Billions of federal dollars are about to flow directly to medical providers to adopt modern health information technology systems that allow them to electronically exchange information with other providers and payers. But how they are expected to spend that money has yet to be defined.

 

While the numbers could change, the Congressional Budget Office is estimating $36.6 billion in payouts to physicians and hospitals, primarily from 2011-2016. About $2 billion in program funds, including grants to support health information exchange programs, also will be spent.

 

The numbers will have a direct impact on physicians. Starting in 2011, direct Medicare payments of up to $44,000 per physician over five years and Medicaid payments of up to $63,750 per physician over six years will be made to medical practices using the technology in "meaningful" ways. An additional 10 percent in Medicaid funds will be available for those in health professional shortage areas.

 

According to Nicholas Papas, a spokesperson with the federal Department of Health and Human Services, health information technology is a key to reducing medical errors and making the nation's $2.2 trillion healthcare sector more efficient. "Our goal is to ensure all Americans will have access to electronic health records by 2014, and we are working towards that goal," he wrote in an email.

 

The stimulus package rewards medical practices that use the technology earlier. Those that have adopted the technology by 2011 or 2012 will get the full amount: $18,000 the first year, $12,000 the next year, $8,000 the third year, $4,000 the fourth year, and $2,000 the fifth year. Those that start in 2013 will start at $15,000. Those that wait until 2015 will face a 1 percent reduction in Medicare payments that can rise to 5 percent by 2018 if fewer than 75 percent of providers nationwide are taking advantage of the technology.

 

Payments will be provided after a practice can prove that it is a "meaningful user" – a term to be defined later this year that will include the ability to exchange information with other entities. Providers who are already using such technology are eligible for the payments.

In Arkansas, the Regional Quality Improvement Initiative, a steering committee of about 20 healthcare leaders, has been working for several years to lay the groundwork for a health information exchange system. Beginning as an informal coffee group, it kicked its operations into second gear when it received grants that, under the management of the Arkansas Foundation for Medical Care, allowed it to create a prototype to share data across insurers.

 

According to William Golden, MD, a member of the committee and the medical director for health policy at Arkansas Medicaid, the group operated by consensus as it tried to develop a sustainable statewide business plan. Unfortunately, no money was available from the Legislature this spring, so the effort remains in a bit of a holding pattern until more specifics are available regarding the federal stimulus package. He said the next concrete steps should be taken sometime this summer.

 

Golden said that an entity eventually will need to set policies that are recognized as state standards. Two models exist – a central server containing medical records accessible by users, and an exchange-type server that pulls data from multiple sources. Both require some kind of computer infrastructure, including staff, that users tend to balk at funding.

 

Another issue: Insurance companies and hospitals are reluctant to share information with their competitors.

 

According to Golden, Arkansas is a bit behind the curve compared to some states, but is in a position to learn from the pioneers.

 

"It's sort of a risky business," he said. "There's a lot of people to organize, a lot of money to spend, a lot of technology to harness, and it's not a real simple, straightforward thing."

 

Before statewide health information exchanges can be created, providers must adopt health information technology in their own practices. Gary Wheeler, MD, a physician and consultant at the Arkansas Foundation for Medical Care, said many providers are hesitating to embrace the technology – and do away with rooms full of patient records – as they wait for the federal government to define terms, regulations, and standards.

 

Wheeler said many current systems aren't designed to achieve the government's expected goals, and providers are waiting to see what kind of new systems are created and how must cheaper they will be.

 

Finally, he said, providers are simply reluctant to accept that the technology will fulfill all of its promise. "I think there's a lot of cynicism about whether that will really happen, and there's a lot of fear that systems that they invest in today might be out of date five years from now, or even before that," he said. "And I think that's the kind of experience you get from operating your own laptop or desktop computer."

 

Still, progress is occurring.

 

Wheeler said a tipping point has been crossed by providers. Nearly 700 physicians – about half of the Medicaid providers – are using the Arkansas Medicaid Information Interchange program, which provides some of the same services that eventually will be available system-wide. Brian Wagner, director of government relations for eHealth Initiative, an independent nonprofit interest group that supports greater use of health information technology, said a "sea change" has occurred on Capitol Hill. And according to Golden, momentum is on HIT's side.