A Big Stimulus Boost for Electronic Health Records

Wiring up physicians from small practices will be one of the biggest hurdles.

Physicians and information specialists across the country are feverishly figuring out how to best prepare for the impending availability of $19 billion designated for health-care IT spending in the newly signed stimulus bill. Broadly deploying electronic health records (EHRs), they say, will require special support for small private practices across the country. These physicians provide up to 80 percent of the nation's health care, but fewer than 20 percent of them are currently using EHRs.

Credit: Technology Review

The bulk of the stimulus funds--$17 billion--will go toward incentives in the form of Medicare and Medicaid reimbursements for physicians and hospitals that use electronic systems. Starting in 2011, physicians using health information technologies, such as EHRs and electronic prescribing systems, will be eligible for $40,000 to $65,000, and hospitals will be eligible for several million dollars. The incentives would be phased out over time, with penalties for those who fail to adopt electronic records within five years. "I think many people were disappointed that incentives won't kick in for a couple of years," says David Bates, chief of the Division of General Medicine at the Brigham and Women's Hospital, in Boston. "But those incentives are going to be substantial, and I think [practices] will start to adopt electronic health records now."

Only about 4 to 25 percent of providers in the United States use electronic record-keeping systems, depending on the size of the practice. The bill won't require that all doctors use EHRs, or directly pay for the software. But its incentive program will help overcome the major barrier in getting physicians to adopt these systems. While doctors must spend $40,000 to $50,000 to buy an EHR system and may lose significant productivity in the first few months of use, with the current system, it's insurers and payers rather than physicians who would reap the savings that EHRs would bring, says John Halamka, chief information officer and dean for technology at Harvard Medical School. The system is similar to that employed in Denmark, which has some of the highest EHR use in the world.

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In addition, the bill creates an Office of the National Coordinator of Healthcare Information Technology, a body within the Department of Health and Human Services, to oversee adoption of EHRs and to set standards and best practices. That office will dole out funds, along with the National Institute of Standards and Technology and other federal agencies.

To get the incentives, physicians and hospitals must meet certain requirements, most notably using electronic systems that can share information between different providers and institutions. That is no small feat, and the remaining $2 billion in stimulus spending has been designated for the development of standards and best-practice guidelines over the next two years, as well as for training programs for the legion of health-care IT workers needed to implement these systems. "There is a huge gap between the number of people trained in this area and the number of people we need," says Bates. "Almost every practice of 10 to 15 physicians will need someone technical to help them out."