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May 11, 2009

The Big Push
By Lindsey Getz
For The Record
Vol. 21 No. 10 P. 8

What does the president’s stimulus package mean for EHR adoption?

In February, President Obama signed into law the stimulus package known as the American Recovery and Reinvestment Act of 2009. This voluminous piece of legislation includes more than 100 pages dealing directly with funding to stimulate the adoption of electronic health records (EHRs), which has been dubbed the Health Information Technology for Economic and Clinical Health (HITECH) Act. The HITECH Act has committed $19 billion to advance HIT use through monetary incentives, with up to $44,000 available per eligible physician and potentially millions for eligible hospitals that can demonstrate meaningful use of an EHR beginning in 2011.

Obama has said that one of his primary goals for encouraging the national adoption of EHRs is saving money—he estimates around $80 billion per year, though that figure has been questioned. Most recently, an op ed piece published in The Wall Street Journal by Jerome Groopman, MD, and Pamela Hartzband, MD, argued that the president’s figure is exaggerated and taxpayers shouldn’t be misled to believe the act will save that much money. Obama has said his other reasons for encouraging national adoption are that EHRs will help hospitals prevent or lower the number of medical errors, reduce malpractice lawsuits, and facilitate overall better care.

The recovery and reinvestment act’s ambitious goals include having the majority of healthcare providers utilizing EHRs within the next five to seven years. “As it has been stated elsewhere, the enormity of this plan is comparable to the NASA moon program of the 1960s—except I believe it is actually more difficult than that,” says Jim Tate, an e-health consultant for EMR Advocate. “The sheer number of implementations, individuals requiring training, and the challenges that will need to be overcome is gigantic.”

But most believe success is likely, at least in the idea that many will adopt EHR technology because the monetary incentives are so enticing. “With this act, it’s almost crazy not to adopt EHRs because we’re talking about a significant amount of money,” says attorney Steven J. Fox, a partner and the chair of Post & Schell’s Information Technology Group and a national expert on IT, e-commerce, and healthcare information. “From my discussions with hospitals and other physicians, the consensus seems to be that leaving that large sum on the table would just be foolish. Some hospitals I’ve spoken with are anticipating this will bring in millions.”

Tate agrees that the incentives will lead to higher adoption rates, despite the barriers. “While the implementation of electronic systems into paper-based environments is difficult and there are numerous challenges to the transition, the financial incentives are so significant that I believe we will see a large number of physicians make the move to adopt EHRs,” he says.

However, while most experts agree that the stimulus package will prompt change, many argue that it won’t help alleviate the concerns that have so far made adoption slow or problematic. “This ‘carrot-and-stick’ approach in the stimulus bill will ultimately succeed in getting the majority of providers to transition to EHRs, but it will not happen overnight,” says Pat King, JD, MBA, principal of Digital Age Healthcare, LLC. “The big problems for small physician practices are still the up-front investment and the change in work processes that the transition will create. There was $2 billion in the stimulus bill for start-up costs to be distributed to the states for loan and grant programs, but no one knows how that will be administered. For many physicians, the lost time while they and their office staff adapt to new processes is as significant as the investment in the technology.”

Jeffery Daigrepont, senior vice president of The Coker Group, national consultants to healthcare providers, has witnessed a mixed reaction to the president’s plan. While most agree the incentives are enticing, money hasn’t necessarily been the only issue that’s delayed adoption in the past. “There have always been inexpensive and even free EHRs out there, so I don’t believe it has only been a matter of money,” Daigrepont says. “The real issue is whether EHRs are going to help doctors use those electronic tools in a meaningful way, and that’s still a question for some. As adoption occurs, the concern will be whether most doctors can change their behavior in how they operate their practice and still keep their productivity up.”

Daigrepont argues that the ultimate success of HITECH will be based on whether doctors are able to be more efficient and productive when using EHRs. “The healthcare industry’s current payment system is based on productivity, or how many patients you can see in one day,” he says. “If that slows down, then the government is going to find that EHRs don’t have all of the benefits they expected.”

Beyond adoption, Fox believes the ultimate goal should be interoperability. “Trying to encourage not just adoption of EHRs but having them all interconnected is definitely the next step and perhaps even the definition of success in the end,” he says. “Hospitals need to be connected with one another or the EHRs are not being used to their full potential. Take Philadelphia, for instance. There are a lot of hospitals there but almost no connectivity among them. If a patient has his records at one hospital but gets taken to a different hospital, there’s no way to access his records, even if they do have an EHR in place.”

What It All Means
Though HITECH may be only a first step, it’s believed to be an important one, and it does have many EHR advocates pleased with its perceived ability to stimulate adoption rates. Still, much confusion has been generated about who will qualify for the rewards. The act states that “meaningful users” are in line to earn the incentives, but the law does not yet provide a clear definition about what that exactly entails. “This will be left to the secretary of Health and Human Services [HHS] to determine those guidelines,” says King. “But meaningful use will include use of EHR technology for e-prescribing and electronic billing and will likely also include automatic capture of data for quality purposes, though that element remains to be defined.”

