With the recent passage of the $787 billion American Recovery and Reinvestment Act of 2009 (the “stimulus package”), the opportunity for meaningful progress on the adoption and use of health information technology has never been greater.  The HITECH (Health Information Technology for Economic and Clinical Health) provisions of the Act dedicate $19.2 billion to the “meaningful use” of health information technology, while additional provisions in the Act provide nearly $10 billion more for areas such as telehealth, broadband adoption and community health.  This level of funding compares favorably to the estimated $26 billion spent on Health IT by the entire healthcare industry in 2008, and dwarfs the $356 million in venture capital put into Health IT companies in 2008.   Stephen Lieber, president and chief executive officer of the Healthcare Information and Management Systems Society, said for Health IT advocates, “…it’s the most important bill in our lifetimes.”  

Of great importance in the HITECH provisions is the $17.2 billion allocated for incentive payments to physicians, hospitals and other clinicians for the adoption and “meaningful use” of certified electronic medical records.   Key incentive features of the Act include:

• Actual new funding will likely exceed $35 billion as the $17 billion figure is net of savings from EHR adoption as scored by the Congressional Budget Office.
• Physicians that demonstrate meaningful use of certified EHRs can earn up to $41,000 over 5 years, and can earn an additional $20,000 for specific PQRI reporting and electronic prescribing.
  
• Incentive payments begin in 2011 and diminish each year over a five year period.  After October 1, 2015, physicians that don’t demonstrate “meaningful use” stand to be penalized 1-3% of their Medicare billing.
  
• Hospitals can earn an estimated $6-16 million in incentive funds for “meaningful use” of certified EHRs, according to a formula based on number of Medicare discharges.
  
• Like physician incentives, the incentive level for hospitals diminishes each year over a 4 year period, starting at a base of $2 million.

There are several key features that deserve comment. First, clinicians and hospitals benefit most from early adoption and use of EHRs, beginning in 2011. Second, healthcare organizations that are already pursuing physician EHR adoption strategies through relaxation of the Stark laws potentially have a new and significant source of funding support. Third, and most critical to companies like Certify Data Systems, the provisions of the Act put enormous interpretive focus on the phrase “meaningful use”. Specifically, it is not an EHR procurement incentive, but an EHR use incentive, which should mean that hospitals and clinicians that already have EHRs should be eligible for incentive funds so long as they can demonstrate meaningful use. Finally, meaningful use has been interpreted to mean that physicians and hospitals are using certified EHRs to improve patient care quality, including the use of electronic prescribing, quality reporting, and health information exchange.

Health information exchange is a specific requirement for both physicians and hospitals to be eligible for the incentive funds, and figured prominently in the CBO’s estimated $10 billion in savings scored for the HITECH provisions. Health information exchange typically means exchange of clinical information between different (and typically independent) clinical settings, such as lab results, radiology reports or images and discharge summaries, and can be done in a proprietary manner. Solutions that allow the movement of such information between clinical organizations is a powerful demonstration of health information exchange, and ultimately optimizes the value of any investment in EHRs.

As would be expected, many aspects of the program are dependent upon administrative rulemaking, which is never an easy process to predict.  It is also unclear whether hospital based physicians and physicians that do not have a significant Medicare volume (such as pediatricians) will benefit.   However there is significant promise ahead for the improvement of patient care through the use of health information technology, especially if “meaningful use” is as at least as important as simple adoption.