Electronic medical records grants face challenges

Medical technologists and lobbyists say a number of challenges stand in the way of the healthcare industry’s move toward widespread use of electronic medical records, despite a billion-dollar commitment from President Barack Obama for the effort.

Policymakers must figure out the standards by which doctors and hospitals will be eligible for the money, as well as how to protect the privacy of patients as sensitive data is shared between facilities.

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Health specialists and trade groups hailed the administration move to provide $1.2 billion in grants to the program as a big step forward in helping doctors and hospitals adopt new technology to save money, reduce errors and increase efficiency.

The grants, which were announced Thursday, include $598 million to set up around 70 health information technology centers to help healthcare institutions purchase electronic record systems. Another $564 million will go toward developing a nationwide system of health information networks.

Technology has been touted by the administration as a central tool for revamping the nation’s healthcare system.

“Expanding the use of electronic health records is fundamental to reforming our healthcare system,” said Health and Human Services (HHS) Secretary Kathleen Sebelius when she unveiled the grants with Vice President Joe Biden in Chicago.

“Electronic health records can help reduce medical errors, make healthcare more efficient and improve the quality of medical care for all Americans.”

The grants, funded by the $787 billion stimulus legislation passed earlier this year, will not be available until 2010.

Before those funds can be distributed, however, eligibility standards have to be finalized. Under the stimulus legislation, healthcare providers have to demonstrate the “meaningful use” of health information technologies by meeting specific benchmarks. That means doctors and hospitals have to show that the technologies are being used to improve the effectiveness and efficiency of patient care.

But it is still unclear what “meaningful use” standards entail. A federal advisory committee this month came up with a complex list of recommendations, such as requiring healthcare professionals to provide patients electronic copies of lab results and medications lists, and to send digital reminders of follow-up appointments and preventive care by 2011.

David Blumenthal, the HHS’s national coordinator for health information technology, has said the recommendations will be finalized by the end of the year.

“This is just laying the groundwork to help people achieve meaningful use,” said Vadim Schick, an associate with the law firm Post & Schell in Washington. “It remains to be seen how it will play out.”

The final definition of meaningful use, Schick said, “will be the most significant piece of regulation” affecting the adoption of electronic medical records.

HHS also has to coordinate with other agencies, including the Federal Trade Commission, to come up with privacy standards for electronic medical records. Consumer groups and privacy advocates have also said they want to be involved in that process.

Schick said it “could take years” to straighten out the privacy rules, noting the delays in smoothing out standards for the Health Insurance Portability and Accountability Act, or HIPAA, the central legislation concerning health privacy passed a decade ago.

Less than 10 percent of the nation’s practicing doctors use electronic medial records, according to 2008 data in the New England Journal of Health. Doctors and other health providers already using some form of digital record-keeping systems will likely be able to meet the requirements to receive grants and other pieces of the more than $20 billion in stimulus funds set aside for health technology, said David Main, who runs the healthcare practice at Pillsbury Winthrop Shaw Pittman in McLean, Va.

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But doctors still relying on pen and paper for record-keeping may have trouble implementing systems that meet the necessary standards by the deadline. Under the stimulus legislation, providers have until 2015 to purchase equipment and software that meet federal requirements in order to be reimbursed by the government.

“The purchasing cycle [for the technology] is a couple of years,” he said. “It isn’t something you can just get sent to you. You have to go through a long development process to install the technology and change the record-keeping culture in offices.”

Hospitals and doctors have to come up with the money — often tens of thousands of dollars for large practices — to buy the technology. They must then wait for the government to reimburse them. Many doctors are reluctant to invest that kind of cash before the government has finalized its eligibility requirements, Main said.

“They will be reimbursed over four to five years,” he said. “That creates a cash-flow problem.”

Last year, Republican Reps. Dave Camp (Mich.) and Sam Johnson (Texas) introduced legislation to allow doctors who purchase health IT equipment to deduct a large portion of the business expense more quickly in order to help recoup their investment, but the bill did not make it out of committee. No similar bills have been introduced.