National Health Data Exchange Could Save $3.12 Billion Yearly

A new study conducted by researchers from Notre Dame and the University of Michigan has concluded that an integrated national health data exchange system could reduce Medicare spending by more than $3 billion each year. The creation and implementation of such a program would work to defray costs by enhancing coordinated care and fostering more effective population health management programs. The study also found that regional markets that have established health information exchange (HIE) systems have realized average savings of roughly $140 per Medicare recipient per year. The savings realized by these HIEs, according to the study, are likely linked to a reduction in duplicate testing and procedures, as well as quicker access to patients’ complete and updated medical records, which would likely improve both patient management and satisfaction.

If these savings can be realized by regional markets, the study expounds that including the entire Medicare population in a national HIE has the potential for enormous overall cost reductions. However, it should be noted that these savings to date are more prevalent in communities that are experienced with data exchanges or financial incentives to reduce costs. This means that for a national HIE to be effective, there may need to be further investment in provider-centered financial incentives in order for the cost-savings to be realized more evenly among different areas. Also, cost-saving tends to be realized by programs that have been investing long-term in innovative care models. For instance, the study found that one-third of HEIs that have been in use for 3 years or more accrued a savings, while only 19% of those in use 1 year or less generated savings. Though this shows that implementation of a successful cost-saving HEI can take some time, there is no better time to start than now to potentially realize savings down the road.

As the study concludes, time is required for HIE capabilities to improve, and for health care providers to learn to use and incorporate HIEs. However, the savings HIEs can provide is likely only to increase as providers continue to become more familiar with the processes.