HIEs would lead to $3.1B annual reduction in US spending, study finds

A national effort to implement health information exchanges would cut billions in Medicare spending, according to recent research out of University of Notre Dame (Ind.) and UC San Francisco.

Idris Adjerid, PhD, and Corey Angst, PhD, both IT professors in the Notre Dame Mendoza College of Business, and Julia Adler-Milstein, PhD, a health IT expert at UCSF, authored the study, to be published in the journal Information Systems Research.

For the study, the three researchers compared the average Medicare spending per beneficiary between 2003 and 2009 in healthcare markets with an operational HIE to those without an operational HIE. Their statistical models accounted for differences in healthcare infrastructure, hospital quality, health IT adoption and patient demographic factors.

The researchers concluded the healthcare markets with HIEs saw significant cost savings of an average of $139 per Medicare beneficiary per year. They extrapolated this finding onto a national scale, and, based on this data, found the federal government would experience a $3.12 billion annual reduction in spending if HIEs were implemented nationally.

However, they also noted healthcare markets in which providers had financial incentives to use an HIE saw the largest reductions in spending. They also noted HIEs that had been established for longer periods of time were more effective.

"Not all healthcare markets see the same amount of reduced spending from HIEs," Dr. Adjerid said. "Policymakers and healthcare entities need to ensure that financial incentives align with the goals of HIEs and give them sufficient time to mature before expecting promised value."

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