$34.7 Billion Spent on Meaningful Use

CMS has put out the latest data on meaningful use participation and payments. They broke the Medicare dollars out by meaningful use stage 1 and stage 2. Meaningful use stage 1 cost nearly $20 billion. Meaningful use stage 2 cost $3.4 billion. The amounts were less for stage 2, but that’s still a massive drop off.

Less than half of eligible providers participated in stage 2 that participated in stage 1 (308k compared to 145k). Participating hospitals dropped from 4600 hospitals to 3096. This illustrates well what we’ve been saying for a while as far as hospitals still largely participating in meaningful use and most doctors choosing not to participate.

Also interesting to note is that at its peak, meaningful use was paying about $10 billion per year. In 2015, they spent $2.8 billion.

What I didn’t see in this report was any numbers on the cost savings that the meaningful use program provided. All the OIG estimates for meaningful use talked about how much money would be spent, but they also calculated how much money would be saved as well. As I recall they estimated about $36 billion in spending, but about $16 billion in savings. That would put the cost of the meaningful use program at $20 billion instead of the full $36 billion which it looks like we’ve now pretty much spent.

I like that HHS puts out this accountability as far as where the meaningful use money was spent. Shouldn’t we have some accountability as far as the savings as well? Do they not have a way to calculate it? Are they afraid that there weren’t cost savings? Or that meaningful use actually added costs? Maybe it’s in another report and I just missed it. If you know of that other report, I’d love to see it.

What do you think of these numbers? What’s been the benefit of the $34.7 billion that’s been spent? I’d love to hear your thoughts in the comments.

About the author

John Lynn

John Lynn is the Founder of HealthcareScene.com, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference, EXPO.health, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.

6 Comments

  • I’d love to see reporting on the projected $19B in CMS savings, too.

    There are also non-CMS savings attributable to EHR-ification (e.g., doc doesn’t have to waste time looking for a record, and then searching for relevant stuff in the record … well, depending on EHR, YMMV …) Have you seen any estimates of those savings (offset by the productivity lost while onboarding …)?

  • I haven’t seen any overall studies on savings. Just a few individual ones for specific organizations. Although, those are few and far between too.

  • Meaningful Use did accelerate the move to electronic records, something I think is important and (done right) leads to increased safety and efficiency overall. But what the numbers show is that the rules were too onerous and written to satisfy too many arbitrary “quality indicators” that in the end many providers did not see as relevant to providing quality care as those that wrote them. “Savings” from increased efficiency, error avoidance, and healthier patients is so hard to measure and will likely never be accurately reflected. In my honest opinion I don’t think the savings, measurable or not, outweighs the spending, at least not at this point in the game.

  • I agree with the comment above that there are surely savings to be found outside of CMS as well. By the same token, I think it’s important to bear in mind that the overall cost to the community/industry is only partially reflected in that $34.7B figure. After all, the amount CMS has paid out most certainly doesn’t cover the full cost of this effort (software, hardware, labor, training, opportunity costs, etc.) to the providers, at least not yet. It also doesn’t capture, e.g., unrecouped R&D dollars spent by industry on tools and methods for supporting MU initiatives, etc.

  • Great point. The $34.7 billion is just what CMS spent on incentives. It would be amazing to just even consider how much EHR vendors spent to become EHR certified and implement the meaningful use requirements. I think that would make us all sad when we consider what else could have been done with those programming hours.

  • Amy,
    You’re right that the savings is really hard to calculate. However, it’s even harder to predict what the savings will be before the legislation is even put in place. Yet, that’s what they did.

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