Over the past 40 years, the National Health Expenditures (NHE) has significantly increased, and in fact, the total national health spending has almost tripled as a percentage of Gross Domestic Product (GDP) since 1969 (i.e., 6.2% of GDP in 1969 and 17.6% in 2009). The estimate of NHE is expected to reach $2.5 trillion in 2009. Worse yet, if no remedial actions taken, the expected annual growth of NHE will be 6.2% from 2008 to 2018, which is 2.1% higher than the expected annual GDP growth (i.e., 4.1%) by 2.1%. As reported in one prior projection, conducted by the Congressional Budget Office (CBO), the NHE will reach 31 percent of GDP by 2035, 41 percent by 2060, and 49 percent by 2082.
With little doubt, high health care cost has already become a national crisis and has been well overdue for corrective action. Most experts agree that our health care system today is riddled with inefficiencies, excessive administrative expenses, inflated prices, poor record management, redundant medical examination, inappropriate care, waste, and claim fraud. One recent study reported that 31% of U.S. spending in health care (i.e., 650 billion out of 2.1 trillion in 2006) was more than expected. Of these extra costs, more than two thirds (i.e., 436 billion) are attributed to outpatient care, and another 186 billion is related to high administrative costs. Strikingly yet, another study found that 62% of all bankruptcies filed in 2007 were linked to medical expenses. To combat against the continuous increase in health care cost, attention is now directed towards the extensive adoption of health information technology (HIT) to create and implement an efficient health care administration and service delivery. This health care reform involves work flows redesign and integration among all stakeholders by sharing information stored at multiple sites, which currently are owned and managed by different health care providers and even individual doctors in their offices. In essence, current health care inefficiency is primarily caused by two major factors: the lack of information sharing and the duplication in medical resources/treatments, which can be removed by effective use of Health Information Technology(HIT).