Obama's Inflated Health "Savings"

Obama says his health care plan will garner large savings – $120 billion a year, or $2,500 per family – with more than half coming from the use of electronic health records. And he says he’ll make that happen in his first term. We find his statements to be overly optimistic, misleading and, to some extent, contradicted by one of his own advisers. And it masks the true cost of his plan to cover millions of Americans who now have no health insurance.

* Obama cites a RAND study that found widespread use of electronic health records could save up to $77 billion a year in overall health care spending. But the study says that level of savings won’t be reached until 2019, when it projects 90 percent of hospitals and doctors would be using electronic records systems.

* Much could be done to speed up the adoption of electronic record-keeping. But experts, including the lead researcher on the RAND study, are extremely doubtful the U.S. could see widespread adoption in the first term of an Obama presidency, or even a second term. Even a campaign adviser acknowledges Obama’s plan likely won’t reach the full savings potential until five years into implementation, by which time Obama could be out of office.

* Obama says he’ll "lower premiums by up to $2,500 for a typical family per year” by investing in electronic health records as well as other efforts. But his adviser tells us that $2,500 figure includes savings to government and employers that could, theoretically, lead to lower taxes or higher wages for families – so we shouldn't necessarily expect insurance premiums that are "lower" by that amount.

* The RAND study on which the campaign partly bases its estimates is one of the only reports available on possible cost savings. It may well be correct – no one knows for sure. But it looks at potential savings in an ideal situation and recently has faced criticism.

Many, if not most, health care experts and professionals agree that the use of electronic health records or health IT would have various benefits, in terms of quality of care as well as spending. But doctors and hospitals in the U.S. have been slow to adopt it for several reasons. Whether Obama can effectively bring about widespread adoption and large savings is an open question and not as concrete as his pronouncements imply.


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