A poll linked on the front page is showing that the majority of Americans do not believe that the introduction of EMR can reduce healthcare costs. There's plenty of reason for healthy skepticism of all the promises made by EMR, but there's also a lot of reasons for optimism.
Disclaimer: I work in the technology marketing field. I'm not affiliated with any one company, but I have discussions with other IT workers in the healthcare industry in a regular basis. IT departments and Informatics in healthcare are sucking up more and more of a hospital or clinic's operating budget, and that's even without EMR.
The problem is that many of the systems that are being used as the core processors for healthcare are aging. IT infrastructures are upwards of 30 years old in some places, and the cost to maintain those old dinosaurs is getting worse by the year -- not to mention that many of the technicians who work on them are gearing up for retirement. The old machines are inefficient, the spaghetti code they run is out of date and often closed off to all but the internal network for security reasons, and getting EMR programs that can run on them without significant upgrades is almost imposssible.
Healthcare systems that implement EMR have the option to start from scratch. They can upgrade their old machines at the same time they roll out new CRM/ERP solutions that faciliate EMR. Although the intial cash payout for a brand new system is tremendous (and this is why so many hospitals are getting stimulous money for EMR) the overall savings from them can also be tremendous if it's done right. Some hospitals have cut informatics operating costs by 20-40% after successfully rolling out a new ERP that includes EMR.
My father worked civil service in the records department for a major Army medical center after he retired from the Army. I remember the giant warehouse, filled wall to wall with shelves and shelves of soldier's medical records and cubicles for the workers who had to pull them down and file them. The line to pickup records for a hospital visit was frequently very long, but if I had to go in my mom would call ahead and my dad would pull down my personal record ahead of time so we'd skip the line. With EMR, those shelves - the hardcopies - would be gone. Instead of having to physically get up and retrieve a record, then hand it to the patient to take to his department (or a nurse, etc), a doctor or nurse can call the patients record up in their room, on the floor, whever they are, without having to deal with a fat physical file. EMR solutions also allow for quicker navigation within a file.
The end result is less time spent retrieving and storing information in the file, which means less hospital staff to actually deal with medical records in the first place. Of course a records department will still exist, but instead of vast vaults of paperwork, everything will fit nicely on a storage system with daily tape backups made for data integrity.
(This also has the secondary cost savings of reducing the actual amount of paper used by a hospital -- and the number of trees destroyed in the process!)
EMR can also be accessed by people outside of the hospital, which does bring up another concern about data security. However, secure digital networks can be implemented to avoid unauthorized access -- even my video game requires a six digit code generated from a token these days for additional security, making it incredibly difficult to access without authorization. Mainframe systems and similar relics from the 80s were "closed" systems, making them virtually unaccessible from outside the network. Modern systems are "open" to allow remote access. There is a tiny risk of data being comprimised on any open system, but that risk is one that even banks take, and it's far more likely that data will be taken from a stolen laptop than it is from the server where EMR are stored. The banking industry uses open systems to allow data from one branch to another without anyone questioning it, so there's no reason to be concerned about hospitals doing the same thing.
What does that have to do with health savings? You will no longer need to bring copies of your records with you to a specialist, saving paper. You will no longer have to spend hours on the phone dealing with your insurance company because they couldn't read your doctor's handwriting on a chart. You don't have to worry about expensive complications if you get into a life-threatening accident because an ER didn't know you were on certain medications or had certain health conditions.
EMR won't save healthcare alone. They won't even be a significant factor in reducing costs if other changes aren't made (although the environmental impact from reducing the amount of paper used is significant by itself.) But as part of a comprehensive healthcare overhaul, setting standards for EMR and forcing hospitals to open up their records to each other will help to reduce costs and headaches for patients, doctors, and insurance companies alike. Ideally, the healthcare overhaul will take steps toward a single payer system, such as a central records database that is managed by the government instead of individual hospitals. Getting everyone onto EMR, open systems, and standardized formats for data is the obvious first baby step toward that.
Edit: Acronyms as requested - EMR is Electronic Medical Records. CRM is Customer Relationship Manager, or software for businesses to keep records on file for customers and clients. ERP is Enterprise Resource Planner, or backbone software for businesses to run internally.