What The Stimulus Package Means to Healthcare IT

(Sept. 9, 2009)

If all goes according to plan, the stimulus package, signed into law by President Barack Obama earlier this year allocating $19 billion in funding for healthcare information technology initiatives, will kick-start a transformation of the entire US healthcare system, according to some industry leaders.

Included in the American Recovery and Reinvestment Act (ARRA) are incentive payments to physicians and hospitals, who, under certain conditions outlined in the program, implement and use electronic medical records (EMRs).

Other goals of the ARRA are even more ambitious and include the provision for the widespread implementation and use of EMRs for all Americans by 2014. This, say ARRA advocates will not only keep the US healthcare system vital, but will streamline the use of healthcare records, provide for faster and more accurate diagnoses and reduce costs, errors and duplicate procedures and tests.

Under the new program, physicians could receive as much as $65,000 in provider payments under Medicare and Medicaid. Hospitals are eligible for up to $2 million in payments but providers who do not adopt the new technology could face financial penalties beginning in 2016.

Another stipulation of ARRA is the availability of grants, which can be used for healthcare IT architecture, training for healthcare professionals, development of best practices methodologies, interoperability between different provider systems and telemedicine.

The Centers for Medicare and Medicaid Services (CMS) began releasing the IT funds from the stimulus package to state Medicaid programs this month. According to a letter sent by CMS to state Medicaid directors, the ARRA "enables the government to pay a 100% federal financial participation (FFP) match to states that help Medicaid providers adopt, implement or upgrade certified electronic health record technology to demonstrate meaningful use."

The agency also advised organizations who plan to apply for an FFP match to be ready to produce a plan illustrating how they will audit their healthcare IT incentive payment programs for errors.

While it appears that many consumers and providers are slowly beginning to embrace the use of EMRs, many questions remain -- primarily those surrounding privacy, security and ownership. Furthermore, considering that currently, only 12% of physicians and 11% of hospitals use this technology, according to the Congressional Budget Office report released in May 2008, even a five-year timeline for implementation appears to be a near impossible task. Hospital and physician group administrators will be looking to IT leaders and experts for answers. Identifying and working with competent and knowledgeable vendors will be critical to a successful transformation from paper to computerization.

As such, the role of the IT manager and CIO will only continue to become more central and crucial to healthcare facility operations as physicians and hospitals grapple with this new set of mandates and embark on the long journey of conversion, implementation, training and finally, full usage.