The CBO recently released a paper titled "Evidence on the Costs and Benefits of Health Information Technology." The upshot:
The potential of health IT to reduce spending for health care depends in large part on its ability to make care more efficient by cutting the cost of delivering services, avoiding redundant services, and improving providers' productivity. Evidence from the literature on health IT, however, does not uniformly support the possibility of such savings.The potential for savings appears to depend heavily on their source and whether that source is in a hospital or in an ambulatory care setting (such as a clinic or a physician's office). In addition, savings are difficult to assess because the trimming of costs in one area of a physician's practice, for example, may be offset by increased costs or reduced efficiency in another area.
The CBO director commented on the paper in his blog (which Supraspinatus also links to in the right-hand column):
Research does indicate that in some instances, health IT appears to have reduced the cost of providing health care, helped eliminate inappropriate services, and improved the quality of care. In general, however, health IT appears to be necessary but not sufficient to generate cost savings; that is, health IT can be an essential component of an effort to reduce cost (and improve quality), but by itself it typically does not produce a reduction in costs.
The paper itself is worth reading for anyone that deals with progressive health IT issues.