HEALTH CARE 

National Strategy Needed 

to Accelerate the 

Implementation of 

Information Technology 

Statement of David A. Powner, 

Director, Information Technology Management Issues 

United States Government Accountability Office

GAO Testimony

Before the Committee on Government Reform, 

Subcommittee on Technology, Information Policy, 

Intergovernmental Relations and the Census, 

House of Representatives

For Release on Delivery 

2:00 p.m. EDT July 14, 2004 

GAO-04-947T 
www.gao.gov/cgi-bin/getrpt?GAO-04-947T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact David A. 

Powner at 202-512-9286 or

pownerd@gao.gov. 

Highlights of GAO-04-947T, testimony 

before the Subcommittee on Technology, 

Information Policy, Intergovernmental 

Relations and the Census, Committee on 

Government Reform, House of 

Representatives 

July 14, 2004

HEALTH CARE

National Strategy Needed to Accelerate 

the Implementation of Information 

Technology 

The use of IT can yield benefits in clinical care and associated administrative 

functions as well as in public health. Health care organizations reported that 

electronic medical records (EMR) improved the delivery of care because, 

among other reasons, more complete medical documentation was available 

to support the provider’s diagnosis. In addition, EMRs could greatly facilitate 

the reporting of public health information associated with the early 

detection of and response to disease outbreaks. One hospital replaced 

outpatients’ paper medical charts with EMRs, realizing about $8.6 million in 

annual savings. This hospital also established electronic access to laboratory 

results and reports, replacing its manual process for handling medical 

records and saving another $2.8 million a year. In addition, the lessons 

learned that were reported to us by health care organizations that have 

successfully implemented solutions could be used by other organizations to 

accelerate the adoption of health IT. These lessons recognize the 

importance of reengineering business processes, gaining users’ acceptance 

of IT, providing adequate training, and making systems secure. 

Regarding public health, federal agencies identified 72 existing and planned 

information systems—34 surveillance systems, 18 supporting technologies, 

10 communications systems, and 10 detection systems. For example, the 

Centers for Disease Control and Prevention is currently implementing its 

Public Health Information Network comprised of a number of disease 

surveillance and communications systems, including the Health Alert 

Network. This network is an early warning and response system that is 

intended to facilitate communication among federal, state, and local 

agencies during public health emergencies. GAO also reported that 

identification and implementation of health care data, communications, and 

security standards—which are necessary to support compatibility and 

interoperability of agencies’ various IT systems—remained incomplete 

across the health care sector. To address the challenges of coordinating the 

many IT initiatives and implementing a consistent set of standards, GAO 

recommended last year that the Secretary of Health and Human Services 

develop a strategy for public health preparedness and response, to include 

setting priorities for IT initiatives and establishing mechanisms to monitor 

the implementation of standards throughout the health care industry. Since 

that time, progress has been made in identifying standards. The Office of 

Management and Budget’s e-government initiative, the Consolidated Health 

Informatics initiative, has identified a number of standards to be applied to 

new federal development efforts and modifications of existing systems. This 

initiative is intended to promote the interoperability of information systems. 

However, implementing these standards across the federal government is 

still a work in progress. Until these standards are implemented, informationsharing challenges will remain. In April of this year, Executive Order 13335 

established a National Health IT Coordinator and called for a strategic plan 

to guide the nationwide implementation of interoperable health IT. As this 

plan moves forward, it will be essential to have continued leadership, clear 

direction, measurable goals, and mechanisms to monitor progress.

Health care is an informationintensive industry that remains 

highly fragmented and inefficient. 

Hence, the uses of information 

technology (IT)—in delivering 

clinical care, performing 

administrative functions, and 

supporting the public health 

infrastructure—have the potential 

to yield both cost savings and 

improvements in the care itself. 

In 2003, GAO reported on benefits 

to health care that could result 

from using IT—both cost savings 

and measurable improvements in 

the delivery and quality of care. 

GAO also reported on federal 

agencies’ existing and planned 

information systems intended to 

support our nation’s preparedness 

for and ability to respond to public 

health emergencies and the status 

of health care standards setting 

initiatives. 

