Electronic Health Records Carry a High Price Tag

OCTOBER 01, 2005

The electronic health records initiative may require a price tag of >$200 billion initially to build and operate, according to a study reported in the Annals of Internal Medicine (August 2, 2005). Using current estimates, the health care industry alone will cover <20% of the cost. Lead investigator Rainu Kaushal, MD, said the findings suggest that "policy initiatives are needed if we are to close this gap."

As for who should pick up the difference, Dr. Kaushal does not believe that it should fall solely on the government. "I don't see them as having to foot the bill. They can create the incentives. Then the private sector can run with it," she said. For example, the federal government could increase reimbursements for physicians who use electronic health records for their Medicare and Medicaid patients. The reimbursement might motivate smaller physician groups to make the costly investment that is often needed for computer systems.

The transition to electronic health records is picking up speed, thanks to members of Congress, President George W. Bush, and the health care sector. The urgency prompted researchers to estimate how much it would cost.The researchers projected that it would cost $156 million to build the system and $48 billion annually to operate it.

National Coordinator for Health Information Technology David Brailer, MD, PhD, said that the government is aware of the hefty cost."We know it's in the billions of dollars, perhaps in the tens of billions of dollars, and possibly even the hundreds of billions. But the principal question is not how much it is. It's how do we create incentives to involve the private sector and prevent the federal government from financing it all. We want it to be market-driven," he said.