Health network costs projected at $156 billion

The Costs of a National Health Information Network

The price tag to develop the National Health Information Network (NHIN) is estimated at $156 billion in capital costs over a five-year period, according to a study published Monday in the Annals of Internal Medicine.

The study pegs the network's annual costs at $48 billion.

Although these costs estimates appear staggering, the report, “The Cost of a National Health Information Infrastructure,” states that the $156 billion in capital costs represents 2 percent of health care spending over five years.

Karen Davis, president of the Commonwealth Fund, said the cost estimate study “is an important step toward realizing the goal of a truly high performance health system.”

These estimates were developed by a panel of health information technology experts, the study states, including Dr. David Brailer, national coordinator for health IT at the Department of Health and Human Services; Janet Corrigan, president and chief executive officer of the National Committee for Quality Health Care; and Janet Marchibroda, CEO of the eHealth Initiative.

The Bush administration has requested $125 million for health IT for fiscal 2006. The House has approved this request, but the Senate approved only $95 million. A House/Senate conference later this year will address the disparities between the two bills.

Canada has committed just less than $1 billion in federal funding to health care IT over the next decade through Canada Health Infoway, a federally backed nonprofit corporation that funds provincial health IT projects backed by matching funds from the provinces. The United Kingdom's National Health Service plans to spend $2 billion a year for 10 years on its Connecting for Health project to provide electronic health records for 50 million patients in England by 2010.

An earlier Commonwealth Fund study published in "Medscape General Medicine" last December states that 56 percent of 1,837 physicians surveyed across the United States called start-up costs for health IT a major barrier. But 44 percent of physicians considered lack of standards a major barrier.

"The federal government has an important role to play in solving the problems of cost and standards that are slowing the movement towards health care IT,” said Dr. Anne-Marie Audet, vice president for quality improvement at the fund and lead author of the "Medscape" article.

The Annals of Medicine study was conducted by Dr. Rainu Kaushal, an instructor in Harvard Medical School's Division of General Internal Medicine at Brigham and Women's Hospital; several of his colleagues at the hospital; and Dr. David Blumenthal, director of the Institute for Health Policy at Massachusetts General Hospital.