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More on E-Health as No Cost Saver

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By Allan Holmes May 15, 2009

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New York Times columnist David Brooks jumped into the long-running argument over the likelihood of President Obama's health care reforms actually reducing health care costs. He includes health care technology in the reforms, most of which entails creating electronic health records for Americans. Health IT, along with other reforms such as more reliance on wellness programs and preventive medicine, won't "produce much in the way of cost savings over the next 10 years" and "nobody is sure that they will ever produce significant savings," Brooks says. He points out that those facts will make it difficult for Obama's strategy to use any savings to reduce the expanding federal debt.

Brooks' point provides a good reason to revisit the Congressional Budget Office's January 2009 analysis of what was then the House's version of the stimulus bill, in which $20 billion was pegged for encouraging the use of electronic health records. As pointed out in February, CBO found that even after 10 years, the investment in e-health records had a negative $17 billion return. In later years, the investment begins to pay off, but as Brooks argues, it's not going to help the deficit anytime soon.

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