Clinical research study
Hospital Computing and the Costs and Quality of Care: A National Study

https://doi.org/10.1016/j.amjmed.2009.09.004Get rights and content

Abstract

Background

Many believe that computerization will improve health care quality, reduce costs, and increase administrative efficiency. However, no previous studies have examined computerization's cost and quality impacts at a diverse national sample of hospitals.

Methods

We linked data from an annual survey of computerization at approximately 4000 hospitals for the period from 2003 to 2007 with administrative cost data from Medicare Cost Reports and cost and quality data from the 2008 Dartmouth Health Atlas. We calculated an overall computerization score and 3 subscores based on 24 individual computer applications, including the use of computerized practitioner order entry and electronic medical records. We analyzed whether more computerized hospitals had lower costs of care or administration, or better quality. We also compared hospitals included on a list of the “100 Most Wired” with others.

Results

More computerized hospitals had higher total costs in bivariate analyses (r = 0.06, P = .001) but not multivariate analyses (P = .69). Neither overall computerization scores nor subscores were consistently related to administrative costs, but hospitals that increased computerization faster had more rapid administrative cost increases (P = .0001). Higher overall computerization scores correlated weakly with better quality scores for acute myocardial infarction (r = 0.07, P = .003), but not for heart failure, pneumonia, or the 3 conditions combined. In multivariate analyses, more computerized hospitals had slightly better quality. Hospitals on the “Most Wired” list performed no better than others on quality, costs, or administrative costs.

Conclusion

As currently implemented, hospital computing might modestly improve process measures of quality but does not reduce administrative or overall costs.

Section snippets

Data Sources

We analyzed data from 3 sources: the Healthcare Information and Management Systems Society (HIMSS) Analytics annual survey of hospitals' computerization; the Medicare Cost Reports submitted to the Centers for Medicare and Medicaid Services; and the 2008 Dartmouth Health Atlas, which compiles Centers for Medicare and Medicaid Services data on the costs and quality of care that hospitals deliver to Medicare patients.

We used HIMSS surveys for the years 2003 to 2007 to assess the degree of hospital

Results

Hospital computerization increased between 2003 and 2004 and from 2005 to 2007. Data discontinuity precluded analysis of changes between 2004 and 2005. By 2007, the average hospital in the HIMSS survey had implemented 64% of the 24 surveyed computer applications, although only 23% had implemented computerized physician order entry. Larger urban and teaching hospitals were more computerized, whereas public hospitals were less computerized. As expected, hospitals on the “Most Wired” lists

Discussion

We found no evidence that computerization has lowered costs or streamlined administration. Although bivariate analyses found higher costs at more computerized hospitals, multivariate analyses found no association. For administrative costs, neither bivariate nor multivariate analyses showed a consistent relationship to computerization. Although computerized physician order entry was associated with lower administrative costs in some years on bivariate analysis, no such association remained after

Conclusions

Whatever the explanation, as currently implemented, health information technology has a modest impact on process measures of quality, but no impact on administrative efficiency or overall costs. Predictions of cost-savings and efficiency improvements from the widespread adoption of computers are premature at best.

Acknowledgment

HIMSS Analytics provided data free of charge but played no role in the analysis or interpretation of the data.

References (37)

  • J. Ash et al.

    The extent and importance of unintended consequences related to computerized provider order entry

    J Am Med Inform Assoc

    (2007)
  • J.P. Barrett et al.

    Final Report on the Evaluation of the Implementation of a Medical Information System in a General Community Hospital

    (1975)
  • The Computer-Based Patient Record

    (1991)
  • Toward a National Health Information InfrastructureReport of the Work Group on Computerization of Patient Records to the Secretary of the US Department of Health and Human Services

    (April 1993)
  • J.D. Moore

    Huge savings expected from new EDI standards

    Mod Healthc

    (1996)
  • J. Walker et al.

    The value of health care information exchange and interoperabilityHealth Affairs, Web Exclusive January 19, 2005

  • R. Hillestad et al.

    Can electronic medical record systems transform health care?Potential health benefits, savings, and costs

    Health Aff (Millwood)

    (2005)
  • HHH.gov: Health Information Technology

  • Evidence report/technology assessment number 132: Costs and benefits of health information technology. AHRQ Publication No. 06-E006, April 2006

  • B. Chaudhry et al.

    Systematic review: impact of health information technology on quality, efficiency, and costs of medical care

    Ann Intern Med

    (2006)
  • Evidence on the costs and benefits of health information technology. Publication number 2976. Washington: Congressional Budget Office, May, 2008

  • Key issues in analyzing major health insurance proposals. Publication number 3102. Washington: Congressional Budget Office, December, 2008

  • S. Woolhandler et al.

    Administration costs in US hospitals

    N Engl J Med

    (1993)
  • S. Woolhandler et al.

    Costs of care and administration at for-profit and other hospitals in the United States

    N Engl J Med

    (1997)
  • The 2008 Dartmouth Atlas of Health Care

  • Quality Measures: What are the hospital process of care measures?

  • Cited by (157)

    • A longitudinal time and motion study quantifying how implementation of an electronic medical record influences hospital nurses’ care delivery

      2021, International Journal of Medical Informatics
      Citation Excerpt :

      The expansion and adoption of electronic medical record (EMR) systems is accelerating globally with advantages suggested to include improvements such as reductions in mortality, length of stay, medication errors and other adverse events [1,2]. As well as patient related benefits from embracing digital healthcare, for clinicians it has been purported there will be improvements including decreased variations in care, reductions in time spent documenting, more efficient information sharing and increased time for direct patient care [7,8]. The central aim of this study was to objectively measure nursing care delivery before and following introduction of an EMR.

    • Administrative costs in health care—A scoping review

      2018, Health Policy
      Citation Excerpt :

      Regarding the third and fourth raised question for the purpose of this study (i.e. how to distinguish between useful and wasteful AC and how to assess them), eleven studies were classified to report findings from complementary analyses. In these publications statements about AC amounts were integrated into the context of particular health care market characteristics [47,48], quality scores and indicators [42,57], or the number of managed care contracts [49,50]. Four studies compared AC against the background of research and education issues [30,39,40,54].

    View all citing articles on Scopus

    Funding: None.

    Conflict of Interest: None of the authors have any conflicts of interest associated with the work presented in this manuscript.

    Authorship: All authors had access to the data and played a role in writing this manuscript.

    View full text