The subcommittee has asked GAO 

to summarize our work on reported 

benefits of the use of IT for health 

care delivery and on IT initiatives 

supporting public health 

preparedness and response. 
Page 1 

Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here today to discuss the benefits that effective 

implementation of information technology (IT) can bring to the 

health care industry. According to the Institute of Medicine and 

others, health care is an information-intensive industry that remains 

highly fragmented and inefficient. Hence, the uses of IT—in 

delivering clinical care, performing administrative functions, and 

supporting the public health infrastructure1

—have the potential to 

yield both cost savings and improvements in the care itself. 

However, effectively implementing IT has historically been a major 

challenge for this industry. Currently there is inconsistent use of IT 

in exchanging data and delivering care. In addition, implementing 

information security measures that resist cyber attacks also remains 

a challenge. 

At your request, today I will summarize our previously issued 

reports on (1) the reported benefits of using IT for health care 

delivery, including lessons learned from health care organizations 

that have implemented IT and (2) IT initiatives that support the 

public health infrastructure, including the status of standards setting 

initiatives that are necessary to support greater information sharing.2

 

In preparing this testimony, we summarized our prior reports and 

updated progress on our recommendations in accordance with 

generally accepted government auditing standards. 

 1

The public health infrastructure is the foundation that supports the planning, delivery, and 

evaluation of public health activities and is comprised of a well-trained workforce, effective 

program and policy evaluation, sufficient epidemiology and surveillance capability to 

detect outbreaks and monitor incidence of diseases, appropriate response capacity for 

public health emergencies, effective laboratories, secure information systems, and 

advanced communications systems.

2

U.S. General Accounting Office, Bioterrorism: Information Technology Strategy Could 

Strengthen Federal Agencies’ Abilities to Respond to Public Health Emergencies, GAO-03-

139 (Washington, D.C.: May 30, 2003) and U.S. General Accounting Office, Information 

Technology: Benefits Realized for Selected Health Care Functions, GAO-04-224 

(Washington, D.C.: October 31, 2003). 
Page 2 

Results in Brief 

As we reported last year, cost savings and other benefits realized by 

health care organizations that have implemented IT can be 

significant both in providing clinical health care and in performing 

the administrative functions associated with health care delivery. 

For example, using bar code technology and wireless scanners to 

verify both the identities of patients and their correct medications, a 

community hospital prevented the administration of over 1,200 

wrong drugs or dosages and almost 2,000 early or extra doses. The 

monetary value of the errors that were prevented was almost 

$850,000. Another example is a teaching hospital, which replaced 

paper medical charts with electronic medical records (EMR) for 

outpatients, realizing about $8.6 million in annual savings.3

 This 

hospital also established electronic access to laboratory results and 

reports, replacing its manual process for handling medical records

and saving $2.8 million a year. Health care organizations also told us 

that EMRs improved the delivery of care because, among other 

reasons, more complete medical documentation was available to 

support the provider’s diagnosis. In addition, these electronic 

records could greatly facilitate the reporting of public health 

information associated with the early detection and response to 

disease outbreaks. Additionally, the lessons learned that were 

reported to us by health care organizations that have successfully 

implemented solutions could be used by other organizations to 

accelerate the adoption of health IT. These lessons recognize the 

importance of reengineering business processes, gaining users’ 

acceptance of IT, providing adequate training, and making systems 

secure. 

