The new Administration has listed health care as one of the top seven priorities in the American Recovery & Reinvestment package. There is over $19 billion earmarked to advance Health Care Information Technology (HIT) alone, money which is expected to provide a return on investment as health care systems become increasingly efficient and costly medical errors are avoided.  The Department of Health and Human Services alone offers over 300 programs and has an overall budget of over $700 billion. They are actively seeking to accelerate the adoption of HIT and the use of electronic health records.  To achieve this goal, they must rely on being able to find the right contractors to meet their needs: Standards, Best Practices, Reviews, Management Consulting and IT Support, IT Security and Privacy, IT Infrastructure Consolidation and Software Standardization… the list goes on.  

President Obama campaigned on expanding access to health care. His commitment to the cause continues, but the focus has shifted. In his March 5^th Health Care Summit, he specifically equated health care reform with cutting health costs.

The summit was marked by a feeling of solidarity and bipartisan good will, and why not? Here is an effort no one wants to see fail: as Obama himself put it, “what better cause for us to take up? Imagine the pride when we go back to our constituencies next year and say ‘you know what? We finally got something done on health care.’ “

But while he still pledges to expand coverage to all Americans, his stated priority is to lower costs.  Figures from the Kaiser Family Foundation illustrate how fast those costs have been going up: In 1999, families spent $5,791 on health insurance premiums and a single person paid $2,196. Last year, those figures were $12,680 for families and $4,704 for individuals.

The president is selling his package for health reform on the promise that it will directly save Americans money. To that end, while health information technology (HIT) investment is expected to improve quality, it must also demonstrate that costs can be reduced—that investment in HIT projects will result in a system that operates more efficiently and can garner proven, measurable savings.

Politically, especially during a recession, it is easier to make the case for a program that reduces the cost of care.  A recent Wall Street Journal/NBC News poll supports Obama’s approach: More people are more interested in reducing costs than expanding coverage.

Skepticism abounds regarding the return-on-investment from the $19 billion HIT budget in the President’s stimulus bill. One blogger likened the investment to handing out computers to students rather than addressing problems in the education system: throwing technology at a problem doesn’t necessarily achieve anything.

It seems clear that those wishing to participate in HIT initiatives must be able to demonstrate how they will not only improve the quality of existing systems, but contribute substantially to reducing costs as well. Providing solid analysis of cost-cutting economic returns will be key in winning support for HIT investment, even if such returns need to be captured over a long period.