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2010-05-07

A case of as if it is too goo to be true!

Comments on news report by Adam Cresswell “Effective health IT can 'save 5000 lives'”, 7/05/2010, http://www.theaustralian.com.au/politics/effective-health-it-can-save-5000-lives/story-e6frgczf-1225863378188

The news report says:

“AN estimated 5000 deaths, two million GP and outpatient visits and 310,000 hospital admissions could be prevented every year if an effective IT system were rolled out - saving up to $7.6 billion in health costs annually, according to an analysis for release today.

The biggest share of the savings, worth $2.6bn each year, would come from reducing medication errors, while a further $2.3bn would come from improved care and prevention, according to the analysis of how greater computerisation could benefit Australia's health system.”

“The new report, by management consultants Booz and Company, says other benefits of improved IT would include cutting duplication - reducing the number of lab tests performed by more than 7.3 million, and the number of X-rays by more than three million. However, improved IT would cost between $4bn and $8.5bn, the report warns. The rollout would give governments a 68 per cent ($5.2bn) share of the estimated savings.”

Note the two important numbers: “saving up to $7.6 billion in health costs annually”, and “improved IT would cost between $4bn and $8.5bn”.

Even assuming the cost is on the high side of $8.5 billion, then it can be almost recovered from the cost saving in one year, and then the annual saving will continue and go on for many years!

If that is true, why don’t people, business or government do it?

It begs belief, doesn’t it?

Is it a case of too good to be true, or there are some profound market failures?

It would be interesting to see what will happen after this “enlightenment”.

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