HIT Windfall? Trust but Verify

Expansion of health information technology could result in healthcare savings of $261 billion over 10 years, according to a report released this month.

Ever wonder where a number like that comes from? And how reliable it is?

The estimated $261 billion in savings, reported by Information Week , comes from a Commission on U.S. Federal Leadership in Health and Medicine: Charting Future Directions report titled "A 21st Century Roadmap for Advancing America's Health: The Path from Peril to Progress." The commission is a project of the Strengthening America's Future Initiative at the Center for the Study of the Presidency and Congress.

A footnote in the report attributes the figure to the Congressional testimony of Karen Davis and Cathy Schoen, president and senior vice president of the Commonwealth Fund, which bills itself as "a private foundation that aims to promote a high performing health care system." Davis and Schoen testified last year at a House Ways and Means Committee hearing.

Their testimony came directly from a report commissioned by the foundation and written by The Lewin Group.

The report doesn't explain how it arrived at its conclusions, but it does include a methodology note that directs readers to The Lewin Group's technical report. The 145-page explanation of methodology is leavened with words such as "assumption" (20 times) and "estimate" (more than 400 times). If you're looking for a lucid explanation of the cost-savings estimate, don't look here.

You'll just have to trust the Lewin Group, which is part of Ingenix, a subsidiary of UnitedHealth Group, a health insurance company that occupies the Fortune 500's 21st position.

According to Wikipedia, "In February 2008, New York State Attorney General Andrew M. Cuomo announced an industrywide investigation into a scheme by health insurers to defraud consumers by manipulating reasonable and customary rates. ... Cuomo said this inappropriately allowed health insurance companies to deny a portion of provider claims, thereby pushing costs down to members.

"A year later, UnitedHealth Group and Ingenix announced an agreement to settle, for $50 million, the probe into the independence of the health pricing database. The company acknowledges the appearance of a conflict of interest, but admitted no wrongdoing. UnitedHealth Group also announced a $350 million settlement of three class action lawsuits filed in Federal court by the American Medical Association, UnitedHealth Group members, healthcare providers and state medical societies for not paying out-of-network benefits."

The IRS and the SEC have investigated an alleged scheme involving backdated stock options and hundreds of millions of dollars of illegal executive compensation.

So, should you trust the estimated savings figure of $261 billion? I'm not saying you shouldn't.

I'm just sayin'.