, and the flow backwards of money. The patient is out of it, as many pay nothing except an insurance premium, co-pay or token amount. My experience as a physician, on Commissions with businessmen, reminds me of statements made by businessmen, that they will make doctors and hospitals suppliers, like buying metal and nuts and bolts, and service contracts, and I think it is being accomplished.
    Many physicians I visit these days have their nose in a computer and rarely address patients, eyeball to eyeball. It is different, and I agree health information technology will not be the panacea.

  22. Greg Scandlen says:

    A friend sent me this. Can IT save costs? Of course it can, but this NBER work suggests that it has to come out of local cultures — not imposed from on-high.

    Does Health Information Technology Reduce Costs?

    Over time, complementary IT skills are expected to become more widely available, and the various components more widely deployed. If so, more hospitals will enjoy the benefits of EMR and it may yet fulfill its promise.

    Some analysts have suggested that the adoption of electronic medical records (EMR) by hospitals could eventually reduce annual U.S. healthcare expenditures by one third or more. Others have been far less sanguine about such projections, arguing that adopting such information technologies may in fact increase costs.

    In The Trillion Dollar Conundrum: Complementarities and Health Information Technology (NBER Working Paper No. 18281), David Dranove, Christopher Forman, Avi Goldfarb, and Shane Greenstein analyze data from 1996-2009 on thousands of U.S. hospitals and their use of EMR. They find that, on average, EMR adoption appears to be associated with higher costs. However, drawing on principles developed for the study of productivity in business computing, they show that adoption of EMR yields different outcomes over time, across locations, and across hospitals. For example, adoption of both basic and advanced EMR is initially associated with a rise in costs, but longer-term cost effects vary. After three years, hospitals in IT-intensive locations experience a 3.4 percent decrease in costs. Hospitals in other locations continue to experience an increase in costs, even after several years. Hospitals that had employed IT staff to work on older generations of software also enjoyed cost reductions relative to their less “IT-savvy” peers.

    These results suggest that the principles for effective implementation of other types of business computing apply to the adoption on EMR: it takes time to be effective and it is most effective when implemented by people with prior experience with the technology. Moreover, as more and more communities become IT-rich and more hospitals become IT-savvy, EMR may generate greater savings.

    The authors write: “While EMR’s past mixed performance is no guarantee of a future result, the past experience also is no guarantee of future failure. Over time, complementary IT skills are expected to become more widely available, and the various components more widely deployed. If so, more hospitals will enjoy the benefits of EMR and it may yet fulfill its promise.”

    –Matt Nesvisky

  23. S. Silverstein MD says:


    The writers of “Does Health Information Technology Reduce Costs?” neglect one major point in their view that “over time, complementary IT skills are expected to become more widely available, and the various components more widely deployed. If so, more hospitals will enjoy the benefits of EMR and it may yet fulfill its promise.”

    The assumption is that the “components” are all good, and the problem is in the deployment.

    See for an example of bad health IT, performed by a computer scientist.

    To those who ignore or downplay this issue – let’s hope you or your family member is not the one who experiences the drawbacks of poor software engineering prevalent in health IT today.

  24. S. Silverstein MD says:

    (note – The full study whose summary I referenced above is available at , “A study of an Enterprise Health information System”).

  25. Paul Nelson, M.D. says:

    I am aware that the original RAND study may have been funded by two large EMR software companies. Does anyone know if that is true, for sure? If so, I think the IOM folks may have been duped.

  26. James G Knight MD says:

    As am means of storing and displaying on demand a huge amount of complex information, HIT may have an upside eventually… the problem I see is that it is forcing a lot of very highly trained health care providers into the job of data input, and diverting their time and talant away from taking care of patients.
    Daily I see EMRs on patients reporting a myriad of normal physical exam findings or a hypercomplete, negative review of systems that was spit out by a built-in template that no doubt allows significant upcoding. All this serves to obscure the more important/ legitimatly obtained information about the serious illnesses I am trying to figure out?
    An electronic medical record would have evolved in a more rational fashion in a free market; but the government “experts” were looking for a quick solution in all the wrong places…voila!

  27. Hal Dall, MD says:

    The EMR input requirements transform full-fledged doctors back into 3rd year “clerks”.

  28. Life of Pi says:

    The focus surrounding HIT, to this point, has been on the supply side. But I feel that HIT has its best potential on the demand side. We should empower the patient with smart health-apps, doing so, empowers them to take ownership over their own care. Big data is all the buzz these days, equally, individual health data could also hold promising potentials.

  29. James R Chaillet, Jr. ,MD says:

    Amid all the complaining about EHRs, most of which is legitimate I feel one real concern gets overlooked. That is the distraction which the EHR becomes for the physician, such that it can interfere with the doctor-patient communication and interaction.

    Unless a physician is on his/her guard or has learned through experience to make the EHR documentation somewhat secondary, the physician can be more focused on documentation, “filling in the required blanks” than in hearing the patient’s story – his/her complaint,concern, what’s working, what’s not working and in asking as many of the right questions as one can ask and get answering in 10-15 minutes (or is it 5-10 minutes?)

    I try to resist the urge to start documenting, ie clicking the mouse, until I’ve at least listening for a couple of minutes, but it is hard.

  30. Michael Chen, MD says:

    Dr. Chaillet brings up a great point, and that is, EHR design MUST revolve around the doctor’s workflow. That is one very important aspect of patient safety regarding HIT that has been severely neglected and remains a major issue regarding satisfactory adoption of HIT. The unfortunate reality is that EHRs were built around billing and designed from a practice management standpoint, relegating clinical documentation as an afterthought. Thus, we have two negative consequences… 1) the most important person inputing the data (the physician) has to “re-learn” how to do their own clinical practice to “adjust” to the new system. At best, their workflow and productivity is reduced. At worst, they become a hazard to patient safety as they are not as focused on the patient that as they were previously.
    2) the data coming out of the system is only as good as the data coming in. If physicians are not documenting accurately, pertinently, or throughoughly, the data coming out of these systems are suspect and quite useless.

    My second point here that hasn’t been mentioned is that along the lines of patient safety, what “should” have been the primary emphasis of HIT optmization is not the adoption of EHRs (which I believe should take it’s time and really geared towards physican usage and safety) but rather the development of an HIT network that is secure and establishing standards so that all EHRs, irregardless of type and model, can speak to one another. This is an utter disaster right now.

    This is analogous to having the government encouraging everyone to buy a car but there are no highways to drive the car on safely and quickly. We spent all our wasted efforts (time, money) on the car (EHRs) but no public domain to allow the car the drive (the network). So now we have an increased monopolization of the market where only a few EHRs will exist, don’t talk to each other, and in the end, the real technological benefits of HIT will never be realized.

    I speak more about this on my blog at

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