Also last year, we reported that multiple federal agencies had a large 

number of both existing and planned information systems that are 

intended to support our nation’s preparedness for and ability to 

 3

For electronic medical records (EMRs)—also known as electronic health records, 

automated medical records, and computer-based patient records, among other names—

multiple definitions exist, depending on the functions that are included. They can be used 

simply as a passive tool to store patient information or can include multiple decision 

support functions, such as individualized patient reminders and prescribing alerts. 
Page 3 

respond to public health emergencies, including bioterrorism.4

Specifically, these agencies identified 72 systems—34 surveillance 

systems, 18 supporting technologies, 10 communications systems, 

and 10 detection systems.5 For example, the Centers for Disease 

Control and Prevention is currently implementing its Public Health 

Information Network, which consists of a number of disease 

surveillance and communication systems, including the Health Alert 

Network. This network is an early warning and response system 

that is intended to facilitate better communication among federal, 

state, and local agencies during public health emergencies. We also 

reported that identification and implementation of health care data, 

communications, and security standards—which are necessary to 

support compatibility and interoperability of agencies’ various IT 

systems—remained incomplete across the health care sector. A 

major consequence of not implementing such standards is that 

federal agencies and others associated with public health cannot 

exchange data. For example, in responding to the anthrax events, 

one of the major IT challenges that public health officials faced was 

the issue of how to exchange data among all participants. During 

this event, participants accumulated dissimilar data and principally 

exchanged it manually. 

To address the challenges of coordinating the many IT initiatives 

and implementing a consistent set of standards, we recommended 

last year that the Secretary of Health and Human Services develop a 

strategy for public health preparedness and response, to include 

setting priorities for IT initiatives, establishing milestones for 

defining and implementing all standards, and establishing 

mechanisms to monitor the implementation of standards throughout 

 4

Bioterrorism is the threat or intentional release of biological agents (viruses, bacteria, or 

their toxins) for the purpose of influencing the conduct of government, or intimidating or 

coercing a civilian population. 

5

Surveillance systems facilitate the performance of ongoing collection, analysis, and 

interpretation of disease-related data. Supporting technologies are tools or systems that 

provide information for the other categories of systems. Communications systems facilitate 

the secure and timely delivery of information to the relevant responders and decision 

makers. Detection systems consist of devices for the collection and identification of 

potential biological agents from environmental samples that include an IT component that 

facilitates the collection of data for surveillance. 
Page 4 

the health care industry. Since then, progress has been made in 

identifying standards. For example, the Office of Management and 

Budget’s Consolidated Health Informatics (CHI) e-government 

initiative has identified a number of standards that are to be applied 

to new federal development efforts and modifications of existing 

systems to promote the interoperability of information across 

federal agencies. However, implementing these standards across 

the federal government remains a work in progress. Further 

progress in leadership has occurred with the President’s recently 

issued Executive Order6

, which calls for the establishment of a 

National Health Information Technology Coordinator and the 

issuance of a broader strategic plan to guide the nationwide 

implementation of interoperable health care information systems. 

Although it is encouraging that the Coordinator plans to present this 

strategic plan next week, as health IT initiatives are pursued it will 

be essential to have continued leadership, clear direction, 

measurable goals, and mechanisms to monitor progress. 

Background 

The United States health care system is a large sector of the 

economy comprised of clinicians, health care delivery organizations, 

insurers, consumers, and government health agencies. According to 

the Medicare Payment Advisory Commission, the health care 

industry generally uses less IT than other industries, and the extent 

and types of IT deployed vary by setting and institution. The health 

care industry has recognized that IT can improve the quality of care, 

promote patient safety, reduce costs of both care and administrative 

functions, and expedite response to public health emergencies. 

Public health officials are increasingly concerned about our 

exposure and susceptibility to infectious disease and food-borne 

illness because of global travel, increased volume of food imports, 

 6

Executive Order 13335—Incentives for the Use of Health Information Technology and 

Establishing the Position of the National Health Information Technology Coordinator, April 

27, 2004. 
Page 5 

and the evolution of antibiotic-resistant pathogens. Public health 

experts maintain that a strong infrastructure could provide the 

capacity to prepare for and respond to both acute and chronic 

threats to the nation’s health, whether they are bioterrorism attacks, 

emerging infections, disparities in health status, or increases in 

chronic disease and injury rates. 

IT can play an essential role in supporting federal, state, local, and 

tribal governments in public health activities and clinical care 

delivery. For public health emergencies in particular, the ability to 

quickly exchange data from provider to public health agency—or 

from provider to provider—is crucial in detecting and responding to 

naturally occurring or intentional disease outbreaks. It allows 

physicians to share individually identifiable information with public 

health agencies for use in performing public health activities. 

