The First Step Toward Meaningful EHR Adoption

The Obama Administration’s effort to get healthcare providers to acquire EHRs is certainly much bolder and more ambitious than anything that came before it. More than $19 billion is being thrown at the problem, of which about $17.2 billion consists of direct incentives that will be paid through Medicare and Medicaid. Physicians who show “meaningful use” of qualified EHRs will be eligible for $44,000 to $64,000 in subsidies over a five-year period, starting in 2011. Physicians who don’t use start using EHRs meaningfully by 2015 will start to see reductions in their Medicare payments.

Hospitals will also receive substantial bonuses for meaningful EHR use during the same period. Beyond a $2 million base payment, their incentives will depend on a formula that includes the number of discharges, the number of inpatient days for Medicare patients, and total inpatient days and hospital charges. Hospitals that don’t adopt will lose a portion of their annual Medicare payment raises.

The Congressional Budget Office has forecast that, as a result of the health IT incentives in the economic stimulus legislation, the percentage of physicians and hospitals adopting comprehensive electronic health records by 2019 will be 90 percent and 70 percent, respectively. In contrast, the CBO says, “only” 65 percent of physicians and 45 percent of hospitals would do so on their own within the next decade, were it not for these wonderful goodies from Washington.

Some commentators talk about the “bubble” of the Beltway. Personally, I think that the denizens of Washington are living in a parallel universe. While I haven’t spoken with any hospital executives, the economic pain that many hospitals are feeling these days will make it difficult for them to invest upfront in health IT, and in fact, many say that they’re reducing their capital outlays.

As for physicians, those I’ve interviewed are amazed that the government is not providing any upfront incentives to help them acquire EHRs. But more important, most physicians are not convinced that EHRs will help them improve quality or efficiency in their current state. In the absence of any assurance that these programs can exchange key patient information or interface with labs and hospitals, they don’t see the point of acquiring EHRs. Some EHRs do have the ability to exchange data in an industry-standard format, but they’re still in the minority. Until most software vendors include this capability, there’s going to be a trust gap with physicians.

Lack of interoperability is not the only obstacle. There’s also the small issue of usability. The government will provide subsidies only for EHRs that have been certified by some entity similar to the Certification Commission for Health Information Technology (CCHIT). But CCHIT doesn’t certify that physicians in small practices will be able to adapt these applications easily into their workflow. The government might also require that EHRs be certified in 2008 or later to be qualified for incentives. That would mean that only a small number of EHRs would be eligible.

Finally, let’s be honest about how far we have to go.  While 17 percent of U.S. physicians have some kind of basic EHR, only about 4 percent have comprehensive systems that can really help improve the quality of care. So it might take more than financial incentives to get us to 90 percent adoption by 2019.

Kudos to the Obamans for recognizing how important health IT is to health care reform. But when regulations are written to implement the health IT legislation, government officials need to think through what they’re doing carefully, or they might run into more resistance than they expect.