A study by a private health care foundation identified options for public financing of health care information technology that could pay for itself within a decade.
If the federal government levied a tax on private insurance premiums and spent about $12 billion a year to subsidize and promote health IT, it could achieve net savings in future health care spending of about $88 billion over 10 years, according to the report from the Commonwealth Fund.
The report, “Bending the Curve: Options for Achieving Savings and Improving Value in U.S. Health Spending,” analyzes 15 steps the federal government could take to hold health care costs down over the next decade. The fund is a private foundation that aims to improve the effectiveness of health care, especially for low-income and uninsured people.
If all the proposed policies were adopted and a universal health insurance program were instituted, spending would be $1.5 trillion less than what the country would spend under the status quo, the report states.
The health IT proposal calls for putting the new revenues from a tax on insurance premiums into a dedicated fund that would finance health IT promotion by the federal Office of the National Coordinator of Health IT and by the states.
States would receive federal matching funds for programs directly assisting or subsidizing health care providers’ adoption of health IT, receiving $3 for every $1 the state invested. They also could receive $15 for every $1 for programs to promote development of health information exchange networks.
Priority should be given to safety-net, rural and small medical practices, the report states. “Assistance programs could emphasize interoperability, clinical quality improvement functions, and performance measurement and reporting,” it states.
If the federal government were to levy the tax and spend the money as suggested, it would cost $2.3 billion in the first year, but by the fourth year the government would see health care cost reductions that would increase in each succeeding year.
The net total savings to the federal government over 10 years would be $41.4 billion, the report states.
State and local governments also would see a reduction in their health care costs, amounting to $19.3 billion over 10 years. Households would save, too, avoiding paying out $27.2 billion over the decade.
Employers, who pay for the bulk of the country’s health care insurance, would pay somewhat more -- $200 million over 10 years -- but the analysis found that in the 11th year, they would save enough to realize a net savings over the entire period. The analyses were performed by the Lewin Group, a health care policy consulting firm.
The tax revenues would go into a fund for the health IT promotion program. If the money were not all spent -- as seems likely toward the end of the 10-year period -- it would be rebated to those who paid in, said Anthony Shih, one of the report's authors.
Health IT is by no means the most cost-saving option on the list. That honor goes to creating a Center for Medical Effectiveness and Health Care Decision-Making, which could save the national $368 billion over 10 years.
But the report states that health IT could be a foundation for carrying out some of the other options, including as the center for effectiveness.
The Commonwealth Fund’s Commission on a High Performance Health System will be evaluating the options in the coming months, aiming to develop a health care policy agenda for the country.
At a press conference, fund President Karen Davis said the recommendations that call for creating new federal agencies could be the most difficult to implement.
From the battlefield to the home front: Managing medical data
Government Health IT presents Col. Claude Hines Jr., program manager for the Defense Health Information Management System, in this recent InSight eSeminar. Col. Hines discusses the health information technology and tactical challenges faced by the military medical community in Iraq, Afghanistan and other areas of conflict. In doing so, he describes the current information technology solutions for transferring clinical data between battlefield care givers to health care personnel at military treatment facilities worldwide.
