Part of the larger, $787 billion stimulus package signed by President Obama in mid-February is $19.2 billion under a bill called the HITECH, or Health Information Technology for Economic and Clinical Health Act. Hey, no one said these things would have simple names.
That $19.2 billion directs most of the funding - $17.2 billion of it - to pay for the widespread adoption and "meaningful use" of "certified" interoperable electronic health record (EHR) technology. The other $2 billion covers a wide range of healthcare information technology projects including health records, health information exchange, computerized physician order entry, clinical decision support systems and electronic prescribing. Recently we ran a webinar about the HITECH funding - slides and an audio are available below.
The EHR funding will be administered through CMS - Medicare and Medicaid - in the form of reimbursements available to physicians and hospitals, and spread over several years. The $2 billion is allocated by the Office of the National Coordinator for Health IT to be headed by Dr. David Blumenthal, appointed to the job on March 20, 2009. A couple questions come to mind:
How do you get healthcare stimulus money? As of this week the details of the process are still being developed by several federal agencies.
So what does this mean for healthcare IT companies and how can companies get stimulus funding?
First, the stimulus funding is intended to boost rapid technology adoption in the hopes of controlling healthcare costs, making healthcare more efficient and perhaps creating jobs. Despite the fact that there are more than 200 companies offering some form of EHR technology to physicians and hospitals, adoption is still too slow - by some estimates, well below 15% market penetration with perhaps a third of those using the systems effectively. An even worse EHR market assessment was published on March 26, 2009, which said that just 1.5% of non-Federal hospitals in the U.S. are using a comprehensive EHR system. Yikes!
(An interesting recent development is the start of a backlash, often from doctors, against the orthodoxy that widespread use of HCIT technology is an unquestioned good. The latest is this opinion piece from Time, this week. Among other intriguing points, it argues that EMRs could increase healthcare costs and push providers to input inaccurate information. I’ll write more about this later.)
Second, the stimulus funding is intended to foster better integration among the various proprietary HCIT technologies, which have been notoriously complex and difficult to integrate.
Third, the EHR funding encourages adoption through a payment schedule that can subsidize the costs of purchase and implementation, but it also includes a penalty. In 2014 physicians will see reduced Medicare and Medicaid reimbursements if they have not implemented EHR technologies and are not using them effectively.
The details of accessing the ARRA and HITECH funds are not yet fully developed, but the race is on for companies to tap into these funds. Whatever the details turn out to be, HCIT companies with a strong public image and strong brand awareness will be best positioned to take advantage of this rare opportunity in which the government is essentially funding their customers to buy their products. That means HCIT companies with strong government relations, strong brands and a strong public presence must maintain and extend it. HCIT companies without those advantages had better build them, and fast.
Several of us from our Healthcare IT Practice will be at HIMSS next week. We’ll be in booth # 3145, so please stop by and let’s talk about this.
Last week saw a series of announcements and events that underscore the importance the Obama administration and new Congress have placed on healthcare information technology (HIT) to stimulate the economy and help solve a national crisis in healthcare access, costs and outcomes.
First up was the "Investing in Health IT: A Stimulus for a Healthier America" hearing chaired by Senator Mikulski's HELP Committee. It featured compelling testimony on the need for better applications to solve the electronic health record (EHR) problem, specifically interoperability.
Next up, the House Appropriations committee unveiled its $825 billion "American Recovery and Reinvestment Bill of 2009," calling on significant investments to "update and computerize our healthcare system to cut red tape, prevent medical mistakes, and reduce healthcare costs." Key provisions include billions in federal HIT funding for computerize health records, with billions more targeted at disease prevention/wellness; healthcare effectiveness research; community health centers, and training primary care providers.
The new climate in Washington provides a once-in-a-decade opportunity for HIT companies to become part of a massive and coordinated effort to fix the broken healthcare system. Healthcare IT has become a bright spot in the otherwise dismal economic climate. Schwartz Communications will continue to monitor the HCIT landscape, offering insight into turning the current legislative agenda into real business opportunity through public relations. This includes hot button issues like consumer directed healthcare, transparency, interoperability and others. Stay tuned.
Coming up: Schwartz will be conducting a free Webinar titled, "The New Administration and Healthcare IT: Positioning Your Company for Success." scheduled for Thursday, February 26 at 2:00 PM Eastern. Details to follow soon.
An Envision Solutions/Kelton Research survey found that 85.6 million U.S. adults, or 38 percent of the population, have doubted the opinion of their doctors or other medical professionals when it conflicts with information found online. Forty three percent of consumers ages 18 to 34 reported they doubted their health provider's advice when it conflicted with online sources.
Only 3 percent of Americans seeking advice about how to manage a serious medical condition would view patient developed online health information as trustworthy. I’m sure this perspective would change if a consumer was faced with a serious disease or condition, hence the popularity of sites like PatientsLikeMe.com.
Few consumers listed the government, the media or non-profits as credible healthcare information sources. The survey shows that a majority of Americans still view health providers as their most trusted source of medical information overall.
The AMA recently issued its first health insurance report card grading how quickly and accurately doctors get paid. Docs hope the report card will reduce the cost of claims processing and help in contract negotiations with the health plans.
According to the AMA, the report card compares Medicare and seven national commercial health insurers on the timeliness and accuracy of claims processing. UnitedHealthcare had the lowest rate – only 62 percent of medical services billed were paid by them at the agreed rate. Aetna came in higher at 71 percent, and the Medicare at an impressive 98 percent. What you can do: If you are a healthcare IT physician practice management or EMR vendor who facilitates electronic coding and billing, use the AMA report to highlight how you can improve payment rates for you customers. It's likely your solution improves reimbursement rates and speed, translating into a more efficient and profitable practice.
Health care costs are expected to rise more than 10 percent into next year, says an Aon Consulting survey of 70 national health insurers. This is actually good, considering it’s the smallest increase Aon has seen in six years.
Employers take measures to combat such increases through new designs, adoption of CDHP and HSA plans. Costs are still rising to keep up with growing patient demand for services, the needs of an aging population and prescription drug and technology costs, according to Aon.
What you can do: If you are a healthcare technology vendor whose solutions help lower costs for employers, leverage surveys such as this to highlight the savings you can provide customers. Highlight employer group success stories in the HR and benefits trades. Consider a round table of customers and experts to put your solution in a trend story context.
