Governments Health IT Rhetoric Comes Up Short on Cash

Opinion: An unfulfilled request for $50 million in health IT funding, which Congress didn't include in its spending bill, could have provided powerful seed financing for new projects. Until EHRs improve, there won't be a market for them.

A request for $50 million to fund health IT projects didnt make it into the spending bill passed by Congress late last month. Despite the praise heaped on David Brailer, the nations health IT czar, apparently no politician, including President Bush, saw fit to back the rhetoric with cash.

While government funding for health IT is expected from other quarters, the decision is disappointing. Electronic patient records and e-prescribing promise to decrease medical errors, increase preventive health care and ultimately save money while improving health.

Infusing health care with the power of information technology will cost more than $50 million, but that amount could have provided powerful seed financing for new projects demonstrating its potential. Potentially more powerful would have been the message sent to those physicians, vendors, and health care payers still leery of investing in technology.

I think EHR vendors, whose products are still clunky, will have a hard time moving into physician offices without government incentives.

"The one place for market failure is small physician practice," said John Glaser, CIO of Partners HealthCare System Inc., an integrated health care delivery system including Brigham and Womens Hospital and Massachusetts General Hospital.

Glaser recently led a well-respected analysis showing that without policy changes and financial incentives, the business case for using electronic patient records is not viable for physicians working in small to midsize offices.

For small physician offices, the cost of installing systems overwhelms the savings.

Vendors find working with hospitals to be much more profitable, even though they employ fewer physicians. Hospitals buy more equipment and can be supported much more efficiently. Vendors "lose a lot of money to serve the little guys," Glaser said, particularly because of the time and traveling costs to provide on-site service to just a few physicians.

Even with support, physicians may not feel that an electronic health record makes their day-to-day work easier. The systems "require that you do a more rigorous job documenting your care. Youll be doing well if its net-neutral on your time."

According to Glasers estimates, physician offices initially lose money after installing EMR [electronic medical records] systems. "For the first three months, you get a productivity hit of 25 percent."

Physicians are paid for how many patients they care for, and such budget cuts are often not tenable. After a system is running well, a physician practice might gain $2,000 in increased efficiency, Glaser said—and even then, the system will probably cost five to six times that amount.

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Ideally, health care payers— who receive much of the savings in improved care—would make up the difference. But health care payers have been slow to compensate health care providers for using them.

Jonathan Javitt, chairman of the health subcommittee of the presidents IT Advisory Committee, told me that vendors need to find more ways to advance their business without relying on government funds to make their products more convenient.

IT vendors should "invest more in R&D to make EHRs more ergonomic and less intrusive to users," Javitt said. "The paradigm of screen and keyboard needs to be challenged by point and click, by voice recognition and by smart devices, such as blood pressure machines and a host of similar products that talk to computers."

In addition, he said, vendors should show physicians stronger evidence that IT is going to improve care in the setting in which they practice.

Glaser agreed that current IT offerings are still clumsy but said, "I dont believe that thats the hurdle. Scandinavia and England have adoption rates that are up to 70 and 90 percent."

The key difference in those countries, of course, is the way government supports health care.

Everyone Ive spoken with agrees that the solution is EHRs that require less training and dont require much ongoing technical support. Javitt has a valid point, but until EHRs improve, there wont be a market for them. And without a market, vendors wont have revenues to devote to research and development.

Government funding could have helped move us over the hump.

Industry consortia eventually will provide standards and certification; this will help health care providers select and use technology.

Still, in an industry struggling to garner momentum, a little push of government funding promised to become a powerful forward thrust.

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