The value from investments in health information technology at the U.S. Department of Veterans Affairs

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To study the impact of health information technology (HIT) adoption and use at Veterans Affairs’(VA) and compare it with private sector HIT adoption.

Data Sources and Methods

  • Bench-marking analysis was used to compare VA’s Information Technology (IT) adoption and spending, and IT-related quality of care to that of private sector.
  • Cost-Benefit model was utilized to measure the financial value of IT adoption.


Benchmarking analysis:

  • Health IT spending: At higher ration in VA.
  • Adoption of health IT: VA has 100% adoption of several VistA components, whereas private sector is in initial phase of IT adoption.
  • IT-related quality measure performance: Observed higher at VA.

Cost-Benefit analysis: The cost was estimated to be $4.07 billion for developing, implementation and maintenance of VistA. The benefits were estimated to be $7.16 billion.


The VA has developed and implemented health IT program in phases over 20 years. The VA has spent significantly greater amount in investing in health IT (4.76%) compared to private sector (3.97%)[1]. Based on the cost and benefit analysis of VA for duration 2001-2007, it can be noted that in the initial years the cost is much higher compared to benefit. This initial cost is attributed to purchase of hardware, development and training. By 2003 the benefits and cost come to par and in the later years the benefits continues to rise whereas the cost remains stagnant, that is the cost related annual operation and maintenance. Similarly, the functionality and benefits of health IT are more observable in VA when compared to the private sector. The private sector is still in early stages of health IT adoption, thus as seen with VA, the cost for health IT are more likely to be higher than the observed benefits. Further, as the private sector increase the use of health IT, similar level of improvement in performance, preventive care and decrease of redundancies can be expected.


It’s not a controlled experiment and of limited scope, thus unable to infer causality. Project data were used instead of actual data for cost-benefit analysis. Potential benefits from IT adoption verses realized benefits were reported.


VA has been a pioneer in adopting health IT to provide better care and improve access to healthcare. Private sector has been slow in adoption of health IT for various reasons. But, with the HITECH act private sector is showing momentum in health IT adoption. The experience at VA about adoption of heath IT can act as a guide to understanding health IT implications in private sector.


  1. Byrne, C. M., Mercincavage, L. M., Pan, E. C., Vincent, A. G., Johnston, D. S., & Middleton, B. (2010). The value from investments in health information technology at the US Department of Veterans Affairs. Health Affairs, 29(4), 629-638.