National Health Network Carries $200B Price Tag

The first rigorous assessment of the potential costs of the national health IT infrastructure and operation was recently released-and current health IT spending will be insufficient.

In a landmark paper released in the August issue of the Annals of Internal Medicine, a panel of experts determined a model for a national health information network in the United States and created a cost estimate for the project.

The estimate aims for a five-year time frame, an even more aggressive timeline than the 10-year timeframe put forth by President Bush last year.

According to the report, a fully operational national health information network would require $156 billion in capital investment over the next five years plus an additional $48 billion in annual operating costs.

The amount of capital investment, $156 billion, is roughly equal to 2 percent of annual health care spending.

/zimages/4/28571.gifNew legislation proposes awarding a half billion dollars a year for health IT—half in grants, half in loans. Click here to read more.

The report estimates that two-thirds of the cost will be for functionality while one-third will be for interoperability. After the initial investment, they expect that split to be more even.

The estimate is based on the inclusion of a wide range of functionalities including in-patient and ambulatory results viewing, in-patient and ambulatory electronic health record, in-patient and ambulatory computerized physician order entry (CPOE), electronic claims submission, electronic eligibility verification, secure electronic patient communication, and electronic prescription acceptance by pharmacies.

Currently, only electronic claims submission is in place for most health care providers. This has been due to pressure and expectations from payers such as health insurers and federal programs like Medicare.

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