Improved Utilization of Clinical Laboratory Tests Was One Source of Significant Savings

Investment in health informatics saved the Veterans Administration (VA) more than $3 billion during the past 10 years. This was the finding of a newly-published study in Health Affairs. It is likely to have positive implications for how use of information technology (IT) improves utilization of clinical pathology laboratory tests.

Titled “The Value from Investments in Health Information Technology at the U.S. Department of Veterans Affairs,” the study was undertaken by the Center for Information Technology Leadership. This is a Charlestown, Massachusetts-based research organization.

During the period of the study, the VA spent more than $4 billion on health information technology. As a result of that HIT investment, the VA realized total savings amounting to $7 billion. After subtracting the expense of the HIT investment, there was a net savings of $3 billion for the VA during the 10 years covered by the study.

department of veterans affairs

New report titled, The Value from Investments in Health Information Technology at the U.S. Department of Veterans Affairs

In a story about the Health Affairs study, a reporter for InformationWeek, identified sources of the savings, including: “Technology that eliminated duplicate tests and reduced medical errors accounted for more than 86% of the department’s savings. Lower operating expenses and reduced workloads accounted for all other savings.”

ROI Exceeds Expenditure

The study’s researchers were Colene M. Byrne, Lauren M. Mercincavage, Eric C. Pan, Adam G. Vincent, Douglas S. Johnston, and Blackford Middleton. They concluded that “The VA spent proportionately more on IT than the private health care sector spent, but it achieved higher levels of IT adoption and quality of care. The potential value of the VA’s health IT investments is estimated at $3.09 billion in cumulative benefits net of investment costs. This study serves as a framework to inform efforts to measure and calculate the benefits of federal health IT stimulus programs.”

VA hospitals are further along with informatics integration than their private-sector peers. A different research study published in the New England Journal of Medicine titled “Use of Electronic Health Records in U.S. Hospitals” concluded that “…only 1.5% of U.S. hospitals have a comprehensive electronic-records system (i.e., present in all clinical units), and an additional 7.6% have a basic system (i.e., present in at least one clinical unit). Computerized provider-order entry for medications has been implemented in only 17% of hospitals.”

HIT Adoption Improves Quality and Utilization of Clinical Laboratory Tests

“During the last two decades, the VA has adopted a full range of health IT to address patient care,” the InformationWeek article continued, “including computerized patient records, bar-coded medications, radiological imaging, medical laboratory test ordering and medication ordering.”

“This analysis is the first to examine the potential value of long-term investments in several health IT applications across settings in the VA,” wrote researchers in the study abstract published in Health Affairs. “Our findings suggest that the VA’s investment in the Veterans Health Information Systems and Technology Architecture (VistA) is associated with significant value through reductions in unnecessary and redundant care, process efficiencies, and improvements in care quality.”

VA Notes Improved Support for Medical Laboratory Test Orders

In a press release following publication of the study, the VA said, “VA has been using health IT systems for more than 20 years to improve medical outcomes and efficiency in delivering care. The use has grown to support the full range of patient care, including computerized patient records, bar-coded medications, radiological imaging, and laboratory and medication ordering.

“The study looked at the success in meeting clinical guidelines through the use of electronic health records and computerized physician alerts. Chronic illness, such as diabetes, which impacts about 25% of VA patients, was a focus of the study. VA patients with diabetes had better glucose testing compliance and control, more controlled cholesterol, and more timely retinal exams compared to Medicare’s private-sector benchmark. Retinal damage can be caused by diabetes. VA averaged about 15% points higher than the private sector on preventive care for patients with diabetes.”

Pathologists and clinical laboratory managers recognize that, for more than a decade, the Veterans Administration Health System has been at the forefront of developing integrated health informatics systems, including its VistA electronic medical record (EMR) system. Thus, it is significant that researchers can identify $7 billion of savings that can be attributed to use of integrated healthcare informatics.

Some of these savings are attributed to the improved patient outcomes and lower costs per episode of care that resulted from better utilization of medical laboratory tests by VA physicians. That is encouraging evidence that physician acceptance and use of electronic medical records may help improve the value proposition of clinical laboratory tests.

–Michael McBride

Related Information:

The Value From Investments In Health Information Technology At The U.S. Department Of Veterans Affairs

VA Health IT Generates $3 Billion Savings

The Value From Investments in Health Information Technology at the U.S. Department of Veterans Affairs

Use of Electronic Health Records in U.S. Hospitals

Study: VA gets high yield from HIT investment

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