All Parties Ignore the One Way to Reduce Health Care Costs: Single-Payer

In a recent full-page newspaper advertisement, IBM touted massive medical savings through computerization. It’s a promise they’ve made before, starting with a report issued in 1961. If only these promises were true.

For 50 years, we’ve been told that computers would give doctors ready access to past tests and diagnoses, eliminating duplicate tests that are unnecessary and costly. But it turns out the reverse is true.

Our study published this month examined 28,741 patient visits to 1,187 physicians. We found that when doctors can view X-ray results online, they actually order 40 percent to 70 percent more X-rays, including costly CT scans and MRIs. And the same holds true for blood tests.

Even the most wired doctors – those with full electronic medical records and those in hospital-owned practices where old test results are most likely to be available electronically – showed no signs of moderating their test ordering.

Sparing doctors the inconvenience of tracking down results seems to lead to more testing, not less.

Computer vendors’ promises of cost savings by eliminating paperwork have also flopped. In a previous study of 3,800 hospitals, we found that computerization actually increased hospitals’ administrative costs.

Make no mistake: we support clinical computing. It’s an essential tool for improving medical care. One of us directed clinical computing at a Harvard hospital for more than a decade. And a handful of hospitals have developed computer systems that have improved care and may even cut costs.

But these successful systems were custom-built by clinicians on the ground and focused on meeting patient care needs. In contrast, business managers are the decisionmakers about computer purchases in most hospitals and large practices, and they’re choosing off-the-shelf software that gives priority to maximizing billings and addressing management’s needs. As our studies show, these management-led systems have increased health costs.

Yet politicians across the political spectrum – from Barack Obama to Newt Gingrich – continue to push computerization as a health care cure-all. Citing consultants’ estimates (in reports mostly funded by computer firms), they promise that the billions invested under the Health Information and Technology for Economic and Clinical Health (HITECH) Act will soon yield hundreds of billions in savings.

It’s not just vendors and consultants who fuel politicians’ delusions. The cost savings promised by computerization may be vaporware, but they’re painless. The realistic alternatives for medical cost control are not.

Someone – insurers, patients, doctors, hospitals or drug firms – will suffer if health care costs are contained. And if computers won’t save us from rising medical costs, we’ll eventually have to look elsewhere for salvation.

Republicans’ proposals would put the onus on patients in the form of higher copayments and deductibles, and by turning Medicare into a voucher program that would cover a shrinking share of seniors’ medical bills. But only extreme – we would say inhumane – financial barriers can keep the very sick patients who account for most costs from seeking care.

Democrats’ plans rely mostly on better care management and coordination, and improved prevention – laudable on other grounds, but unlikely to save much, if anything, according to careful studies and the Congressional Budget Office (CBO).

Both parties studiously avoid the one health-reform solution that – unlike computers – would actually save money while sparing patients: single-payer, nonprofit national health insurance.

Research shows that single-payer reform could save about $380 billion annually that’s currently wasted on insurers’ overhead and the unnecessary paperwork (and screen-work) they inflict on hospitals, doctors and patients. That’s enough money to fully cover the uninsured and eliminate copayments and deductibles for the rest of us.

In the early 1990s, studies by the CBO and the Government Accountability Office (GAO) arrived at similar conclusions. Their basic findings still hold. And, of course, the experience of other developed nations has demonstrated this proposition in practice.

But taking this path would mean taking on the big insurers, drug companies and medical-equipment manufacturers. It’s been much easier for politicians to toss some money to computer vendors and pretend that that will fix health care’s cost problem.