Information Technology:

Benefits Realized for Selected Health Care Functions

GAO-04-224: Published: Oct 31, 2003. Publicly Released: Oct 31, 2003.

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The rapidly rising costs of health care, along with an increasing concern for the quality of care and the safety of patients, are driving health care organizations to use information technology (IT) to automate clinical care operations and their associated administrative functions. Among its other functions, IT is now being used for electronic medical records, order management and results reporting, patient care management, and Internet access for patient and provider communications. It also provides automated billing and financial management. The Ranking Minority Member of the Senate Committee on Health, Education, Labor, and Pensions asked GAO to identify cost savings and other benefits realized by health care organizations that have implemented IT both in providing clinical health care and in the administrative functions associated with health care delivery. GAO analyzed information from 10 private and public health care delivery organizations, 3 health care insurers, and 1 community data network.

The 10 health care delivery organizations reported 13 examples of cost savings resulting from the use of IT, including reduction of costs associated with medication errors, communication and documentation of clinical care and test results, staffing and paper storage, and processing of information. Other benefits included improved quality of care, more accurate and complete medical documentation, more accurate capture of codes and charges, and improved communications among providers that enabled them to respond more quickly to patients' needs. All three insurers reported examples of reduced costs and other benefits resulting from improvements in electronic claims processing and the use of technology to enhance customer service. Benefits included increased staff productivity, improved timeliness in processing claims, improved customer satisfaction, and improved clinical care to members. One community data network established a regional exchange of health care data among physicians, hospitals, insurers, and others in the community, demonstrating that information can be exchanged securely and affordably while improving the quality and reducing the cost of health care. It expects to realize over $7 million in benefits for participating organizations. Other expected benefits include fewer admissions to the emergency department, reductions in staff time spent handling test results, and avoidance of test duplication.

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