Experts Evaluate Federal Plans for Funding Health IT in Physician Practices

Vital Signs: May 2009

The economic stimulus bill that became law in February contains nearly $40 billion to help the nation’s physicians, hospitals, and health centers embrace health information technology — and thereby improve health care quality and better contain costs.

According to an approximate, per-capita estimate by the Massachusetts Health Data Consortium (MHDC), that would translate into a $767 million “e-health” windfall for Massachusetts, beginning in 2010 and running through 2015. Of that ballpark amount, about $727 million would be available in direct incentives to the state’s physicians and hospitals through the federal Medicare and Medicaid programs. Another $40 million would, in part, go toward grants or loans to help practices acquire necessary equipment for electronic health record (EHR) systems.

“I think this is good for doctors and hospitals — and for the health care system as a whole,” said Ray Campbell, MHDC executive director. “But it also has flaws.”

Feds Finally Step Up

The good news, Campbell said, is the recognition that many doctors need both financial and technical support to move their practices into the electronic era. “At least the federal government is now stepping up and acknowledging it has a role to play in this,” he said.

Micky Tripathi, president and CEO of the Massachusetts eHealth Collaborative, agreed, saying the federal government has finally acknowledged that “the reason physicians have been reluctant to bear all the costs themselves is because they could see so many of the benefits going someplace else.”

These sentiments were echoed by Bruce S. Auerbach, M.D., MMS president. “It’s nice that the government is finally putting up some extra money to help doctors embrace health information technology, particularly those in small practices,” he said.

Rewards Are for “Finishers”

The program’s biggest flaw where doctors are concerned, Campbell said, is that the bulk of the stimulus money that will eventually flow to doctors will not arrive until late in the process. “This is not a bill to help get doctors to the finish line,” he said. “It is a bill to reward those that get across the finish line.”

The earliest the Medicare-Medicaid incentive payments would become available is Jan. 1, 2011, for doctors deemed by the federal government to have become “meaningful users” of electronic health records. Though that term has yet to be officially defined, it is known that at least the following three elements will be required:

•Electronic prescribing

•Connection to a health information exchange (an electronic system that facilitates access to and retrieval of clinical data across organizations within a region)

•Reporting of clinical quality data

Doctors who are eligible in 2011 would receive $18,000 for that year, likely through Medicare reimbursement, and progressively less through 2015, for a maximum total of about $44,000. There are currently no incentive payments for those who adopt EHRs after 2014, but in 2015, the program will begin to penalize physicians who do not meet the “meaningful user” test. Such doctors will see their Medicare reimbursements cut by 1 percent in 2015, 2 percent in 2016, and 3 percent in 2017.

“It’s a carrot-and-stick approach,” Dr. Auerbach said. “I don’t really have a problem with that.”

Physician Loans Spring from Grants to States

Doctors will not be able to apply for federal loan assistance themselves. Rather, funding grants for physician loans will flow from the federal government to states in a competitive process. States would then have to match 20 percent of whatever they receive. But none of this may happen before Jan. 1, 2010. Doctors who eventually get loans in this manner would have to comply with all federal requirements, such as submitting quality reports.

Campbell said that prior to enactment of the stimulus program, Massachusetts had not planned to create a loan fund, but that may now have to occur.

What Now? Health IT Guidance We asked Ray Campbell, executive director of the Massachusetts Health Data Consortium, and Micky Tripathi, president and CEO of the Massachusetts eHealth Collaborative, for tips on how physician practices can deal with health IT uncertainties arising out of the federal stimulus package: •For physicians who haven’t yet embraced EHRs, learn what’s happening. “It’s a good time for education while you wait to see what coordination and support services will be put out there,” Campbell said. •If you’ve already decided to invest in an EHR system, think about joining an organization — an IPA or PHO, for example — that has a project manager who can help you navigate the next steps, said Tripathi. •Tripathi also suggested choosing an EHR system that is certified by the federal government to help ensure eventual interoperability. •Set up an office system that enables electronic lab results, and start e-prescribing now. “If you’ve got electronic lab results and you e-prescribe, you are well on your way to being a ‘meaningful user,’ ” Tripathi said.

Enough Ongoing Support?

The stimulus law also calls for the establishment of “regional extension centers” to provide doctors with technical support and to identify and promulgate best practices. The law requires that the federal government publish a draft description of the regional centers program by the middle of this month, but Campbell said there is already skepticism within the health care community that these regional centers will work effectively.

Campbell also worries that the bill does not adequately address the ongoing support physicians will need once they’ve installed EHR systems. “Hopefully, the details of coordination and support will emerge over the spring,” he said.

Tripathi is also concerned that the program may not provide enough support to guarantee success. He said that up until now, 30 to 50 percent of EHR installations have failed. “All the government may be doing is lighting 100,000 bonfires,” he said. He said the stimulus might work more effectively if the government funds flowed through the regional extension centers rather than directly to physicians as incentives or loans. That way, he maintained, the centers could be held accountable for a practice’s technological success, and it would reduce the burden on physicians of having to figure everything out on their own.

Interoperability Issues

If the dream of vastly improved health care communications is to be realized, technology will have to evolve so that patient information, decision support, and privacy considerations all come together in a useful, seamless manner. That would mean, for example, that a doctor in Pittsfield treating a patient from Boston has electronic access to the patient’s medical records in time to be helpful.

Consequently, the new law calls for federal grants to help states (or “state-qualified” entities) establish “health information exchange” programs to make this possible. To qualify for such a grant, states must submit their plans to the federal government. “There is no model for this yet, so it’s hard to define how it will work,” Campbell said.

Getting over the Hump

Campbell expressed concern that federally supported technology programs may not be sustainable after the incentive payments run out in 2015. “There’ll be doctors graduating from medical school after 2014,” he said. “What support will there be for them?” He added that EHR systems entail “considerable operating costs as you go along… What will the federal role be in helping pay for that?”

Tripathi was less concerned about sustainability beyond 2015, saying that the value in the new program is in “getting doctors over the hump” of embracing and adopting EHRs.

But Tripathi noted that the program was still “unstructured,” particularly with regard to coordination and support. “The danger is that a lot of money could be wasted, and there is the risk of a lot of frustration,” he said. “Small practices especially will need boots on the ground.”

“Bear” of a Transition

Faced with multiple technological and financial uncertainties, what’s a physician to do?

Peter M. Barker, M.D., has an eight-physician, three-nurse-practitioner family medicine practice in Swampscott. The office has long been electronic and is now paperless. “The transition can be a real bear,” he conceded. “They tell you six months to a year, but it’s really a year and a half.”

But Dr. Barker quickly added, “I think it’s the thing to do. Right now, I’m doing the best job I’ve done taking care of patients in my whole career. It’s not just about the money. It’s about changing the whole way you do things. It’s going to be the standard of care — if not now, in a year or two.”

Dr. Auerbach concluded that “we have been given the opportunity to do something most of us realize is necessary if we are going to get our arms around quality improvement and cost containment.”

–Tom Walsh