Affordable, quality health care. For everyone.

The Economic Benefits of Health Information Exchange Interoperability for Australia



The Issue

Studies indicate that health information exchange can result in improved health care quality, safer care, and financial returns. Peter Sprivulis, a 2004–05 Harkness Fellow in Health Care Policy and Practice, and his coauthors estimated the costs and benefits of creating an interoperable health information exchange system among Australian health care providers and stakeholders. 

What the Study Found

The authors developed a model to predict the costs and benefits of four increasingly more sophisticated levels of interoperability: 1) paper-based or non-electronic exchange (e.g., via mail or telephone communication), 2) machine exchange (e.g., via faxed or scanned documents sent as PDFs), 3) machine readable (e.g., e-mail exchange through incompatible/proprietary file formats), and 4) machine interpretable (e.g., automated exchange of structured data using standard formats). They found that rollout costs for levels 3 and 4 were projected to be $21.5 billion and $14.2 billion, respectively, and the annual costs would be $1470 million and $933 million, respectively. Net savings for level 4 interoperability would be $2050 million—$1710 million more than projected level 3 benefits, due to reduced costs related to the standardization of level 4 content.


The authors suggest that, to ensure value from an investment in interoperable exchange, rigorous standards for level 4 interoperability, including standards governing the content of clinical messages as well as the exchange medium, need to be developed and implemented across Australia.

Publication Details

Publication Date: June 28, 2011
Author: Peter Sprivulis, Ph.D., Jan Walker, R.N., M.B.A., Douglas Johnston, M.A., Eric Pan, M.D., Julia Adler-Milstein, B.A., Blackford Middleton, M.D., M.P.H., M.Sc., and David W. Bates, M.D., M.Sc.
Summary Writer: Martha Hostetter
Citation: P. Sprivulis, J. Walker, D. Johnston et al., "The Economic Benefits of Health Information Exchange Interoperability for Australia," Australian Health Review, Nov. 2007 31(4):531–39.