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Bipartisan Health IT Support and ARRA Insulate EHR Incentive Funds From Budget Cuts

A physician colleague recently asked me why I am confident that CMS will not cut off EHR incentive funding in the future.   This question is important to him and other physicians who plan to qualify for up to $44,000 in CMS incentive payments by achieving the meaningful use of EHRs.   They fear that the dragging economy and political discord will result in budget reductions that will cut this and other important health IT funding programs.    What I see, though, is a decade-long track record of bipartisan support for health IT initiatives and a 2009 federal law that requires CMS to provide funding for the EHR incentives and other health IT programs.

In his 2004 State of the Union speech President Bush envisioned the adoption of EHRs for all Americans by 2014.   Since then bipartisan support at both the state and federal levels for health IT initiatives toward the achievement of that vision has held strong.   At the federal level CMS  not only established a new office in 2004 to support health IT, the Office of the National Coordinator of Health IT (ONC) but has also increased funds to support ONC initiatives which promote the adoption and use of EHRs.  CMS works collaboratively with ONC and has consistently shown an understanding that the broad adoption and effective use of EHRs are necessary to better manage spiraling healthcare costs.   CMS understands that the data captured by EHRs is superior to claims-based data when attempting to analyze quality and establish benchmarks.    Physicians have long complained that claims-based data is incomplete and does not fairly demonstrate the quality of care they provide.     EHRs must be broadly adopted in order to capture accurate and meaningful data that can then be used to improve quality or save costs.  

It is important to recognize that CMS is required to provide EHR incentives to physicians by law.   Specifically, the $800 billion American Recovery and Reinvestment Act (ARRA) of 2009, commonly refered to as the Stimulus Bill, allocates over $36 billion to health IT programs through the Health Information Technology for Economic and Clinical Health (HITECH) Act.   This funding includes an estimated $34 billion for the Medicare and Medicaid EHR Incentive Program and over $300 million to support state-wide health information exchange efforts.

In order to cut funding for EHR incentives, this means that bipartisan support would have to be garnered in the House and Senate to rescind ARRA or part of ARRA.   The intent of ARRA  initiatives is to stimulate economic activity and produce jobs.   In the current economic environment it would seem very risky, perhaps even foolish, for a politician to drum up support for new legislation that eliminates economic stimulus activity, especially if that activity is already producing jobs.

So, is the EHR Incentive Program stimulating the economy and producing good jobs?   I am not an economic expert, but from what I see around me the answer is clearly, "yes".    I see job openings in the local paper for healthcare system IT analysts and other staff, I speak with IT consultants most of whom are actively seeking personnel, I hear about physician offices investing into the economy $10,000-$70,000/doctor to implement EHRs or upgrade other office technologies, I read about physicians receiving $44,000 federal incentive payments and about hospitals receiving larger amounts, some of which is surely returned into local economies.  The graph below is a composite view of the 3-year stock performance of the health IT sector since 2009.   EHR vendors and other health IT companies appear to be thriving well since ARRA was passed despite the depressed economy.

HIT Sector performance

I suspect that several years from now when experts analyze the impact of the $800 billion stimulus package, the puny $36 billion provided to health IT initiatives through the HITECH portion of ARRA will go down as perhaps the most bang for the buck in terms of stimulating the economy.  

The EHR incentive funds appeared to be well insultated from budget cuts for these same reasons. 

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