The HHS secretary has until the end of the year to publish the guidelines, leaving much speculation and not much certainty around the term meaningful use. “We can speculate that being a meaningful user will require some sort of documentation,” adds Jonathan Teich, MD, chief medical informatics officer at Elsevier, a global multimedia publisher of scientific, technical, and health information products. “It could range from owning a system that qualifies to actually documenting implementation and sufficient usage to showing actual change in the practice’s performance. I believe it will probably not go as far as reporting on actual clinical outcomes because that takes a few years to be generated, but hospitals and physician practices can expect that some of these things will be required.”

While there are not a lot of specifics at this point, the law does state that certified EHR technology must have an e-prescribing component for physicians. It also reads that the technology must be certified and interoperable, says King.

As more guidelines are established, Daigrepont says meaningful use must be balanced against productivity. For example, if the guidelines established for meaningful use slow down doctors, then there will be a resistance to adoption.

Besides the incentives, there’s another reason why healthcare organizations will want to start thinking more seriously about implementing an EHR. The HITECH Act has not only provided for rewards for those who adopt EHR technology and achieve meaningful use, but it also penalizes those healthcare providers who fail to do so. For providers who have not achieved meaningful use, Medicare reimbursement fees will be reduced by 1% in 2015. The penalty then increases to 2% the following year, with more deducted with each passing year, peaking at up to 5% if meaningful use has not been demonstrated by 2018. The idea of losing money when extra could have been obtained is believed to be yet another incentive for adoption. “It’s by no means a large amount that is deducted, but it also just doesn’t make sense anymore not to adopt,” says Fox.

“Considering the escalating penalties that will kick in for organizations that do not implement by 2015, it would be difficult to understand why someone would not take advantage of these incentives,” agrees Ron Sterling of Sterling Solutions, Ltd. “Also significant is the fact that healthcare organizations that do not implement EHRs when their competitors are may be perceived as less effective or up-to-date. In a few years, lack of an EHR may be perceived as an impediment for patient care and patient service by those who have benefited from the effective use of EHRs.”

Most experts agree that the penalties not only serve as another incentive for adoption but are definitely fair “punishment” for those who don’t, assuming the initial phase of adoption is a success. “The penalties are fair, assuming the goal is important and valuable—and assuming that meeting the requirement is feasible,” says Teich. “That will be determined in time. But even so, the government is giving hospitals six years until any penalties are invoked, which is a lot of time. And even then, the penalties are phased in slowly.”

Others argue that there is no question the government would be right to institute penalties. “The government pays so many medical bills through Medicare and Medicaid, not to mention that they are the largest employer in the country,” adds Sterling. “If there are systemic savings from using an EHR, then the impediments to benefiting from such savings are just not tolerable for the biggest payer of them all.”

Making Changes
With the HITECH Act signed into law just this year, the fact is there isn’t much of a window to start making these changes that surely will have long-lasting effects. “It’s barely enough time,” admits Fox. “It can take a lot of time for a hospital to become fully implemented and, for hospitals, we’re actually talking about the fiscal year of 2011, which begins on October 1, 2010. For physicians, the law uses calendar year 2011, starting on January 1, 2011, so either way, it’s not much time at all.”

“Time is definitely a limiting factor,” agrees Sterling. “In some cases, it may be a multiple-year project in order to institute an EHR. And that timeline could be even further extended if the hospital or practice is using an antiquated billing system that cannot or will not work with an electronic system.”

The catch-22 is that making steps toward implementation now may be challenging when the guidelines are still being established. Daigrepont suggests that those organizations that make the move to partner with a vendor should take steps to protect themselves and ensure they are making a wise investment. “Ask the vendor to comply with the HITECH standards as part of your signed contract,” he says. “This will help protect buyers in that the vendor will be contractually obligated to be in compliance with those standards when they do come out.”

A hospital or physician office may want to consider the payment terms with the vendor, contingent on acceptance or their ability to comply with the guidelines. “Essentially, they may say, ‘I will pay for my system, but a certain percentage of payment will be contingent upon compliance,’” he says. “And if for some reason the vendor does not become compliant, then the contract should state that the buyer has the right to suspend their maintenance fees until compliance does occur. If not, the buyer suffers by missing out on the incentive and may even have to buy another system.”

Before a vendor is even selected, there are a number of moves that hospitals and physician practices can make to prepare for EHR adoption, Daigrepont says. “Whether it’s getting networks up-to-date or getting work stations current, there’s more to EHR adoption than just adding the technology,” he says. “Start making some of those changes now. Then start doing your research, so you can ultimately find the right vendor to partner with.”

“For those who plan to adopt in time to be considered for incentives, it definitely means starting now,” says Teich. “Offices and hospitals should get their plans and finances in order. To put together an entire hospital system from scratch, it will take longer than 2011, but many hospitals have already put some systems into place.”

Whether or not hospitals and physician offices make the changes in time for the incentives, it does appear that the president’s plan might finally be the push that sets real change in motion. As Daigrepont says, “It’s no longer a matter of if we should do this, but when.”

— Lindsey Getz is a freelance writer based in Royersford, Pa.