The Centers for Disease Control and Prevention (CDC) has 

previously acknowledged several IT limitations in the public health 

infrastructure. For example, basic capability for disease surveillance 

systems to detect and analyze disease outbreaks is lacking for 

several reasons. First, health care providers have traditionally used 

paper- or telephone-based systems to report disease outbreaks to 

approximately 3,000 public health agencies. This is a labor-intensive, 

burdensome process for local health care providers and public 

health officials, often resulting in incomplete and untimely data. 

Second, not all public health agencies have access to the Internet or 

to secure channels for electronically transmitting sensitive data. 

Several types of systems can play vital roles in identifying and 

responding to public health emergencies, including acts of 

bioterrorism. These types of systems—described in a technology 

assessment for the Department of Health and Human Services 

(HHS) that was completed by the University of California San 

Francisco-Stanford Evidence-based Practice Center—serve different 

but related functions and include the following:7

 7

University of California San Francisco-Stanford Evidence-based Practice Center, 

Bioterrorism Preparedness and Response: Use of Information Technologies and Decision 

Support Systems (Stanford, CA: June 2002).
Page 6 

• Detection—systems that consist of devices for the collection 

and identification of potential biological agents from 

environmental samples, making use of IT to record and send 

data to a network. 

• Surveillance—systems that facilitate the performance of 

ongoing collection, analysis, and interpretation of disease-related 

data to plan, implement, and evaluate public health actions. 

• Diagnostic and clinical management—systems with potential 

utility for enhancing the likelihood that clinicians will consider 

the possibility of bioterrorism-related illness. These systems are 

generally designed to assist clinicians in developing a differential 

diagnosis for a patient who has an unusual clinical presentation. 

• Communications—systems that facilitate the secure and timely 

delivery of information to the relevant responders and decision 

makers so that appropriate action can be taken. 

In April of this year, the President issued an Executive Order, which 

recognizes the importance of IT to the improvement of the health 

care system to address problems with high costs, medical errors, 

and administrative inefficiencies. The order establishes the position 

of a National Health Information Technology Coordinator. This new 

position has been tasked with providing leadership for the 

development and nationwide implementation of interoperable 

health IT in both the public and private health care sectors. The 

President also announced a goal of having EMRs available for most 

Americans within the next 10 years. 

Information Technology Can Provide Benefits for Delivery of Care 

IT can provide significant benefits in providing clinical health care 

and in the administrative functions associated with health care 

delivery. Last October, we identified 20 examples of reported cost 

savings or other benefits at 14 health care organizations that had 

implemented IT solutions in their clinical care environments. The 

 
Page 7 

rapidly rising costs of health care, along with an increasing concern 

for the quality of care and the safety of patients, are driving health 

care organizations to use IT to automate clinical care operations and 

their associated administrative functions. IT is now being used for, 

among other things, EMRs, order management, Internet access for 

patient and provider communications, and automated billing and 

financial management. 

Health care delivery organizations identified instances that resulted 

in cost savings from the use of IT as a result of reductions in costs 

associated with medication errors, communication and 

documentation of clinical care and test results, staffing and paper 

storage, and processing of information. Specific examples included: 

• A teaching hospital reported that it realized about $8.6 million in 

annual savings by replacing paper medical charts with EMRs for 

outpatients. It also reported saving over $2.8 million annually by 

replacing its manual process for handling medical records with 

electronic access to laboratory results and reports. 

• A teaching hospital reported that it saved $5 million annually on 

drug substitutions, based on automated prompts that 

recommended alternatives resulting in increased quality and 

decreased cost. 

• A community hospital prevented the administration of over 1,200 

wrong drugs or dosages and almost 2,000 early or extra doses by 

using bar code technology and wireless scanners to verify both 

the identities of patients and their correct medications. The 

reported monetary value of the errors prevented was almost 

$850,000. 

