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May 2009

David Blumenthal on How to Spur Adoption of Health Information Technology

In late March, the Department of Health and Human Services (HHS) named David Blumenthal the National Coordinator for Health Information Technology.  In this role, Dr. Blumenthal will be responsible for “leading the implementation of a nationwide, interoperable, privacy-protected health information technology infrastructure as called for in the Health Information Technology for Economic and Clinical Health (HITECH) Act—within the American Recovery and Reinvestment Act (ARRA).”[1]  In an article for the April 9, 2009 edition of the New England Journal of Medicine, Dr. Blumenthal discusses ARRA’s $19 billion program to promote the adoption and use of health information technology (HIT), with particular emphasis on electronic health records (EHRs).[2]

Dr. Blumenthal explains that electronic information systems are crucial to improving both the quality of health care and the efficiency of health care systems.  President Obama has pledged that every American by 2014 will have access to an EHR, but substantial challenges confront HIT expansion.  For starters, only about 17 percent of doctors and 10 percent of hospitals currently have even basic EHRs.  Notwithstanding the significant cost associated with EHR installment and the perceived lack of financial return on this investment, there is also the fear that an all-out emphasis on HIT could lose sight of the ultimate goal of improving health and health care.  Dr. Blumenthal makes clear that he will need to ensure that this goal is central to the strategic plan he creates for a nationwide interoperable health information system.[3]

Here are some of the key figures and pieces from the article:

  • The HITECH Act allocates $17 billion in financial incentives designed to get doctors and hospitals to adopt and use EHR.
  • Beginning in 2011, physicians can receive extra Medicare payments for the “meaningful use” of a “certified” EHR that is capable of exchanging data with other parts of the health care system.[4]
    • EHR adoption in 2011 or 2012 means payments can total as much as $18,000 in the first year, as opposed to $15,000 for adoption in 2013.  The payments decline each year, until they end completely in 2016.
    • A physician who demonstrates meaningful use starting in 2011 could collect $44,000 over 5 years.
  • The estimated cost of purchasing, installing, and implementing an EHR system in a medical office is about $40,000.
  • Physicians can receive subsidies through the Medicaid program if their patient mix consists of at least 30 percent Medicaid patients.  Doctors must choose between participating in either the Medicaid or Medicare bonus program, if eligible for both.
  • Physicians who are not using EHRs meaningfully by 2015 will lose 1 percent of their Medicare fees, then 2 percent in 2016, and 3 percent in 2017.
  • Physicians and hospitals will need technical help if there is to be widespread adoption of HIT.  ARRA allocates $2 billion to Dr. Blumenthal’s office in order to put these support systems in place, and $300 million to support the development of health information exchange capabilities at the regional and state levels.
  • The infrastructure to support HIT adoption has to be in place long before 2011 if physicians and hospitals are to take full advantage of the more generous Medicare and Medicaid bonuses.
  • On a broader scale, the capacity for HIT adoption to distinctly improve health and health care will rely heavily on a change to payment incentives within the health care system so that providers can be properly rewarded for improving quality and efficiency through HIT.[5]

[1] HHS Names David Blumenthal as National Coordinator for Health Information Technology, U.S. Department of Health and Human Services, Press Release, March 20, 2009.
[2] Blumenthal, David.  Stimulating the Adoption of Health Information Technology, The New England Journal of Medicine, 360;15, April 9, 2009.
[3] Ibid.
[4] According to a May 8, 2009 article in CongressDaily, HHS plans to issue guidance and specifications on the definition of "meaningful use".
[5] Ibid.