Cisco Blogs

Healthcare IT: Saving Lives, Saving Money

March 10, 2008 - 1 Comment

The US health care industry has been one of the last to benefit from the increased efficiencies brought by the adoption of information technology tools. Despite abundant evidence that technology could help lower costs and improve health care outcomes, providers have been slow to adopt. For most US providers the biggest obstacle has been poor return on investment. A small physician practice could face costs of over $30,000, yet that practice may see very little of the financial benefits. Instead, patients and insurers -either private or government-run Medicare and Medicaid – will benefit from fewer duplicative or unnecessary medical tests, reduced medical errors, and better care of chronic illnesses.Some would suggest that the US federal government should pay for health IT adoption, especially since 60% of the health care dollars spent in the United States are for Medicare or Medicaid patients. But anyone who’s been paying attention lately recognizes that the federal government has been trying to find ways to reduce its spending on health care, not expand it.Yet if investment in health IT used to deliver to Medicare and Medicaid patients saves the government money, shouldn’t we see that investment as a net savings to the government, not a cost? For the first time, a key government budget office has agreed. The Congressional Budget Office (CBO) has found that S. 2408, the Medicare Electronic Medication and Safety Protection (E-MEDS) Act, a bill that would mandate the use of e-prescribing for Medicare patients, would save the government $3 billion. S. 2408 would provide doctors with financial incentives to adopt e-prescribing tools and would cut benefits after 2011 for doctors not filing prescriptions electronically. Instead of seeing the financial incentives paid to doctors as an expense borne by the US government, budget officials are finally acknowledging that IT adoption can drive cost savings in health care. The momentum seems to be building for S. 2408, which stands a good chance of passing as part of Medicare legislation to be considered later this year.

In an effort to keep conversations fresh, Cisco Blogs closes comments after 60 days. Please visit the Cisco Blogs hub page for the latest content.


  1. The automation of healthcare has to be a good thing so long as it is secure and user-focused. To arrive at a situation where the user, in this case a small physician practice, does not see a clear ROI clearly is wrong. In the UK we have similar healthcare initiatives that are conceptually sound but are poorly implemented. Whether the users are office workers, physicians and patients, IT solutions need to be developed with the user in mind. Thus avoiding the political conflict that tarnishes the initial vision.