US-wide EHRs priced at $150 billion

The full implementation of a digital US healthcare system, with integrated networked electronic health records (EHR) in all US doctors’ offices and hospitals, has been estimated as costing around €97 billion ($150 billion) over eight years.

The figure was suggested by Robert Miller, a professor of health economics at the University of California, San Francisco, according to a report by Government Health IT.

Prof. Miller called for hospitals to spend €22.6 billion ($35 billion) to acquire and expand EHR systems and $55 billion in new operating costs over eight years. He said this level of spending would bring hospitals’ IT spending closer to that of other industries.

He said the €97 billion ($150 billion) estimate sounded like a large sum but was “manageable” as it represents less than a 1% of total US annual health care spending.

He said hospitals are further along the path toward implementing clinical information systems, partly because they get some boosts in revenues when they install EHRs.

He was also reported to say that large hospital organisations and hospital investors increasingly see IT as an expected cost of doing business. Prof. Miller said that less well funded public and small hospitals and some highly leveraged for-profit hospitals are likely to lag behind.

According to recent figures in the New England Journal of Medicine fewer than 5% of US family doctors are yet using fully functional EHRs. To equip the remaining 96% with EHRs will cost about €10 billion ($15 billion) in capital outlays and €15.5 billion ($24 billion) in new operating costs, he said.

On top of these costs he said another €13 billion ($20 billion) would be needed to provide for EHRs in nursing homes and the offices of other medical professionals, bringing the total to around €97 billion ($150 billion).

According to the Government Health IT report Prof Miller also suggested the actual total resource needed could be as low as €64.6 billion ($100 billion) or less because of offsetting increases in medical revenues and other factors.

Previous estimates of the cost of introducing EHRs across the US healthcare system have been lower. In 2005 the Rand Corporation reported in 2005 that the total cost over 15 years would be €74 billion ($114 billion), with EHRs paying for themselves.