Tag Archives: medicare

US Behind in HIT Spending – Stimulus Insufficient

Despite the fact that the US spends nearly twice as much on healthcare as any other country, the US is as much as 12 years behind other OECD countries in health information technology investment. See the Commonwealth Fund’s entry on Health Care Spending and Use of Information Technology in OECD Countries.


The American Recovery & Reinvestment Act of 2009–the Stimulus Package–apportions $19 billion for investment into the HIT infrastructure in the US. As much as $3 billion goes to the Office of the National Coordinator (which will now be codified) and other standards creating bodies. The remaining amount will be given to providers primarily through increased Medicare reimbursement. If divided evenly, each hospital would receive approximately $11 million. A substantial sum, but hardly close to the $200 million over 3 years required in a typical implementation at a 300+ bed hospital. Only 10% of hospitals currently have full electronic health records. Another 20-30% are in planning or implementation stages. The stimulus may encourage more providers to enter the planning stages and will help along those already in the process during difficult economic times. But $11 million for the remaining 60-70% is entirely insufficient.

Evidence shows that the only providers that stand to get a return on investment in HIT are large network providers with geographically distributed practices, such as Kaiser or the VA. This makes sense, as the administrative cost of sharing information is high. The early adopters (the 10%) consist of these large networks and a few providers with well-funded, forward-thinking CIOs. The 20-30% currently planning hope to break even at best and justify the investment by improved patient care (especially through CPOE). The rest are mostly too small to realize significant cost savings and will likely need much more than $11 million to break even.

Congress approves $19 billion for health IT

Excerpt by Andrew Noyes, Congress Daily from NextGov.com

Deal Leaves Money, Language On Health IT Mostly Intact

The compromise stimulus deal leaves much of each chamber’s proposed funding for health information technology intact, according to an overview circulated by House Speaker Pelosi Wednesday and a preliminary summary of the compromise that was subject to change. The final package provides $19 billion to encourage nationwide adoption of electronic medical records, with $17 billion for Medicare and Medicaid incentives for federally qualified health centers, rural health clinics, children’s hospitals, and others. The Senate version, which won approval Tuesday after members stripped out $100 billion, included $16 billion for Medicare and Medicaid incentives, about $2 billion less than the House plan that passed last month. The Senate also imposed a $1.5 billion cap on incentive payments to “critical access hospitals,” while the House included no such language. Conferees reportedly accounted for those facilities, but it is unclear whether the cap remained.

The negotiated stimulus would provide temporary bonuses of as much as $64,000 for physicians and up to $11 million for hospitals that adopt e-health records, the summary document stated. Medicare penalties for noncompliance would also be phased in starting in 2014. The package would also codify the HHS Office of the National Coordinator for Health IT and establish a transparent process for developing standards for e-health records by 2010. An immediate $2 billion would be available to HHS for health IT infrastructure, training, telemedicine, and other grants. The Senate had previously asked for $3 billion, while the House wanted just over $2 billion.

The package would also expand federal privacy and security protections for health IT, such as requiring that an individual be notified if there is an unauthorized disclosure or use of their health information and requiring a patient’s permission to use their personal records for marketing purposes. Details had not emerged by presstime about whether complaints by the privacy community had been addressed. Some watchdogs pressed conferees to take specific steps to close what they argued were marketing loopholes left open in the House and Senate versions as well as make changes to breach notification language. Several sources said they believed a House provision mandating healthcare operations rules from HHS had been dropped entirely. Providers complained the regulations could have required either prior patient consent or the use of de-identified data before information could be exchanged.