• An integrated health care delivery organization reduced the 

overall number of daily chart pulls, estimating that about $5.7 

million in medical record staffing costs were avoided or saved 

annually. 

IT also contributed to other benefits, such as shorter hospital stays, 

faster communication of test results, improved management of 

chronic disease, and improved accuracy in capturing charges 

associated with diagnostic and procedure codes. For example, 
Page 8 

• A teaching hospital reported a decrease in average length of stay 

from 7.3 to 5 days when it implemented an integrated EMR 

system that resulted in improvements in health care efficiency 

and practice changes. 

• A teaching hospital reported improved patient scheduling using a 

rules-based electronic scheduling system that accommodated 

travel time to the appointment, fasting requirements, and 

providers’ availability. 

• An integrated health care delivery organization reported 

improvements in diabetes control for members with the disease, 

decreases in upper gastrointestinal studies ordered, and 

increases in the number of Pap smears performed by using alerts 

and reminders, automated patient care guidelines, and data 

warehouse reports. 

• A teaching hospital reported that 4 percent of radiology orders 

that had been entered into the order entry system were cancelled 

and 55 percent were changed when an embedded alert warned 

that an order was inappropriate for specified clinical reasons. 

Health care organizations also told us that EMRs could also improve 

the delivery of care because, among other reasons, more complete 

medical documentation was available to support the provider’s 

diagnosis. In addition, EMRs greatly facilitate the reporting of 

public health information associated with the early detection of and 

response to disease outbreaks. 

The lessons learned that were reported to us by health care 

organizations that have successfully implemented IT may prove 

useful for other organizations as they implement solutions—such as 

recognizing the importance of reengineering business processes, 

gaining users’ acceptance, providing adequate training, and making 

systems available and secure. For example, organizations reported 

that business process changes were key in effectively implementing 

the technology and that users, including physicians, should be 

involved in systems design and implementation. 
Page 9 

Many IT Initiatives Address the Public Health Infrastructure, 

Although Standards Implementation Challenges Remain 

In May 2003, we reported that six federal agencies involved in 

bioterrorism preparedness and response had a large number of 

existing and planned information systems associated with 

supporting a public health emergency. Specifically, these agencies 

identified 72 information systems and supporting technologies. Of 

the 72 systems, 34 are surveillance systems, 18 are supporting 

technologies, 10 are communications systems, and 10 are detection 

systems. In spite of these many initiatives, the key ones that are 

intended to facilitate greater information sharing are still being 

developed and implemented. For example, CDC is currently 

implementing its Public Health Information Network, which 

consists of a number of disease surveillance and communications 

systems, including the Health Alert Network. This network is an 

early warning and response system intended to provide federal, 

state, and local agencies with better communications during public 

health emergencies. The Department of Defense is using its 

Electronic Surveillance System for the Early Notification of 

Community-based Epidemics (ESSENSE) to support early 

identification of infectious disease outbreaks in the military by 

comparing analyses of data collected daily with historical trends. 

We also found that agencies varied in the extent to which they 

interacted and coordinated with other agencies in planning and 

operating each of these initiatives. 

The October 2001 anthrax attacks and the subsequent emergence of 

new infectious diseases have highlighted the importance of data 

standards for real-time data exchange across the public health 

infrastructure. During the anthrax attack, participants accumulated 

dissimilar data and principally exchanged it manually. 

Since 1993, we have called for federal leadership to expedite the 

standards development process in order to accelerate the use of 

EMRs.8

 Most recently, in May 2003, we again reported that the 

 8

U.S. General Accounting Office, Automated Medical Records: Leadership Needed to 

Expedite Standards Development, GAO/IMTEC-93-17 (Washington, D.C.: April 30, 1993). 
Page 10 

identification and implementation of health care data, 

communications, and security standards—which are necessary to 

support the compatibility and interoperability of agencies’ various 

IT systems—remains incomplete across the health care industry. 

We also identified other standards setting initiatives (e.g., CHI and 

HIPPA9

) and raised concerns about coordinating these initiatives. 

