By Casey Quinlan. In my daily business life, I have lots of conversations about healthcare IT (HIT), electronic medical records (EMR), personal health records (PHR), and the rest of the alphabet soup of acronyms used in health care’s march into the 21^st century. Each of those conversations always winds up leading to the same question, “what’s the ROI?” Meaning what’s the expected financial benefit to the provider deploying the technology.

This is most definitely a valid question – any enterprise looking at a technology product or service needs to have a solid understanding of what the business results of that technology can be, and what the cost of those results will be. Also, the likelihood of those results actually showing up is important: what’s the track record of the system or service on offer?

Here’s where the ROI question falls short of the mark in the current health care landscape: results become all about revenue. This is a particularly sticky question in health care, given that, outside of large health systems like Kaiser Permanente or the Veterans Administration, health care IT has been more about managing information and data flow within a closed system than about sharing information with patients, other providers, or payers.

The Patient Protection and Affordable Care Act (PPACA, or as it’s known in arguments across the US, “health care reform”) is the best attempt yet to get everybody in health care – from major hospitals to urgent care centers, from Park Avenue ob/gyns to free clinics – into the EMR pool. The carrots driving adoption are meaningful use incentive payments. The sticks are lower reimbursement schedules for failing to adopt EMR or to achieve that meaningful use.

Looking for strictly financial ROI in this landscape is almost impossible – there isn’t enough data yet to make any accurate statements about what the return, in dollars, might be. Vendors make promises, but anyone who’s been involved in a large-scale IT implementation knows that projects take a big commitment in time and treasure, and can often stretch far beyond the original scope of the project.

The ROI on EMR won’t be visible until EMR systems have been in wide use for at least two years within a provider organization. It will take another two years to see how the creation of state, regional and national health information exchanges (HIEs) return results in time or money.

A better question for HIT in its current state is, “what will it cost to do nothing?” I don’t just mean not getting the meaningful use stimulus payments – I mean the cost to health care providers who don’t adopt EMRs, or who don’t join up with state and regional HIEs as they come online.

The push to repeal PPACA that started when the balance of power in Congress shifted after the 2010 election risks making health care worse, not better, if repeal leads us back to Square 1. Health care – all parts of the process: providers, patients, and payers – has a stake in creating a better system. From Square 1, looking for the ROI on technology that can create that better system is only half the question.

What will it cost to do nothing? The answer to that question shows the way forward.

This entry was posted on Wednesday, February 23rd, 2011 at 9:20 am and is filed under Cost, Health Reform, HIT/Health Gaming, Technology. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.