The costs of a national health information network

Ann Intern Med. 2005 Aug 2;143(3):165-73. doi: 10.7326/0003-4819-143-3-200508020-00002.


Background: The use of information technology may result in a safer and more efficient health care system. However, consensus does not exist about the structure or costs of a national health information network (NHIN).

Objectives: To describe the potential structure and estimate the costs of an NHIN.

Design: Cost estimates of an NHIN model developed by an expert panel.

Setting: U.S. health care system.

Measurements: An expert panel estimated the existing and the expected prevalence in 5 years of critical information technology functionalities. They then developed a model of an achievable NHIN by defining key providers, functionalities, and interoperability functions. By using these data and published cost estimates, the authors determined the cost of achieving this model NHIN in 5 years given the current state of information technology infrastructure.

Results: To achieve an NHIN would cost 156 billion dollars in capital investment over 5 years and 48 billion dollars in annual operating costs. Approximately two thirds of the capital costs would be required for acquiring functionalities and one third for interoperability. Ongoing costs would be more evenly divided between functionality and interoperability. If the current trajectory continues, the health care system will spend 24 billion dollars on functionalities over the next 5 years or about one quarter of the cost for functionalities of a model NHIN.

Limitations: Because of a lack of primary data, the authors relied on expert estimates.

Conclusions: While an NHIN will be expensive, 156 billion dollars is equivalent to 2% of annual health care spending for 5 years. Assessments such as this one may assist policymakers in determining the level of investment that the United States should make in an NHIN.

Publication types

  • Research Support, Non-U.S. Gov't

MeSH terms

  • Health Expenditures
  • Health Facilities / economics*
  • Humans
  • Information Services / economics*
  • Medical Records Systems, Computerized / economics
  • Models, Theoretical
  • United States