To address the challenges of coordinating the many IT initiatives 

and implementing a consistent set of standards, we recommended 

that the Secretary of Health and Human Services (HHS), in 

coordination with other key stakeholders, establish a national IT 

strategy for public health preparedness and response, including 

specific steps toward improving the nation’s ability to use IT in 

support of the public health infrastructure. Specifically, we 

recommended, among other things, that the Secretary 

• set priorities for information systems, supporting technologies, 

and other IT initiatives; 

• define activities for ensuring that the various standards-setting 

organizations coordinate their efforts and reach further 

consensus on the definition and use of standards; 

• establish milestones for defining and implementing all standards; 

and 

• create a mechanism—consistent with HIPAA requirements—to 

monitor the implementation of standards throughout the health 

care industry. 

Since our May 2003 report, HHS has continued its efforts to identify 

applicable standards throughout the health care industry and across 

federal health care programs. For example, in May 2004, the CHI 

 9

In August 1996, Congress recognized the need for standards to improve the Medicare and 

Medicaid programs in particular and the efficiency and effectiveness of the health care 

system in general. It passed the Health Insurance Portability and Accountability Act of 

1996 (HIPAA), which calls for the industry to control the distribution and exchange of 

health care data and begin to adopt electronic data exchange standards to uniformly and 

securely exchange patient information. 
Page 11 

initiative—one of OMB’s e-government projects—announced fifteen 

additional standards that build on the initial five announced in 

March 2003. Federal agencies are expected to include the standards 

in their architectures and when they build, acquire, or modify 

systems. Current plans for the CHI initiative call for it to be 

incorporated into HHS’s Federal Health Architecture by September 

2004.10 This architecture is still evolving, and many issues—such as 

coordination of the various standards setting efforts and 

implementation of the standards that have been identified—are still 

works in progress. Until these standards are more fully 

implemented, federal agencies and others associated with the public 

health infrastructure cannot ensure that their systems will be 

capable of exchanging data with other systems when needed and 

consequently cannot ensure effective preparation for and response 

to public health emergencies, including acts of bioterrorism. 

In addition, in April of this year, the President issued an Executive 

Order, which calls for the establishment of a National Health 

Information Technology Coordinator and the issuance of a broader 

strategic plan to guide the nationwide implementation of 

interoperable health care information systems. The coordinator is 

also specifically tasked with creating incentives for the use of health 

IT and accelerating the adoption of EMRs, among other things. The 

Coordinator plans to present the strategic plan next week. Such a 

plan, if properly crafted, should help to move the health care 

industry towards interoperable information systems. As health IT 

initiatives are pursued, it will be essential to have continued 

leadership, clear direction, measurable goals, and mechanisms to 

monitor progress. 

____________________________________________________________ 

In summary, there are many opportunities and challenges associated 

with the implementation of IT for clinical care delivery and public 

health. The federal government, namely HHS, has taken a 

leadership role in establishing a strategy and identifying data and 

 10Initiated in July 2003, the Federal Health Architecture is expected to define an 

overarching framework and methodology for establishing targets and standards for 

interoperability and communication across the federal health community. 
Page 12 

communications standards, which are critical for sharing data 

across the health care industry—both to improve the quality of 

patient care in the United States and to strengthen the public health 

infrastructure. However, much more work remains to more fully 

utilize IT for the delivery of care and to identify and respond to 

public health emergencies. HHS needs to provide continued 

leadership, sustained and focused attention, clear direction, and 

mechanisms to monitor progress in order to bring about measurable 

improvements and achieve the President’s goals. 

Mr. Chairman, this concludes my statement. I would be happy to 

answer any questions that you or members of the subcommittee 

may have at this time. 

If you should have any questions about this testimony, please 

contact me at (202) 512-9286 or M. Yvonne Sanchez, Assistant 

Director, at (202) 512-6274. We can also be reached by e-mail at 

pownerd@gao.gov and sanchezm@gao.gov, respectively. Other 

individuals who made key contributions to this testimony include 

Joanne Fiorino, M. Saad Khan, and Mary Beth McClanahan. 
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